Kerala High Court
Federal Bank Ltd vs Asil Mohammed on 10 July, 2025
Author: Anil K. Narendran
Bench: Anil K. Narendran
WA NOS.1567 & 1596 OF 2025 1 2025:KER:50853
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN
&
THE HONOURABLE MR. JUSTICE MURALEE KRISHNA S.
THURSDAY, THE 10TH DAY OF JULY 2025 / 19TH ASHADHA, 1947
WA NO.1567 OF 2025
AGAINST THE ORDER DATED 23.06.2025 IN WP(C) NO.22832 OF 2025 OF
HIGH COURT OF KERALA
APPELLANT/RESPONDENT IN WRIT PETITION:
FEDERAL BANK LTD.,
REPRESENTED BY THE AUTHORIZED OFFICER, FIRST
FLOOR, FEDERAL TOWERS, ARAYIDATHUPALAM,
KOZHIKODE, PIN - 673016.
BY ADVS.
SHRI.MOHAN JACOB GEORGE
SMT.P.V.PARVATHY (P-41)
SMT.REENA THOMAS
SMT.NIGI GEORGE
SHRI.ANANTHU V.LAL
SMT.SHERIN VARGHESE
SHRI.BRAHMA R.K.
RESPONDENT/PETITIONER IN WRIT PETITION:
ASIL MOHAMMED, AGED 38 YEARS,
S/O ABOOBACKER, PARASSERY VEEDU, VAIKKATHOOR,
VALANCHERI P.O, KATTIPPARUTHI, VALANCHERI,
MALAPPURAM, PIN - 676552.
BY ADV.SRI.E.A.BIJUMON
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10.07.2025,
ALONG WITH WA.1596/2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WA NOS.1567 & 1596 OF 2025 2 2025:KER:50853
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN
&
THE HONOURABLE MR. JUSTICE MURALEE KRISHNA S.
THURSDAY, THE 10TH DAY OF JULY 2025 / 19TH ASHADHA, 1947
WA NO.1596 OF 2025
AGAINST THE ORDER DATED 12.06.2025 IN WP(C) NO.21656 OF 2025 OF
HIGH COURT OF KERALA
APPELLANT/RESPONDENT IN WRIT PETITION:
THE SOUTH INDIAN BANK LTD,
REP BY THE AUTHORISED OFFICER, REGIONAL OFFICE,
DOOR NO. 733/2, 1ST FLOOR, D&D ARCADE, CHITUR
ROAD, NEAR MANAPULLI KAVU, P.O.KUNNATHURMEDU,
PALAKKAD DISTRICT, PIN - 678013.
BY ADVS.
SHRI.MOHAN JACOB GEORGE
SMT.P.V.PARVATHY (P-41)
SMT.REENA THOMAS
SMT.NIGI GEORGE
SHRI.ANANTHU V.LAL
SMT.SHERIN VARGHESE
SHRI.BRAHMA R.K.
RESPONDENT/PETITIONER IN WRIT PETITION:
KUNHIMOIDEEN, AGED 62 YEARS,
S/O. MOHAMMED, KALATHIL HOUSE, P.O. VALLAPUZHA,
PATTAMBI TALUK, PALAKKAD DISTRICT, PIN - 679336.
BY ADV.SRI.E.A.BIJUMON
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10.07.2025,
ALONG WITH WA.1567/2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WA NOS.1567 & 1596 OF 2025 3 2025:KER:50853
JUDGMENT
Anil K. Narendran, J.
