Allowed

The Bank of India v. Shaji. A.D

Kerala HC12 Oct 2022WA/1449/2022

Case brief

AI extract

What is this about?

The Division Bench set aside an interim order by the learned Single Judge that extended time for payment of dues. It held that such an application was not maintainable after the related writ appeal was disposed of by the Division Bench granting liberty to the petitioners, as it amounted to reopening and altering the appellate judgment.

What did the court decide?

The order dated 01.09.2022 in I.A. No. 2 of 2022 setting aside the time bar and granting extension was set aside. Respondents were granted liberty to approach the Forum in accordance with law.

The Bank of India Vs Shaji. A.D — Banking and Recovery | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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&

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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WEDNESDAY, THE 12TH DAY OF OCTOBER 2022 / 20TH ASWINA, 1944

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WA NO. 1449 OF 2022

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AGAINST THE ORDER IN WP(C) 21928/2022 OF HIGH COURT OF KERALA DATED 1.9.2022

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APPELLANT/RESPONDENTS:

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1THE BANK OF INDIA
REPRESENTED BY ITS BRANCH MANAGER,
ERNAKULAM BRANCH, SHANMUGHAM ROAD,
ERNAKULAM., PIN – 682031

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2 THE AUTHORIZED OFFICER BANK OF INDIA, ERNAKULAM BRANCH, SHANMUGHAM ROAD, ERNAKULAM, PIN – 682031

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BY ADV. JAWAHAR JOSE

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RESPONDENTS/WRIT PETITIONERS:

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1SHAJI. A.D
AGED 62 YEARS
FLAT NO.604 (NEW 1005), PRASANNA VIHAR,
OPPOSITE HIGH COURT, MARIINE DRIVE,
HIGH COURT (P.O), ERNAKULAM, PIN-682 031

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2ROSE MARY. K.A
AGED 52 YEARS
PRASANNA VIHAR, OPPOSITE HIGH COURT,
MARINE DRIVE, HIGH COURT (P.O),
ERNAKULAM, PIN - 682031

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OTHER PRESENT:

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SRI. AHAMMED FAZIL

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
12.10.2022, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:

W.A.1449/2022

J U D G M E N T

Dated this the 12^th day of October, 2022

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S. Manikumar, CJ.

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After considering the material on record, on 10.10.2022, in the instant appeal, we passed the following order:

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“Instant writ appeal is filed by the respondents against the interim order dated 01.09.2022 in I. A. No. 2 of 2022 in W. P. (C) No. 21928 of 2022.

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Short facts leading to the filing of the writ appeal are as under:-

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a) Appellants herein are the respondents before the writ court. According to the appellants, writ petition was filed by the respondents herein, mainly challenging the notice issued by the Advocate Commissioner, whereby the Commissioner scheduled to take possession of the scheduled property. The learned Single Judge, by judgment dated 08.07.2022, dismissed the writ petition. However, the learned Single Judge interdicted the Bank from exercising their statutory right from selling the property for a period of two months, which already expired on 07.09.2022.

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b) Appellants have submitted that against the dismissal of the writ petition, petitioners filed W. A No. 878 of 2022, and the appeal was disposed of by judgment dated 14.07.2022, wherein liberty was granted to the writ petitioners to challenge the possession notice, if permissible in law.

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W.A.1449/2022

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However, the writ petitioners have not challenged the possession notice till date.

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c) Appellants have further submitted that on the verge of expiry of the time limit, respondents have filed an interlocutory application before the learned Single Judge, seeking further extension of four more months, with respect to the order of injunction, whereby the Bank is interdicted from exercising their statutory right to sell the property. The learned Single Judge, again by order dated 01.09.2022, injuncted the Bank to sell the property till 30.10.2022.

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Being aggrieved, instant writ appeal is filed.

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Issue notice by special messenger to respondent Nos. 1 and 2.

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Post on 12.10.2022.”

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On this day, respondents 1 and 2 were represented by

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Mr. Ahmed Fazil, learned counsel.

