Sarada P.P vs The State Bank Of India
2021 Latest Caselaw 8004 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

                 THE HONOURABLE SMT. JUSTICE P.V.ASHA

    TUESDAY, THE 09TH DAY OF MARCH 2021 / 18TH PHALGUNA, 1942

                      WP(C).No.21070 OF 2020(G)


PETITIONER:

               SARADA P.P.
               AGED 50 YEARS
               D/O. VELAYUDHAN, KORANAMTHODI HOUSE, THEKKUMMURI, P.O
               KARALAMANNA, PIN 679 506, PALAKKAD DISTRICT

               BY ADVS.
               SRI.C.R.REKHESH SHARMA
               SHRI.RAJESH O.N.

RESPONDENTS:

      1        THE STATE BANK OF INDIA
               RASMEC, OPP NSS KPT HIGH SCHOOL, TB ROAD, OTTAPALAM,
               PALAKKAD DIST, PIN 679 101

      2        THE STATE BANK OF INDIA,
               CHERUPULASSERY TOWN BRANCH, NEAR PLAZA, THEATRE,
               CHERPPULASSERY P.O, PIN 679 503, PALAKKAD DISTRICT.


               R1-2 BY ADV. SRI.GEORGE THOMAS (MEVADA)(SR.)
               R1-2 BY ADV. SRI.AMAL GEORGE

     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
09.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.21070 OF 2020(G)

                                    2




                        JUDGMENT

Dated this the 09th day of March 2021

The petitioner who is a poor Anganwadi

teacher, filed this writ petition challenging

Ext.P9 communication by which the sale in her

favour was cancelled and the amount paid by

the petitioner was forfeited. She had

submitted Ext.P8 representation explaining the

circumstances under which she was unable to

make the payment.

2. In the e-auction conducted by the 1st

respondent, SBI, a property which was

mortgaged by one Sumayya Hamsa was bid by the

petitioner. She remitted a sum of

Rs.1,73,700/- as earnest money deposit on

14.02.2020. She paid a sum of Rs.2,60,550/- on

29.02.2020 after confirmation of the bid. It

is stated that for payment of the balance

amount, petitioner had along with her son WP(C).No.21070 OF 2020(G)

applied for a housing loan from the 2 nd

respondent; but on account of the

unprecedented outbreak of Covid-19 pandemic,

it became impossible for petitioner's son

either to come or to send the requisite

documents including power of attorney, since

the Indian Embassy at Dubai was not working.

Hence the requisite documents for availing

housing loan could not be submitted in time.

Over and above that, the petitioner's son was

tested Covid-19 positive and was admitted in a

hospital at Dubai. In these circumstances,

petitioner was not able to raise funds for

payment of the balance amount within the time.

The petitioner had submitted Exts.P3 and P5

representations requesting for time for

completing the formalities, pointing out the

circumstances under which her son was unable

to furnish the relevant documents including

power of attorney or to arrange payment. But

as per Ext.P7 notice dated 25.05.2020, the WP(C).No.21070 OF 2020(G)

bank informed the petitioner that she was

granted time upto 25.05.2020 on her request

and in case, she did not make the balance

payment of Rs.13,12,750/- within seven days,

her bid would become null and the payment

already made by her would be forfeited. The

petitioner thereupon again submitted Ext.P8

representation dated 10.07.2020 informing that

a sum of Rs. 13,12750/- required for the

balance payment is available in her account in

the Cherupalasseri branch of SBI and

requesting for taking steps for finalising the

further proceedings pursuant to the auction

and to transfer the property in her name. But

as per Ext.P9 letter, the respondent Bank

informed her that the sale was cancelled since

she did not comply with the terms of the

auction. It was also stated that a sum of

Rs.4,34,250/-, which she had remitted, has

been forfeited. The Bank stated that

petitioner should have remitted the balance WP(C).No.21070 OF 2020(G)

payment within 15 days of the date of auction

viz. 26.02.2020. Though she was given further

time upto 25.05.2020, petitioner did not make

the payment of Rs. 13,12,750/-. The

petitioner has filed this Writ petition

challenging Ext.P9 communication and for

seeking a direction to get the auction

confirmed in her name and not to sell the

property to anybody else.