The challenge made in these writ appeals filed under Section 5(i) of the Kerala High Court Act, 1958, is against the interim order dated 23.06.2025 of the learned Single Judge of this Court in W.P.(C)No.22832 of 2025 and another interim order dated 12.06.2025 in W.P.(C)No.21656 of 2025. The respondent in the respective writ appeal availed financial assistance from Federal Bank Ltd., the appellant in W.A.No.1567 of 2025 arising out of W.P.(C)No.22832 of 2025 and South Indian Bank Ltd., the appellant in W.A.No.1596 of 2025 arising out of W.P.(C)No.21656 of 2025. The respondent in the respective writ appeals, who are the petitioner in W.P.(C)No.22832 of 2025 and W.P.(C)No.21656 of 2025, have approached this Court invoking the writ jurisdiction under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the Bank to allow them to pay their dues in installments. The reliefs sought for in W.P.(C)No.22832 of 2025 read thus:
"(i) issue a writ of mandamus or any other appropriate writ, direction or order directing the respondent to allow the petitioner to pay the overdue arrears by 25 monthly installments.
(ii) Issue a writ of mandamus or any other appropriate writ, direction or order directing the respondent to stop recovery WA NOS.1567 & 1596 OF 2025 4 2025:KER:50853 proceedings and hand over a detailed statement of account deducting the payments made by the petitioner ."
2. The relief sought for in W.P.(C)No.21656 of 2025 read thus:
"(i) issue a writ of mandamus or any other appropriate writ, direction or order directing the bank to regularise the loan account after accepting minimum amount for regularize the loan amounts.
(ii)issue a writ of mandamus or any other appropriate writ, direction or order directing the respondent bank to give proper opportunity to close the loan account giving maximum reductions on the interest, penal interest and other charges, considering the pathetic situation of the petitioner."
3. The impugned orders of the learned Single Judge were passed on the first date on which the respective writ petitions came up for admission. The interim order dated 23.06.2025 in W.P.(C)No.22832 of 2025 reads thus:
"Notice before admission. The learned Standing Counsel takes notice for the respondent and seeks time to file a statement. To consider the prayers sought in the writ petition seeking instalment facility and to defer further coercive steps against the petitioner, as an interim measure, there will be a direction to the petitioner to remit an amount of Rs.30,00,000/- (Rupees thirty lakhs only) within one month. It is made clear that if the above payment is not made, the respondent will be at Liberty to proceed further, in accordance with law."
4. The interim order dated 12.06.2025 granted by the learned Single Judge in W.P.(C)No.21656 of 2015 reads thus:
WA NOS.1567 & 1596 OF 2025 5 2025:KER:50853
"Notice before admission.
2. The learned Standing Counsel takes notice for the respondents and seeks time to file a statement.
3. To consider the prayers sought in the writ petition seeking instalment facility and to defer further coercive steps against the petitioner, as an interim measure, there will be a direction to the petitioner to remit an amount of Rs.20,00,000/-(Rupees twenty Lakhs only) on or before 12.07.2025. It is made clear that if the above payment is not made, the respondents will be at liberty to proceed further, in accordance with law."
5. Challenging the aforesaid interim orders, the appellant Banks are before this Court in these writ appeals.
6. On 09.07.2024, when these writ appeals came up for admission, during the course of arguments, the learned counsel for the appellant Banks placed reliance on the judgment of the Apex Court in Shobha v. Muthoot Finance Ltd. [2025 (2) KHC 229].
7. Heard the learned counsel for the appellant Bank in the respective writ appeal and also the learned counsel for the respondent-borrower.
8. The issue that requires consideration in these writ appeals is as to whether the interim order dated 23.06.2025 in W.P.(C)No.22832 of 2025 and the interim order dated 12.06.2025 in W.P.(C)No.21656 of 2015 of the learned Single Judge can be sustained in law.
WA NOS.1567 & 1596 OF 2025 6 2025:KER:50853
9. On the maintainability of a writ petition under Article 226 of the Constitution of India in respect of the proceedings initiated by the Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ('SARFAESI Act'), the learned counsel for the appellant Banks would rely on the decisions of the Apex Court in South Indian Bank Ltd. v. Naveen Mathew Philip [(2023) 17 SCC 311] and Shobha v. Muthoot Finance Ltd. [2025 (2) KHC 229].