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Learned Counsel for the appellant bank submitted that appellants were the respondents before the writ court. Writ petition was filed mainly challenging the notice issued by the learned Advocate Commissioner, whereby, the Commissioner scheduled to take possession of the scheduled property.

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The Learned Single Judge, by judgment dated 8-7-2022 dismissed the writ petition. However, the Learned Single Judge interdicted the bank from exercising their statutory right from

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W.A.1449/2022

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selling the property for a period of two months which already expired on 7-9-2022.

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Against the dismissal of writ petition, the writ petitioners filed appeal as W.A No.878/2022, as the appeal was disposed by judgment dated 14-7-2022, wherein liberty was granted to writ petitioners to challenge the possession notice, if permissible in law. However, writ petitioners have not challenged the possession notice till date.

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On the verge of expiry of the time limit, respondents have filed an interlocutory application before the learned Single Judge, seeking further extension of four more months, with respect to the order of injunction, whereby the bank was interdicted from exercising their statutory right to sell the property.

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Learned Single Judge, again, by order dated 1-9-2022 injuncted the bank to sell the property till 30-10-2022. Appellant bank is highly prejudiced with the said direction of the learned Single Judge. Hence, the writ appeal.

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It is further contended that the learned Single Judge ought to have considered the impact of the statutory provisions, particularly, Rules 8(6) and 9(1) of the Security Interest

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W.A.1449/2022

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(Enforcement) Rules, 2002, wherein the Bank can sell the secured asset/mortgaged property only by serving a notice to the borrower, with 30 clear days gap, between the service of notice and the date of auction sale.

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By this provision, the writ petitioner apart from the ultimatum date of 30-10-2022 fixed by the court gets a further grace period of 30 more days.

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That apart, the writ petitioners are having their right to redeem the mortgage property, till the date of registration of sale certificate which is issued under Rule 9 of the Security Interest (Enforcement) Rules.

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The time granted by the Learned Single Judge is without considering the time which the scheme of the SARFAESI Act, 2002 and its subordinate legislation conferred on the owner of the mortgaged property. Thus, the time granted by the Learned Single Judge is an "additional time", over and above the "time period" conferred under the SARFAESI Act and its subordinate legislation as a matter of right to the writ petitioner.

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He further submitted that if a particular statute prescribes a "time", courts should not extent the time, beyond what is prescribed in the statute, as the extension of "time" if

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W.A.1449/2022

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given, would run contradictory to the statutory scheme. Thus, the extension of two months time given by the Learned Single Judge requires to be set-aside, as the said order is legally unsustainable. As there cannot be an estoppel against the statutory provision, the fact that the appellants have not challenged the grant of two months time in the judgment dated 8-7-2022 is an immaterial fact, while considering the challenge to the order dated 1-9-2022, where two month's time is further granted.

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In addition to the averments extracted supra and the points urged, Mr.Jawahar Jose, learned counsel also produced the copy of the judgment made by learned Single Judge on 8.7.2022 in W.P(C). No.21928 of 2022, by which time was extended by two months for payment of instalments.

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By inviting attention of this Court to the judgment made in W.A. No.878 of 2022, Mr.Jawahar Jose, learned counsel for the appellant further submitted that when the said appeal came up for admission on 14.7.2022 before this Court, taking note of the submission of learned counsel for the appellant therein that possession had already been taken on 12.7.2022, and by recording the submission of learned counsel for the appellant therein that giving an opportunity to the appellant to challenge

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W.A.1449/2022

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the possession taken, appeal be disposed of, liberty was granted to the appellant therein to challenge the said possession notice and accordingly, W.A. No.878 of 2022 was disposed of on 14.7.2022.

