Dismissed

State Bank of India Stressed Asset Recovery Branch Ernakulam Represented by Its Chief Manager and v. Alice Xavier

Kerala HC23 Dec 2022WA/1974/2022

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed an appeal against the Writ Court’s order staying physical possession of secured asset and directing the petitioner to approach the Debt Recovery Tribunal under Section 17 of the SARFAESI Act, holding that the writ court had considered exceptional circumstances and acted in the interest of justice.

What did the court decide?

No stay on the stay order; writ appeal dismissed with no costs; interlocutory applications closed.

State Bank of India Stressed Asset Recovery Branch… — Banking and Recovery | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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FRIDAY, THE 23^RD DAY OF DECEMBER 2022 / 2ND POUSHA, 1944 WA NO. 1974 OF 2022

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AGAINST THE JUDGMENT IN WP(C) 39917/2022 OF HIGH COURT OF KERALA APPELLANT/1ST RESPONDENT:

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STATE BANK OF INDIA STRESSED ASSET RECOVERY BRANCH
REPRESENTED BY ITS CHIEF MANAGER AND AUTHORISED
OFFICER, 7TH FLOOR, VANKARATH BUILDINGS,
PALARIVATTOM BY PASS,
ERNAKULAM, KOCHI, PIN – 682 024.

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BY ADV S.EASWARAN

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RESPONDENTS/WRIT PETITIONER/RESPONDENTS 2 AND 3 IN THE WP:

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1ALICE XAVIER
W/O XAVIERKUTTY PUTHETH, PUTHETH HOUSE,
34/1428, BALAKRISHNA MENON ROAD, EDAPALLY PO,
ERNAKULAM DISTRICT , PIN – 682 024.

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2 M/S MAREENA TRADING EXPORTS 50/975W,PANORAMA ARCADE, EDAPPALLY, ERNAKULAM, PIN – 682 024.

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3 XAVIERKUTTY PUTHETH.K.J PUTHETH HOUSE, 34/1428 BALAKRISHNA MENON ROAD, EDAPALLY PO ERNAKULAM DISTRICT, PIN – 682 024.

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BY ADV AJEESH S.BRITE

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 23.12.2022,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.A.No.1974 of 2022

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JUDGMENT

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Dated this the 23^rd day of December, 2022

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S. Manikumar, C.J.

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Instant writ appeal is filed by the 1^st respondent in W.P. (C)No.39917 of 2022, challenging the judgment of the learned single Judge dated 19.12.2022, by which, the writ court disposed of the writ petition by holding thus:

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“4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent bank, I am of the opinion that the sale of the property of the petitioner, held on 11.11.2022, constitutes a cause of action for the petitioner to approach the Tribunal by filing a Securitisation Application under Section 17 of the SARFAESI Act. The fact that the husband of the petitioner had earlier attempted to interdict the sale in respect of the property of the petitioner is not a ground to say that the petitioner has no right to challenge the sale proceedings before the Tribunal. Learned counsel appearing for the petitioner also right in contending that if physical possession of the secured asset is taken without even affording to the petitioner a breathing time to approach the Tribunal, that will cause serious prejudice to the petitioner. Therefore, this writ petition will stand disposed of, directing that the

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W.A.No.1974 of 2022

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steps for taking physical possession of the secured asset shall stand suspended till 28.12.2022 to enable the petitioner to move the Tribunal for appropriate reliefs. I make it clear that I have not expressed any opinion on the merits of the matter and it will be open to the Tribunal to decide the matter, in accordance with law.”

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

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2.1. The writ petitioner/1^st respondent herein, is the guarantor for the loan availed by the 2^nd respondent from the State Bank of India – the 1^st respondent, for an amount of Rs.2.47 Crore, for trading and exporting under the Ministry of Micro Small and Medium Enterprises (MSME).

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2.2. Since there was default in payment of instalments, the loan account was declared as NPA. Thereafter, the respondent bank had taken possession of the property and put the same for sale. The property was auctioned on 11.11.2022 without informing the petitioner. The respondent bank had filed M.C.817/2022 before the learned Chief Judicial Magistrate, Ernakulam, under section 14 of the Securitisation

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W.A.No.1974 of 2022

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and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002.

