Kerala High Court
Dinesan vs Kerala State Co-Operative Bank on 6 February, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 6TH DAY OF FEBRUARY 2024 / 17TH MAGHA, 1945
WP(C) NO. 2684 OF 2024
PETITIONER:
DINESAN
AGED 53 YEARS
S/O KESAVAN MANICKAN ARACKAL HOUSE,
PALISSERY P.O. THRISSUR DISTRICT.,
PIN - 680027
BY ADV N.K.MOHANLAL
RESPONDENT:
KERALA STATE CO-OPERATIVE BANK
REPRESENTED BY AUTHORISED OFFICER
SAHAKARANA SATHAPTHI MANDIRAM,
KOVILAKATHUMPADAM, THRISSUR,
PIN - 680022
SRI.P.C.SASIDHARAN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 06.02.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.P.(C) No.2684/2024
:2:
N. NAGARESH, J.
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W.P.(C) No.2684 of 2024
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Dated this the 6th day of February, 2024
JUDGMENT
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The petitioner is Managing Director of a Private
Limited Company. The Company availed Overdraft facility of
₹5 Crores on 28.04.2015 from the respondent-Bank. Three
pieces of immovable property were mortgaged by way of
security.
2. When repayment of loan defaulted, the Bank
declared the Company account as NPA and invoked
proceedings under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act,
2002. Ext.P1 Section 13(4) possession notice was issued.
The Bank also filed arbitration case invoking Section 69 of
the Kerala Co-operative Societies Act for recovery of
₹7,68,13,635/-. The respondent approached the Chief
Judicial Magistrate's Court, Thrissur under Section 14 of the
Act, 2002. The CJM passed Ext.P3 order appointing an
Advocate Commissioner to take over physical possession of
the secured asset. The petitioner is challenging Ext.P1
notice and Ext.P3 order.
3. The petitioner states that the proceedings under
the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 is without
jurisdiction as proceedings were initiated before declaring the
loan account as NPA. Ext.P4 Section 14 notice indicated
that the initial notice under the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 was issued on 31.12.2016.
Ext.P2 ARC filed by the respondent would state that the
account was declared as Non Performing Asset on
01.05.2018. The securitisation proceedings were therefore
obviously initiated before declaring the account as Non
Performing Asset. Exts.P1 and P3 are therefore liable to be
set aside, contended the counsel for the petitioner.
4. The counsel for the petitioner further argued that
item No.3 property mentioned in Ext.P1 notice is an
agricultural property, which is evidenced by Ext.P4
photograph. There is a residential building also in the
property. Item No.1 property is also a residential plot.
Ext.P1 notice does not disclose existence of a residential
building. A tenant is residing in item No.1 property. This fact
was suppressed while filing affidavit in Chief Judicial
Magistrate's Court under Section 14 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002.
5. On behalf of the petitioner, it is further alleged that
possession notice was not affixed on the secured asset nor
was it published in newspapers. The security interest is not
registered at the Central Registry as contemplated under
Section 26B of the Act, 2002. The entire proceedings are
therefore illegal and arbitrary and are liable to be quashed.
6. I have heard the learned counsel for the petitioner
and the learned Standing Counsel representing the
respondent.
7. The prime argument of the petitioner is based on
Exts.P1 and P2. Ext.P1 indicates that notice under the Act,
2002 was issued on 31.12.2016 and the loan account was
declared NPA on 01.05.2018 subsequently. I find that based
on Exts.P1 and P2 alone, it cannot be concluded that
proceedings under the Act, 2002 were initiated before
declaring the loan account as NPA. It is possible that the
account was declared as Non Performing Asset even prior to
31.12.2016. These are matters of evidence.
8. The further allegation of the petitioner is that one
of the properties sought to be proceeded against is an
agricultural property and hence the said property cannot be
proceeded against under the Act, 2002. The petitioner would
further allege that possession notice had not been affixed on
the secured asset and was not published in newspapers.
These are also questions of fact. The Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 provides for an appellate remedy
under Section 18 which states that any person aggrieved by
any order made by the Debts Recovery Tribunal may prefer
an appeal to the Appellate Tribunal. The petitioner therefore
has an effective alternate remedy against Ext.P1 notice and
Ext.P3 order.
9. The counsel for the petitioner relied on the
judgment in South Indian Bank Limited and others v.
Naveen Mathew Philip and another [2023 (4) KLT 29] and
argued that alternative remedy shall not operate as a bar
when a writ petition is filed for enforcement of any
fundamental right or where there has been a violation of the
principles of natural justice or where the order or
proceedings are wholly without jurisdiction or when vires of
an Act is challenged. But, the issues involved in this case
consists questions of fact. The issues raised by the
petitioner involve disputed questions of facts which cannot be
adjudicated in exercise of writ jurisdiction under Article 226 of
the Constitution of India.
Under the circumstances, I do not deem it appropriate
to entertain this writ petition. The writ petition is therefore
dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/02.02.2024
APPENDIX OF WP(C) 2684/2024
PETITIONER'S EXHIBITS
Exhibit-P1 A TRUE COPY OF NOTICE OF POSSESSION
DATED 26/6/2018 ISSUED BY THE
RESPONDENT
Exhibit-P2 A TRUE COPY OF PLAINT IN ARC 629/2021
FILED BY RESPONDENT BANK FOR RECOVERY
OF RS. 7,68,13,635/-INCLUDING
INTEREST, PENAL INTEREST AND OTHER
CHARGES BEFORE JOINT REGISTRAR OF CO-
OPERATIVE SOCIETY, THRISSUR
Exhibit-P3 A TRUE COPY OF ORDER IN MC 563/2022
DATED 18/10/22 OF HON'BLE CHIEF
JUDICIAL MAGISTRATE,THRISSUR.
Exhibit-P4 A TRUE COPY OF PHOTOGRAPH SHOWING THE
CULTIVATION IN THE PROPERTY
RESPONDENT'S EXHIBITS
EXHIBIT R1(A) A TRUE COPY OF THE ADVOCATE
COMMISSIONER NOTICE DATED 1/12/2022
