Muhammed Shafi A vs The Federal Bank Ltd
2021 Latest Caselaw 477 Ker

         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.1788 OF 2020

AGAINST THE JUDGMENT IN WP(C) 24611/2020(B) OF HIGH COURT
                OF KERALA DATED 8.12.2020


APPELLANT/PETITIONER:

           MUHAMMED SHAFI A
           ALATTU HOUSE, KINALOOR P.O, BALUSSERY,
           KOZHIKODE 673 612

           BY ADV. SMT.VIJAYAKUMARI

RESPONDENTS/RESPONDENTS:

     1     THE FEDERAL BANK LTD
           REPRESENTED BY THE AUTHORISED OFFICER,
           LCRD/KOZHIKODE DIVISION, 1ST FLOOR,
           FEDERAL TOWERS, ARAYIDATHUPALAM,
           MAVOOR ROAD, KOZHIKODE 673 016

     2     THE BRANCH MANAGER,
           THE FEDERAL BANK LTD, MAIN ROAD,
           BALUSSERY, KOZHIKODE 673 016


           SRI. MOHAN JACOB GEORGE SC FOR RESPONDENTS

     THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
07.01.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
    W.A.1788/2020
                                        2

                                 JUDGMENT

Dated this the 7th day of January, 2021

S. Manikumar, CJ.

Being aggrieved by the judgment in W.P(C). No.24611 of 2020

dated 8.12.2020, instant writ appeal is filed. Short judgment impugned

in this writ appeal is extracted hereunder:

"The petitioner has approached this Court aggrieved by the recovery steps initiated by the respondent for recovery of defaulted loan amounts. Through a counter affidavit filed on behalf of the respondent, it is brought to my notice that the petitioner had already approached this Court on multiple occasions and by Ext.R1(C) judgment, the petitioner was required to discharge the then existing liability within a stipulated time. Not only is it not in dispute that the petitioner did not comply with the said direction, but the petitioner again approached this Court through W.P(C) No.2831 of 2019, which was disposed by Ext.P1 judgment, the conditions stipulated wherein were also not complied by the petitioner. Under the said circumstances, I am of the view that the petitioner cannot aspire for 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, without prejudice to the right of the petitioner, if any, to approach the Debt Recovery Tribunal, for appropriate reliefs."

2. Though Mrs. R. Vijayakumari, learned counsel for the

appellant advanced arguments on the basis of averments and grounds, W.A.1788/2020

having regard to the judgment 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 proceedings initiated under the SARFAESI Act, 2002

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

3. In Authorised Officer, State Bank of Travancore and Another v.

Mathew K.C. reported in (2018) 3 SCC 85, at paragraphs 15 to 18, the

Hon'ble Supreme 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:-

"46. It must be remembered that stay of an action initiated by the State and/or its W.A.1788/2020

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 then to pass a judicial order W.A.1788/2020

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 5.10.2018, the

Honourable 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 Supreme Court on

the maintainability of writ petitions relating to SARFAESI proceedings,

this Court on more than 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 the Constitution of India should not interfere in

contractual matters, in rescheduling loan payment.

6. Though Mrs. Vijayakumari, learned counsel for the appellant

submitted that Bank has already taken possession and in the absence W.A.1788/2020

of any further action, appellant is remediless, we are not inclined to

accept that contention for the reason that if any action is taken by the

Bank as per the provisions of SARFAESI Act, 2002, it is always open to

the appellant to challenge the same in accordance with law. Appeal

fails and it is dismissed.

Sd/-

S. Manikumar, Chief Justice

Sd/-

Shaji P. Chaly, Judge sou.