Kerala High Court

Sahadulla C.K vs South Indian Bank Limited on 7 January, 2021

             IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

          THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

                                 &

             THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

   THURSDAY, THE 07TH DAY OF JANUARY 2021 / 17TH POUSHA, 1942

                        WA.No.1730 OF 2020

  AGAINST THE JUDGMENT IN WP(C) 23940/2020(N) OF HIGH COURT OF
                     KERALA DATED 9.12.2020


APPELLANT/PETITIONER:

              SAHADULLA C.K, AGED 58 YEARS
              S/O.MUHAMMEDKUTTY C.K., CHAKKALAMKUNNATH HOUSE,
              CHERUKODE P.O., VALLAPUZHA, PALAKKAD.

              BY ADV. SRI.K.MOHANAKANNAN

RESPONDENTS/RESPONDENTS:

      1       SOUTH INDIAN BANK LIMITED,
              REGIONAL OFFICE, 2ND FLOOR, GHANIS BUILDING, FORT
              MAIDAN, KUNNATHOORMEDU, PALAKKAD - 678 013,
              REPRESENTED BY ITS AUTHORIZED OFFICER.

      2       THE MANAGER, SOUTH INDIAN BANK LIMITED
              REGIONAL OFFICE, 2ND FLOOR, GHANIS BUILDING, FORT
              MAIDAN, KUNNATHOORMEDU, PALAKKAD - 678 013.

              R1-2 BY ADV. SRI.SUNIL SHANKER

     THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
07.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WA.No.1730 OF 2020
                                      :: 2 ::




                                 JUDGMENT

Dated this the 7th day of January, 2021

S. MANIKUMAR, C.J.

Being aggrieved by the judgment in W.P.(C) No.23940 of 2020 dated

09.12.2020, instant writ appeal is filed. The judgment impugned in this

writ appeal is extracted hereunder:

"The petitioner has approached this Court aggrieved by the recovery steps initiated by the respondent Bank under the SARFAESI Act. Although various contention are raised in the writ petition in its challenge against the recovery action, I find from the statement filed on behalf of the respondents that the petitioner had earlier approached this Court through W.P(C)No.28066 of 2019 which was disposed by the judgment dated 22.01.2020, wherein the petitioner was directed to remit certain amounts before a cut off date, and also to put up a proposal before the competent officials of the Bank to clear the outstanding dues in installments. While it is the case of the petitioner that he had made substantial payments as directed by the Court, there is nothing to indicate that he had approached the respondent Bank within the time granted by this Court for clearing the outstanding amounts. Taking note of the said factual situation and finding that the bank has since filed an O.A before the Debt Recovery Tribunal, I am of the view that the petitioner is not entitled to any discretionary relief from this Court in these proceedings under Article 226 of the Constitution of India.

The writ petition therefore fails and is accordingly dismissed."

WA.No.1730 OF 2020 :: 3 ::

2. Though Mr. K. Mohanakannan, learned counsel for the appellant,

advanced arguments on the basis of averments and grounds, having regard

to the decision of Hon'ble Supreme Court in Authorised Officer, State

Bank of Travancore and Another v. Mathew K.C. reported in

(2018) 3 SCC 85, wherein it has been held that writ petitions assailing the

correctness of the proceedings initiated under the SARFAESI Act, 2002 are

not maintainable, we are not inclined to entertain the instant appeal.

3. In Mathew K.C. (cited supra), at paragraphs 15 to 18, the Hon'ble

Apex Court held as under:

"15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex- parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in United Bank of India v. Satyawati Tondon and others [AIR 2010 SC 3413], has also not been kept in mind before passing the impugned interim order:-

WA.No.1730 OF 2020 :: 4 ::

"46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, [1969 AIR 556, 1969 SCR (1) 518], Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1], and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [AIR 2003 SC 2120] and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."

(emphasis supplied)

16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference.

17. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and Another, [(1997) 6 SCC 450], observing :-

"32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and WA.No.1730 OF 2020 :: 5 ::

then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."

18. The impugned orders, are therefore, contrary to the law laid down by this Court under Art.141 of the Constitution and unsustainable. They are therefore set aside and the appeal is allowed."

4. In Civil Appeal Nos.10243-10250 of 2018 [ICICI Bank Ltd. v.

Umakanta Mohapatra and Others], by order dated 05.10.2018, the

Hon'ble Apex Court has reaffirmed the legal position that High Court has

no jurisdiction to entertain writ petitions under Article 226 of the

Constitution of India, relating to matters coming under the purview of

SARFAESI Act, 2002, wherein a statutory remedy is available by filing an

application under Section 17 of the said Act.

5. Despite the pronouncement of the Hon'ble Apex Court on the

maintainability of writ petitions relating to SARFAESI proceedings, this

Court on two occasions, had extended indulgence in granting time for

payment of the amounts due and payable to the bank. That apart, loan

transaction is purely contractual and that this Court, under Article 226 of