Disposed

LIC Housing Finance Ltd. v. State of Kerala

Kerala HC3 Feb 2023WP(C)/25242/2009

Case brief

AI extract

What is this about?

In a writ petition under Section 14 of the SARFAESI Act, LIC Housing Finance sought police protection to take possession of mortgaged property from a defaulter. The State initially claimed prior charge dues but later surrenders objections. The Court dismissed the petition, allowing a fresh application contingent on settling tax dues.

What did the court decide?

Liberty granted to petitioner to move a fresh application under Section 14 of SARFAESI Act after Income Tax dues are settled.

LIC Housing Finance Ltd. Vs State of Kerala — Company and Corporate | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE AMIT RAWAL

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FRIDAY, THE 3^RD DAY OF FEBRUARY 2023 / 14TH MAGHA, 1944

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WP(C) NO. 25242 OF 2009

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PETITIONER:

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LIC HOUSING FINANCE LTD. BACK OFFICE, 9TH FLOOR, JEEVAN PRAKASH, ERNAKULAM, COCHIN-11, REPRESENTED IN THIS PROCEEDINGS BY AUTHORISED OFFICER, LIC HOUSING FINANCE LTD., BACK OFFICE, JEEVAN PRAKASH, M.G.ROAD, ERNAKULAM, DULY AUTHORIZED AND EMPOWERED.

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BY ADVS. SRI.R.S.KALKURA SRI.M.AJAY IRUMPANAM SRI.HARISH GOPINATH SRI.M.S.KALESH SRI.V.VINAY MENON

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RESPONDENTS:

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1 STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT OF KERALA, SECRETARIAT, TRIVANDRUM.

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2 DISTRICT COLLECTOR, COLLECTORATE, KOLLAM.

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3 TAHASILDAR, KOTTARAKKARA. 4 UNION OF INDIA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF REVENUE, GOVERNMENT OF INDIA, NEW DELHI.

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5 SUPERINTENDENT OF CENTRAL EXCISE AND CUSTOMS, MAIN ROAD, PUNALUR.

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6 DR.RADHA MOHAN.S } DIED–L.R.IMPLEADED “KAILAS”, EZHUKON P.O., KOLLAM. }

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7 LALITHAMBIKA MOHAN “KAILAS”, EZHUKON P.O., KOLLAM.

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WP(C)No.25242/2009

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8	ADDL.R8 THE SALES TAX OFFICER, SALES TAX OFFICE, KOTTARAKKARA
9	ADDL.R9 THE COMMISSIONER, INCOME TAX DEPARTMENT, KOLLAM
10	ADDL.R10 THE COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, KOLLAM
	ADDL. R8 TO R10 IMPLEADED AS PER ORDER DATED 15.03.2010 IN I.A.NO.3152/2010
11	ADDL R11 MUKESH R. S/O.DR.RADHA MOHAN.S., }LEGAL HEIR OF KAILAS, EZHUKON.P.O, KOLLAM-691 505 }DECEASED R6
	IMPLEADED AS PER ORDER DTD.19-08-2019 IN IA.NO.1/2019 IN WP(C) NO.25242/2009.
	BY ADVS. ADVOCATE GENERAL OFFICE KERALA SRI.K.V.ANIL KUMAR SRI.JOSE JOSEPH, SC, FOR INCOME TAX SRI.RAFEEQ, SPECIAL GOVERNMENT PLEADER (TAX)
THIS	WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
03.02.2023,	THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.25242/2009

JUDGMENT

The petitioner has approached this Court with the

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following prayers:

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“(i) issue a writ of mandamus or any other appropriate writ, order or direction of the nature of mandamus directing the 2^nd respondent to render all appropriate assistance to the petitioner to take possession of the property covered by Ext.P8 notice belonging to the respondents 4 and 5 as contemplated under Section 14 of the SARFAESI Act.”

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The dispute in this case is that the petitioner extended a facility of loan to the 6^th respondent for Rs.5,00,000/- (Rupees five lakhs only) vide sanction dated 03.06.1999 Ext.P2. In view of the loan, 6^th respondent executed as security equitable mortgage by depositing the title deeds in respect of the building and property measuring 12 cents along with the structures and all other appurtenances comprised in Sy.No.356/2 and 356/15 situated in Ezhukon Village, Kottarakkara Taluk. Thereafter a request was submitted by the 6^th respond0ent for enhancement of the loan facility by another Rs.7 lakh, which was accepted and granted. For security for the amount falling due under the said transaction, 6^th respondent executed a memorandum of redeposit

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WP(C)No.25242/2009

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of title deeds on 23.02.2000 and this process continued till facility was extended to Rs.15 lakhs. Both 6^th and 7^th respondents (wife of the 6^th respondent) were to repay the loan in 180 instalments of Rs.19,810/-. The instalments were irregular. Accordingly, proceedings under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for realisation of Rs.34,98,833.32 with future interest as on 20.08.2007 were initiated. On expiry of the statutory period of two months, request under Section 14 of the aforementioned Act was submitted to respondent No.2 for grant of police protection to take over the property. But, the Government caused interference for the reason that they were having holder of first charge of the property on account of certain dues from the defaulter.

