Petitioners challenged SARFAESI Act proceedings for loan recovery, claiming the mortgaged land is agricultural and under acquisition. The High Court rejected these grounds, dismissing the writ petition.
The writ petition was dismissed as it failed to make out any ground warranting the intervention of the Court under Article 226 of the Constitution.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
MONDAY, THE 10TH DAY OF OCTOBER 2022 / 18TH ASWINA, 1944
W.P.(C) NO.1091 OF 2022
PETITIONERS:
1 MAHAFOOZ RAHIM, AGED 56 YEARS, S/O. SAITHALAVI, 461, 2/362, KAPPUNGAL HOUSE, EDATHANATTUKARA, VATTAMANNAPURAM WEST, ALANELLUR, MANNARKKAD TALUK, PALAKKAD DISTRICT-678 601.
2 SULAIKHA, AGED 51 YEARS, W/O. MAHAFOO RAHIM, 461, 2/362, KAPPUNGAL HOUSE, EDATHANATTUKARA, VATTAMANNAPURAM WEST, ALANELLUR, MANNARKKAD TALUK, PALAKKAD DISTRICT-678 601.
BY ADVS.P.B. KRISHNAN P.B. SUBRAMANYAN SABU GEORGE MANU VYASAN PETER
RESPONDENTS:
1 IDBI BANK LTD, PERINTHALMANNA BRANCH, MARHABA TRADE CENTRE, OOTTY ROAD, NEAR KSEB OFFICE, PERINTHALMANNA, MALAPPURAM - 679 322 REPRESENTED BY ITS GENERAL MANAGER.
2 THE AUTHORIZED OFFICER, IDBI BANK LTD., REGIONAL OFFICE, CITY PLAZA, 2ND FLOOR, YMCA CROSS ROAD, KOZHIKODE-673 001.
BY ADV. M.S. KIRAN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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JUDGMENT
The petitioners have approached this Court being aggrieved by the proceedings initiated against them under the provisions of SARFAESI Act to recover amounts due under a loan availed by them from the respondent Bank. The case of the petitioners is that the land in question is agricultural land and proceedings cannot be continued against the same under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short 'the SARFAESI Act'). It is also the case of the petitioners that a substantial extent of the property (which has been mortgaged) is under acquisition by the National Highways Authority in terms of Ext.P17 notification and it will be impossible for the respondent Bank to initiate any proceedings in respect of the property in question.
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agricultural land. It is submitted that huge amounts are due from the petitioners and even if the portion of the property is subject matter of acquisition, it will be open to the respondent Bank to proceed against the balance property and at the same time seek release of the amount to be paid for acquisition, directly to the respondent Bank. It is submitted that the 1st petitioner is a doctor by profession and is engaged in various businesses, including the running of a petrol pump. It is pointed out that the petitioners are also managing and running various educational institutions including schools and colleges. It is submitted that the writ petition is not maintainable and there is no ground to challenge the proceedings under the SARFAESI Act under Article 226 of the Constitution of India.
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to be merit in the contention taken by the learned counsel appearing for the respondent Bank that the mortgaged asset is not agricultural land. Further, the amounts due from the petitioners are huge and there seems to be no credible proposal to settle the liabilities in any manner. The fact that the acquisition proceedings are pending against the portion of the property is no reason to keep proceedings initiated by the Bank in abeyance. it is for the Bank to work out its remedy in circumstances where part of the mortgaged land is under the process of acquisition.
The writ petition fails and the same is accordingly dismissed.
Sd/- GOPINATH P. JUDGE
bpr
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APPENDIX
PETITIONERS' EXHIBITS
EXHIBIT P1 DATED 4.2.2015, TRUE COPY OF THE SANCTION LETTER ISSUED BY THE 1ST RESPONDENT TO PETITIONER NO.1.
EXHIBIT P2 DATED 6.2.2015, TRUE COPY OF THE HYPOTHECATION CUM LOAN AGREEMENT EXECUTED BY PETITIONER NO.1.
EXHIBIT P3 DATED 4.2.2015, TRUE COPY OF THE SANCTION LETTER ISSUED BY THE 1ST RESPONDENT TO PETITIONER NO.2.
EXHIBIT P4 DATED 6.2.2015, TRUE COPY OF THE HYPOTHECATION CUM LOAN AGREEMENT EXECUTED BY PETITIONER NO.2.
EXHIBIT P5 DATED 17.3.2020, TRUE COPY OF THE NOTICE ISSUED TO PETITIONER NO.1 UNDER SECTION 13(2) OF THE SARFAESI ACT.