10. In Naveen Mathew Philip [(2023) 17 SCC 311], in the context of the challenge made against the notices issued under Section 13(4) of the SARFAESI Act, the Apex Court reiterated the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, where an effective and efficacious alternative forum has been constituted through a statute. In the said decision, the Apex Court took judicial notice of the fact that certain High Courts continue to interfere in such matters, leading to a regular supply of cases before the Apex Court. The Apex Court reiterated that a writ of certiorari is to be issued over a decision when the court finds that the process does not conform to the law or the statute.
WA NOS.1567 & 1596 OF 2025 7 2025:KER:50853 In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. A question as to whether such a violation would be over a mandatory prescription as against a discretionary one is primarily within the domain of the Tribunal. The issues governing waiver, acquiescence and estoppel are also primarily within the domain of the Tribunal. The object and reasons behind the SARFAESI Act are very clear as observed in Mardia Chemicals Ltd. v. Union of India [(2004) 4 SCC 311]. While it facilitates a faster and smoother mode of recovery sans any interference from the court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including repossession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression 'any person', who could approach the Tribunal.
WA NOS.1567 & 1596 OF 2025 8 2025:KER:50853
11. In Naveen Mathew Philip [(2023) 17 SCC 311] the Apex Court noticed that, in matters under the SARFAESI Act, approaching the High Court for the consideration of an offer by the borrower is also frowned upon by the Apex Court. A writ of mandamus is a prerogative writ. The court cannot exercise the said power in the absence of any legal right. More circumspection is required in a financial transaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent that mode shall not be encouraged by a writ court. A litigant cannot avoid the non- compliance of approaching the Tribunal, which requires the prescription of fees, and use the constitutional remedy as an alternative. In paragraph 17 of the decision, the Apex Court reiterated the position of law regarding the interference of the High Courts in matters pertaining to the SARFAESI Act by quoting its earlier decisions in Federal Bank Ltd. v. Sagar Thomas [(2003) 10 SCC 733], United Bank of India v. Satyawati Tondon [(2010) 8 SCC 110], State Bank of Travancore v. Mathew K.C. [(2018) 3 SCC 85], Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345] and WA NOS.1567 & 1596 OF 2025 9 2025:KER:50853 Varimadugu Obi Reddy v. B. Sreenivasulu [(2023) 2 SCC 168] wherein the said practice has been deprecated while requesting the High Courts not to entertain such cases. In paragraph 18 of the said decision, the Apex Court observed that the powers conferred under Article 226 of the Constitution of India are rather wide, but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal.
12. In Shobha v. Muthoot Finance Ltd. [2025 (2) KHC 229], on the question of maintainability of writ petitions under Article 226 of the Constitution of India against a private non- banking finance company, the Apex Court laid down as follows;
(1) For issuing a writ against a legal entity, it would have to be an instrumentality or agency of a State or should have been entrusted with such functions as are Governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence Governmental.
(2) A writ petition under Article 226 of the Constitution of India may be maintainable against (i) the State Government; (ii) Authority; (iii) a statutory body; (iv) an instrumentality or agency of the State; (v) a company which WA NOS.1567 & 1596 OF 2025 10 2025:KER:50853 is financed and owned by the State; (vi) a private body run substantially on State funding; (vii) a private body discharging public duty or positive obligation of public nature; and (viii) a person or a body under liability to discharge any function under any Statute, to compel it to perform such a statutory function.
(3) Although a non-banking finance company like the Muthoot Finance Ltd. with which we are concerned is duty bound to follow and abide by the guidelines provided by the Reserve Bank of India for smooth conduct of its affairs in carrying on its business, yet those are of regulatory measures to keep a check and provide guideline and not a participatory dominance or control over the affairs of the company.
(4) A private company carrying on banking business as a Scheduled bank cannot be termed as a company carrying on any public function or public duty.
(5) Normally, mandamus is issued to a public body or authority to compel it to perform some public duty cast upon it by some statute or statutory rule. In exceptional cases, a writ of mandamus or a writ in the nature of mandamus may issue to a private body, but only where a public duty is cast upon such private body by a statute or statutory rule and only to compel such body to perform its public duty. (6) Merely because a Statute or a rule having the force of a statute requires a company or some other body to do a particular thing, it does not possess the attribute of a statutory body.