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2.3. The learned Advocate Commissioner appointed by

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the learned Magistrate issued a notice informing that the property of the petitioner will be taken in possession by the Advocate Commissioner on 09.12.2022, which is against the provisions of the Act. Hence, the writ petition was filed seeking the following reliefs:

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“(i) a writ of certiorari or any other appropriate writ order or direction quashing Exhibit P7.

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(ii) a writ of mandamus or any appropriate writ, order or direction directing the respondents to regularize the loan account of the petitioner.

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(iii) an order of stay of all further proceedings pursuant to Ext.P7, pending disposal of the writ petition.”

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Writ court, after considering the rival submissions, disposed of the writ petition as aforesaid.

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We have heard Mr. S. Easwaran, learned counsel for

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the appellant and Mr. Ajeesh S. Brite, learned counsel for respondent No.1 and perused the pleadings and material on record.

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W.A.No.1974 of 2022

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Though several grounds were raised, Mr. S. Easwaran, learned counsel for the appellant, confined himself to grounds ‘E’ and ‘F’, which are reproduced:

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“E. It is further submitted that no case is pleaded as to why the alternative remedy is not availed before the writ petition is filed. What are the exceptional circumstances which led the petitioner to file the present writ petition is not disclosed in the writ petition. It is pertinent to note that the notice of advocate commissioner was issued on 16-11-2022 proposing to take the property on 9-12-2022. The writ petition was filed on 8-12-22 alone which shows the dilatory tactics of the petitioner which should have been taken note by the Learned Single Judge.

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F. It is submitted that the Learned Single Judge exceeded in his jurisdiction in directing the appellants to keep in abeyance the proceedings till 28-12-2022 for taking possession of the Secured asset. It is pertinent to note that the sale of the secured asset has already taken place on 11-112022. In the light of Annexure A2 order, the appellant is entitled to proceed further. The question as to whether the writ petitioner had any independent right to proceed to challenge the measures under Section 13(4) and 14 of the Act is a

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W.A.No.1974 of 2022

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different question altogether. But even it is assumed that the writ petitioner has a statutory right the petitioner did not state any reason as to why such measure was not efficacious or in what manner she was prejudice in not able to avail such remedy. In the absence of such pleading the learned Single Judge was not justified in passing the impugned Judgment.”

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Having gone through the entire material on record and the submission of the learned counsel for respondent No.1, which we have taken note of, that steps are being taken to approach the Tribunal, as directed by the writ court, we are of the view that while disposing of the writ petition vide judgment dated 19.12.2022 in W.P.(C)No.39917 of 2022, writ court has considered the exceptional circumstances, for granting time to the writ petitioner to move the Tribunal, within the time specified in the judgment, and in the meanwhile, directing the appellant not to take possession.

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Taking it for granted that if the writ appeal has to be allowed, as prayed for on the grounds raised, nothing remains for the respondent to challenge before the Tribunal.

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W.A.No.1974 of 2022

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Giving due consideration to the material on record, we

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are of the view that interest of justice would be met, if the impugned judgment is not interfered with. Accordingly, we do so.

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Writ appeal is dismissed. No costs.

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Pending interlocutory applications, if any, shall stand

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closed.

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Sd/-

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S. Manikumar Chief Justice

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Sd/-

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Shaji P. Chaly Judge

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vpv

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W.A.No.1974 of 2022

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APPENDIX OF WA 1974/2022

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PETITIONER ANNEXURES

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Annexure A1COPY OF THE ORDER DATED 30-8-2022 IN
IA NO 1555 OF 2022 IN SA 319 OF 2022
ON THE FILES OF DRT-1 ERNAKULAM.
AnnexureA2COPY OF THE ORDER DATED 14-11-2022 IN
IA NO 2627 OF 2022 IN SA NO. 319 OF
2022 ON THE FILES OF DRT-1 ERNAKULAM.

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//true copy//

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P.A. to Judge

State Bank of India Stressed Asset Recovery Branch Ernakulam Represented by Its Chief Manager and v. Alice Xavier

Case brief

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State Bank of India Stressed Asset Recovery Branch Ernakulam Represented by Its Chief Manager and v. Alice Xavier

Case brief

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Statutes considered

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