EXHIBIT P6 DATED 17.3.2020, TRUE COPY OF THE NOTICE ISSUED TO PETITIONER NO.2 UNDER SECTION 13(2) OF THE SARFAESI ACT.
EXHIBIT P7 DATED 5.5.2020, TRUE COPY OF THE REPLY NOTICE SEND BY THE PETITIONER.
EXHIBIT P8 DATED 27.5.2020, TRUE COPY OF THE LETTER SENT BY THE 2ND RESPONDENT TO THE PETITIONERS.
EXHIBIT P9 DATED 30.5.2020, TRUE COPY OF THE LETTER SEND BY THE PETITIONERS TO RESPONDENT NO.2.
EXHIBIT P10 DATED 10.9.2020, TRUE COPY OF THE PLAINT IN O.S.NO.147 OF 2020 ON THE FILE OF THE MUNSIFF - MAGISTRATE COURT, MANNARKKAD.
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| EXHIBIT | P11 DATED 24.11.2021, TRUE COPY OF THE POSSESSION NOTICE ISSUED BY RESPONDENT NO.2 TO PETITIONER NO.1. |
|---|---|
| EXHIBIT | P12 DATED 24.11.2021, TRUE COPY OF THE POSSESSION NOTICE ISSUED TO PETITIONER NO.2. |
| EXHIBIT | P13 NIL, TRUE COPY OF THE PHOTOGRAPHS OF THE PROPERTY. |
| EXHIBIT | P14 DATED 29.03.2019, TRUE COPY OF THE ITR ACKNOWLEDGEMENT OF PETITIONER NO.1 FOR AY 2018-19. |
| EXHIBIT | P15 DATED 22.07.2020, TRUE COPY OF THE ITR ACKNOWLEDGEMENT OF PETITIONER NO.1 FOR AY 2019-20. |
| EXHIBIT | P16 DATED 10.03.2021, TRUE COPY OF THE ITR ACKNOWLEDGEMENT OF PETITIONER NO.1 FOR AY 2020-21. |
| EXHIBIT | P17 TRUE COPY OF THE RELEVANT PAGES OF THE NOTIFICATION PUBLISHED UNDER SECTION 3C OF THE NATIONAL HIGHWAYS ACT, DATED 31-05-2022. |
| EXHIBIT | P18 TRUE COPY OF THE CERTIFICATE OR REGISTRATION ISSUED BY THE RTO, MANNARGHAT, DATED 4-11-2014. |
| RESPOND EXHIBIT |
ENTS' EXHIBITS R1(A) THE TRUE COPY OF THE ASSIGNMENT DEED NO.281/1961 OF SRO MANNARKAD. |
| EXHIBIT | R1(B) THE TRUE COPY OF THE POSSESSION CERTIFICATE DATED 12/01/2015 ISSUED BY THE VILLAGE OFFICER ALANALLUR III. |
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EXHIBIT R1(C) THE TRUE COPY OF THE LOCATION CERTIFICATE DATED 13/01/2015 ISSUED BY THE VILLAGE OFFICER, ALANALLUR II. EXHIBIT R1(D) THE TRUE COPY OF THE TECHNICAL APPRAISAL REPORT OF THE PROPERTY DATED 06/12/2021. EXHIBIT R1(E) THE TRUE COPY OF THE PHOTOGRAPHS OF THE 2.32 ACRS OF LAND WITH BUILDING OWNED BY 1ST PETITIONER. EXHIBIT R1(F) THE TRUE COPY OF THE DECLARATION AND UNDERTAKING DATED 06/02/2015 EXECUTED BY THE 1ST PETITIONER FAVORING THE RESPONDENT BANK. EXHIBIT R1(G) THE TRUE COPY OF THE DECLARATION AND UNDERTAKING DATED 06/02/2015 EXECUTED BY THE 2ND PETITIONER FAVORING THE RESPONDENT BANK. EXHIBIT R1(H) THE TRUE COPY OF THE RELEVANT EXTRACT FROM INTERNET.
3 issues framed by the court
Whether the writ petition is maintainable to challenge proceedings initiated under the SARFAESI Act regarding recovery of loan dues.
Whether the fact that part of the mortgaged property is under acquisition proceedings warrants keeping the bank's recovery proceedings in abeyance.
Whether the mortgaged asset qualifies as agricultural land to exempt it from SARFAESI Act proceedings.
2 provisions across 2 enactments
Mahafouz Rahim
Sulaikha
IDBI Bank Ltd, Perinthalmanna Branch
The Authorized Officer, IDBI Bank Ltd., Regional Office, Cozhikode
Gopinath P
Justice Gopinath P
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