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This Court on 31.10.2017 passed the following order :

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“In this writ petition, a dispute regarding appropriation of amount due from a defaulter arises for consideration.

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2. The petitioner being mortgagee claims exclusive right over the property mortgaged for realisation of the amount.

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3. The State, on the other hand, claims that defaulter had committed default in payment of sales tax and therefore they are statutorily entitled to appropriate the amount from the property of the defaulter. It seems the Department Customs and Central Excise also raises claim amount from the

WP(C)No.25242/2009

defaulter.

4. Whatever be the nature of dispute for entitlement, the property remains unsold so far. The only beneficiary as of now is the defaulter. In such circumstances, this Court is of the view that the Revenue Department of the State shall proceed with the sale by public auction. The question relating to appropriation will be decided by this Court at a later point of time. The amount so realised from sale shall be kept in a separate revenue account. Certainly, before proceeding with the sale, the reserve price shall be fixed and intimated before this Court.”

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Mr.Rafeeque, learned Special Government Pleader appearing on behalf of the State submits that during the pendency of the writ petition, the sales tax dues of the Government have been paid and they would not have any objection in case appropriate steps are taken under Section 14 of the SARFAESI Act in accordance with law. Counsel for the income tax department submits that an amount of Rs.8,63,740/- plus interest is paid by the defaulter as on 19.6.2007 and they would not have any objection in case the permission is granted for proceeding under Section 14 by keeping their interest in tact. Affidavit dated 01.02.2023 in compliance with the order dated 11.01.2023 has been filed by the 2^nd respondent.

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I have heard the counsel for the parties and appraised the paper book and of the view that a quietus in respect of the controversy can be brought in view of the submission of the

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learned Government Pleader regarding settlement of the sale tax dues towards the defaulter.

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Accordingly, I dispose of the writ petition by giving liberty to the petitioner to move a fresh application under Section 14 of the SARFAESI Act for taking possession by giving a copy to the income tax department. The competent authority shall decide the application and grant permission, if any, in accordance with law. The amount due to the income tax shall be settled after realisation of the dues of secured creditor.

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Writ petition stands disposed of.

Sd/-

AMIT RAWAL JUDGE

csl

APPENDIX OF WP(C) 25242/2009

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PETITIONER'S EXHIBITS

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EXHIBIT P1	TRUE COPY OF THE LOAN APPLICATION DATED 02.06.1999 SUBMITTED BY THE 6TH RESPONDENT.
EXHIBIT P2	TRUE COPY OF LETTER OF SANCTION DATED 03.06.1999 ISSUED BY THE PETITIONER TO THE 6TH RESPONDENT.
EXHIBIT P3	TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEEDS EXECUTED BY THE 6TH RESPONDENT IN FAVOUR OF THE PETITIONER DATED 04.06.1999
EXHIBIT P4	TRUE COPY OF THE ORIGINAL TITLE DEED BEARING NO. 1807/98 DATED 10.07.1998.
EXHIBIT P5	TRUE COPY OF THE MEMORANDUM OF REDEPOSIT OF TITLE DEEDS EXECUTED BY THE 6H RESPONDENT IN FAVOUR OF THE PETITIONER DATED 23.02.2000.
EXHIBIT P6	TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEEDS DATED 20.01.2001 EXECUTED BY THE 6TH RESPONDENT
EXHIBIT P7	TRUE COPY OF THE LETTER DATED 24.03.2008 ISSUED BY 6TH RESPONDENT TO THE PETITIONER.
EXHIBIT P8	TRUE COPY OF THE NOTICE AS CONTEMPLATED UNDER SECTION 13(2) OF THE SARFAESI ACT DATED 20.08.2007
EXHIBIT P9	TRUE COPY OF THE POSTAL ACKNOWLEDGEMENT INDICATING RECEIPT OF EXT.P8 NOTICE.
EXHIBIT P10	TRUE COPY OF THE APPLICATION DATED 24.12.2007 SUBMITTED BY THE PETITIONER UNDER SECTION 14 OF THE SARFAESI ACT.
EXHIBIT P11	TRUE COPY OF THE LETTER DATED 03.01.2008 ISSUED BY THE 4TH RESPONDENT TO THE 3RD RESPONDENT.

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EXHIBIT P12 TRUE COPY OF THE CERTIFICATED ISSUED BY THE VILLAGE OFFICER DATED 22.07.2009. EXHIBIT P13 TRUE COPY OF THE WP(C)NO.26063/2008 OF THIS HON'BLE COURT.

LIC Housing Finance Ltd. v. State of Kerala

Case brief

What is this about?

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LIC Housing Finance Ltd. v. State of Kerala

Case brief

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What did the court decide?

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