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For brevity, judgment in W.A. No.878 of 2022 dated

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14.7.2022 is extracted:

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“Being aggrieved by the judgment dated 08.07.2022 in W.P. (C.) No. 21928/2022, this writ appeal is filed. Short judgment impugned is reproduced hereunder:-

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“When this writ petition is taken up for consideration today, the learned counsel for the petitioners submit that the petitioners are in the process of finding buyers to purchase the secured asset and expects to settle the liability of the bank by requiring the buyers to directly make payments to the extent of liability to the respondent bank. Even after perusing the affidavit dated 06-07-2022 it is difficult to conclude that the petitioners are residing in the secured asset in question which is a residential apartment. Therefore no prejudice will be caused to the petitioners if the possession of the secured asset is taken by the respondent bank. However, this writ petition is disposed of directing that if the petitioners are able to find a buyer who is willing to clear the entire liability of the bank by remitting the amount due directly to the bank within a period of 2 months from today, it is open to the petitioners to pursue that course of action. Needless to say if the entire liability of the bank is cleared the bank will permit the petitioners to redeem the mortgage and convey the property to the purchaser. The property shall not be brought to sale for a period of two months from today.”

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Today, when the matter came up for hearing, learned counsel for the appellants submitted that pursuant to the possession notice dated 11.03.2020 issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, possession has been taken on 12.07.2022 by the

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W.A.1449/2022

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Advocate Commissioner appointed by the jurisdictional court.

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Learned counsel submitted that, giving liberty to the appellant to challenge the possession taken, writ appeal may be disposed of. Submission of the learned counsel for the appellants is placed on record.

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Liberty is granted to the appellants to challenge

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the said notice, if permissible under law.

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Writ appeal is disposed of as above.”

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Learned counsel for the appellant further submitted that after the disposal of W.A. No.878 of 2022 on 14.7.2022, respondents/appellants therein have filed I.A. No.2 of 2022 before the learned Single Judge on 30.8.2022 seeking for further extension of time.

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According to learned counsel for the appellant, when the writ appeal itself has been disposed of as stated supra,

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learned Single Judge has no jurisdiction to entertain an interlocutory application for extension of time.

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Per contra, Mr. Ahmed Fazil, learned counsel for the respondents submitted that it is true that the writ appeal was disposed of as stated supra, but when there was prospective buyers, extension of time was necessitated and thus prayed for.

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W.A.1449/2022

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Heard the learned counsel for the parties and perused the material available on record.

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From the material on record, it could be deduced that W.P(C). No.21928 of 2022 was disposed of on 8.7.2022 as stated supra. Being aggrieved, W.A. No.878 of 2022 was filed and on the basis of the submission of learned counsel, granting liberty to challenge the possession notice, writ appeal was disposed of on 14.7.2022 as extracted supra.

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Section 13(8) of Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002, being relevant is extracted hereunder:

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“13. Enforcement of Security Interest -

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(8) Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets,-

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(i) the secured assets shall not be transferred by way of lease assignment or sale by the secured creditor; and

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(ii) In case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this subsection, no further step shall be taken by such secured

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W.A.1449/2022

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creditor for transfer by way of lease or assignment or sale of such secured assets.”

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As rightly contended by Mr.Jawahar Jose, learned counsel for the appellant herein, application filed before the writ court either for modification, alteration or for extension of time as in the case on hand ought not to have been entertained.

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When the writ appeal itself has been disposed of by granting liberty to the respondents/appellants therein to approach the Forum to challenge the possession notice, filing of an application and passing of any order in the interlocutory application would amount to reopening of the matter and with due respect, writ court has virtually, altered or modified the judgment in the writ appeal.

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Thus, we are constrained to say that by way of an interim application, the judgment passed by a Division Bench, cannot be altered, even by granting extension of time, on the premise that there are prospective buyers.

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Giving due consideration to the material on record and agreeing with the submission of learned counsel for the appellant in all respects as stated supra, order passed in interlocutory application No.2 of 2022 dated 1.9.2022 is liable to

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W.A.1449/2022

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be set aside and accordingly set aside, with liberty to the respondents to approach the Forum in accordance with law. Redemption of the property can also be sought for in accordance

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with law.

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Writ appeals is allowed, as indicated above.

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Sd/S. Manikumar, Chief Justice

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Sd/Shaji P. Chaly, Judge

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Shaji P. Chaly,

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sou.

The Bank of India v. Shaji. A.D

Case brief

What is this about?

What did the court decide?

The Bank of India v. Shaji. A.D

Case brief

What is this about?

What did the court decide?

What the court decided

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