3. The respondents have filed a counter

affidavit. It is stated that the additional

respondent Nos.3 and 4 had availed housing

loan from the respondent Bank on the security

of their property. It is stated that the

SARFAESI proceedings were initiated against

them since they defaulted the repayment and

the property was taken delivery by the Bank in

that execution proceedings. That property was

put in e-auction conducted on 26.02.2020 and

petitioner was the successful bidder and she

remitted 25% of the bid amount. It is stated WP(C).No.21070 OF 2020(G)

that as per Rule 9(4) of the Security Interest

(Enforcement) Rules, the balance amount is to

be paid within 15 days of the confirmation of

sale and extension of time cannot be granted

in excess of three months. It is stated that

since petitioner did not make the payment

within the extended time, her bid was

cancelled forfeiting the earnest money in

accordance with the provisions contained in

Rule 9(5) of those Rules.

4. As it was pointed out by the

respondent Bank that the original owners whose

property was put in auction are parties who

are necessary for adjudication of the case,

since the property was taken over under the

SARFAESI Act, the petitioner impleaded the

owners. Even though notice was taken out by

paper publication also, the additional

respondents have not entered appearance.

5. The petitioner has filed a reply

affidavit explaining how the pandemic has WP(C).No.21070 OF 2020(G)

shattered her dreams and put her to more

prejudice by forfeiting of the earnest money

deposit which she and her son had raised out

of lifelong efforts.

6. I heard the learned Counsel on both

sides. Though the bank has stated that they

have acted strictly in accordance with rules,

it is seen that the petitioner became unable

to make the balance payment in view of the

unforeseen circumstances on account of the

outbreak of Covid-19 pandemic. Her son was

unable to get any flight to come over and

execute the loan documents; it is known to all

that there was complete lockdown from

24.02.2020 onwards and the position continued

to be the same even on 25.05.2020, the date on

which the extended period also expired. It is

seen that the petitioner has already raised

sufficient funds for payment of balance amount

for the purchase of the property, as can be

seen from Ext.P2.

WP(C).No.21070 OF 2020(G)

7. In view of the peculiar circumstances

arising in this case which prevented the

petitioner from availing the loan in the

absence of her son or his power of attorney,

it is a fit case where the Bank has to

consider the case of petitioner with some

humanitarian consideration. Petitioner does

not have any other property. The cancellation

of the bid and forfeiture of the hard earned

money of petitioner and her son, paid towards

EMD, would be harsh to a person who was

affected by the Vis major. The peculiar

circumstances arising in the case would

require the respondent to review their

decision to cancel the bid confirmed in the

name of petitioner.

8. Therefore Exts. P7 and P9 are set

aside. There shall be a direction to the

respondent bank to permit the petitioner to

remit the balance amount towards the sale on

the basis of the auction conducted on WP(C).No.21070 OF 2020(G)

26.02.2020.

9. As there is delay in payment, the

petitioner shall pay interest at the rate of

5.5% per annum on the balance payment.

The respondent Bank shall thereupon take

all steps to complete the formalities for

transfer of the property to petitioner

including handing over of the documents to

the petitioner within a period of one month.

The writ petition is accordingly disposed

of.

Sd/-

P.V.ASHA JUDGE DM WP(C).No.21070 OF 2020(G)

APPENDIX PETITIONER'S EXHIBITS:

EXHIBIT P1 THE TRUE COPY OF THE ADVERTISEMENT OF E AUCTION DATED 26-02-2020

EXHIBIT P2 THE TRUE COPY OF THE BANK STATEMENT OF THE PETITIONER IN SBI CHERPULASSERY TOWN BRANCH IN SB ACCOUNT HAVING NUMBER 67148869044

EXHIBIT P3 THE TRUE COPY OF THE REPRESENTATION DATED 29-02-2020

EXHIBIT P4 THE TRUE COPY OF THE COVID PCR PCR TEST RESULT OF THE PETITIONER'S SON

EXHIBIT P5 THE TRUE COPY OF THE REQUEST LETTER SHE SUBMITTED BEFORE THE RESPONDENT ON 20-05-2020

EXHIBIT P6 THE TRUE COPY OF THE POWER OF ATTORNEY OF THE PETITIONER'S SON ATTESTED WHEN THE EMBASSY HAS BECOME OPERATIONAL, FOR AVAILING THE LOAN

EXHIBIT P7 THE TRUE COPY OF THE NOTICE OF THE RESPONDENT DATED 25-05-2020 REJECTING EXT.P5

EXHIBIT P8 THE TRUE COPY OF THE REPRESENTATION DATED 10-07-2020 BY THE PETITIONER.

EXHIBIT P9 THE TRUE COPY OF THE CANCELLATION LETTER ISSUED BY THE FIRST RESPONDENT DATED 15-09-2020

RESPONDENTS EXHIBITS:

EXHIBIT R1(a) TRUE PHOTOCOPY OF THE SALE NOTICE DATED 24/01/2020.

//TRUE COPY//

PA TO JUDGE