WA NOS.1567 & 1596 OF 2025 11 2025:KER:50853 (7) If a private body is discharging a public function and the denial of any rights is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial but, nevertheless, there must be a public law element in such action.
(8) According to Halsbury's Laws of England, 3rd Ed. Vol.30, p.682, "a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform, and which performs the duties and carries out its transactions for the benefit of the public and not for private profit". There cannot be any general definition of public authority or public action. The facts of each case decide the point.
13. On the question of maintainability of a writ appeal under Section 5(i) of the Kerala High Court Act, against an interim order passed by a learned Single Judge during the pendency of the writ petition, the Larger Bench in K. S. Das v. State of Kerala [1992 (2) KLT 358] held that the word 'order' in Section 5(i) of the Kerala High Court Act includes, apart from other orders, orders passed by the High Court in miscellaneous petitions filed in the writ petitions provided the orders are to be in force pending the writ petition. An appeal would lie against such orders only if the orders substantially affect or touch upon the substantial rights or WA NOS.1567 & 1596 OF 2025 12 2025:KER:50853 liabilities of the parties or are matters of moment and cause substantial prejudice to the parties. The nature of the 'order' appealable belongs to the category of 'intermediate orders' referred to by the Apex Court in Madhu Limaye v. State of Maharashtra [(1977) 4 SCC 551]. The word 'order' is not confined to 'final order' which disposes of the writ petition. The 'orders' should not however, be ad-interim orders in force pending the miscellaneous petition or orders merely of a procedural nature.
14. In Thomas P. T. and another v. Bijo Thomas and others [2021 (6) KLT 196], a Division Bench of this Court noticed that the view that was upheld by the Larger Bench in K.S. Das [1992 (2) KLT 358] was that even though an appeal could be filed against an interlocutory order passed in a writ petition, in order to be qualified for challenge in an appeal, the order shall be either substantially affecting or touching upon the substantial rights or liabilities of the parties or which are matters of moment and cause substantial prejudice to the parties. According to the Larger Bench, the nature of the order appealable belongs to the category of intermediate orders referred to by the Apex Court in Madhu Limaye [(1977) 4 SCC 551]. It was, however, clarified by the Larger Bench that such orders should not, however, be ad WA NOS.1567 & 1596 OF 2025 13 2025:KER:50853 interim orders or orders merely of a procedural nature.
15. This Court had occasion to consider the challenge made against the interim order passed by the learned Single Judge staying recovery proceedings under the SARFAESI Act in writ petitions filed under Article 226 of the Constitution of India. Such writ appeals are already disposed of permitting the bank to raise the question of maintainability by filing counter affidavit in the writ petitions. In those judgments, it was observed that we have no doubt that the learned Single Judge will deal with the maintainability of the writ petition, taking note of the judgment of the Apex Court in the decisions referred to supra, before proceedings with the writ petition further on merits.
16. In these writ appeals filed by the appellant Banks, similar interim orders passed by the learned Single Judge are under challenge. In view of the law laid down by the Apex Court in Shobha v. Muthoot Finance Ltd. [2025 (2) KHC 229], a writ petition seeking interference in the SARFAESI proceedings initiated by a private non-banking finance company or seeking installment facility to pay the dues in such proceedings, is not maintainable in law. The interim order granted by the learned Single Judge in such a writ petition, which substantially affects the WA NOS.1567 & 1596 OF 2025 14 2025:KER:50853 rights and cause prejudice to a private non-banking financial institution, is an order against which an appeal under Section 5(i) of the Kerala High Court Act, 1958 can be entertained.
In such circumstances, these writ appeals are allowed by setting aside the impugned orders dated 23.06.2025 in W.P.(C)No.22832 of 2025 and dated 12.06.2025 in W.P.(C)No.21656 of 2015 passed by the learned Single Judge.
Sd/-
ANIL K. NARENDRAN, JUDGE Sd/-
MURALEE KRISHNA S., JUDGE DSV/-