Rajagopal V vs State Bank Of India
2024 Latest Caselaw 13712 Ker

Kerala High Court

Rajagopal V vs State Bank Of India on 28 May, 2024

Author: N.Nagaresh

Bench: N.Nagaresh

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                        PRESENT
          THE HONOURABLE MR.JUSTICE N.NAGARESH
 TUESDAY, THE 28TH DAY OF MAY 2024 / 7TH JYAISHTA, 1946
                 WP(C) NO. 7779 OF 2024
 OA NO.460 OF 2022 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM
PETITIONER/DEFENDANT:

         RAJAGOPAL V.
         AGED 54 YEARS, S/O. VISWANATHA VELAR S.
         NO.8/470, KUPPAYANCHALLA, K.K.POST,
         THEKKEDESAM VILLAGE, CHITTUR TALUK,
         PIN - 678 101.

         BY ADVS.
              REJI GEORGE
              ANUPAMA JOHNY
              SAISANKAR.S

RESPONDENT/APPLICANT:

    1    STATE BANK OF INDIA
         ASSET RECOVERY AND MANAGEMENT BRANCH, 40/947,
         1ST FLOOR R.S. BUILDING,
         OPP. MAHARAJAS COLLEGE GROUND, M.G.ROAD,
         ERNAKULAM, REPRESENTED BY ITS CHIEF MANAGER,
         PIN - 682 011.

    2    THE AUTHORIZED OFFICER
         STATE BANK OF INDIA,
         ASSET RECOVERY AND MANAGEMENT BRANCH, 40/947,
         1ST FLOOR R.S. BUILDING,
         OPP. MAHARAJAS COLLEGE GROUND, M.G.ROAD,
         ERNAKULAM, PIN - 682 011.

         BY ADV
              TOM K.THOMAS

     THIS WRIT PETITION (CIVIL) HAVING COME UP       FOR
ADMISSION ON 28.05.2024, THE COURT ON THE SAME       DAY
DELIVERED THE FOLLOWING:
 W.P.(C) No.7779 of 2024
                                    :2:



                               JUDGMENT

Dated this the 28th day of May, 2024

The petitioner, who has availed financial assistance

from the State Bank of India and who is facing coercive

proceedings under the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act,

2002, has filed this writ petition invoking Article 226 of the

Constitution of India seeking the following reliefs:

i. To set aside Ext.P11 possession notice issued by the second Respondent and Ext.P13 order issued by the Chief Judicial Magistrate's Court, Palakkad in M.C.No.3/2024.

ii. To dispense with the filing of the translation of the documents in vernacular language.

iii. To pass such other order or direction as is found just and proper to the facts and circumstances of the case.

2. It is evident from the pleadings that the petitioner

has approached this Court challenging Ext.P11 Possession

Notice and Ext.P13 order issued by the Chief Judicial

Magistrate Court, Palakkad, which are impugned orders

passed under Sections 17 and 14 of the Securitisation and

Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002. The petitioner has therefore an

effective remedy before the Debts Recovery Tribunal.

3. Counsel appearing for the petitioner would urge that

the property proceeded against by the Bank is being an

agricultural property, it cannot be a secured asset. If it is not a

secured asset, then the petitioner is at liberty to approach this

Court under Article 226 of the Constitution of India or any other

court. The petitioner cannot be forced to approach the Debts

Recovery Tribunal itself.

4. The Counsel for the petitioner relied on the Division

Bench judgment of this Court in Elsamma and Others v.

Kaduthuruthy Urban Co-operative Bank Limited and

Others [2018 (5) KHC 701], wherein this Court held as

follows:

7.It was inter alia contended that Sub-sections (2) and (3) of Section 17 of the SARFAESI Act provide sufficient safeguards for restoration of possession of property which is not a secured asset. Section 17(2) enables the Debts Recovery Tribunal to consider as to whether the measures taken by the secured creditor for enforcement of security are proper. Section 17(3) which follows Section 17(2) empowers the Debts Recovery Tribunal to declare the measures taken as invalid and restore possession. Both Sections 17(3) and 17(2) of the SARFAESI Act are confined to the measures taken by the 'secured creditor' and in relation to the 'secured

asset'. We do not think that the above statutory provisions can be called in aid when property which is allegedly not a secured asset is to be taken possession of. The parties need be relegated to Section 17 of the SARFAESI Act only if it is found that the acts complained of are in relation to a property which is a secured asset.

              xxxx          xxxx          xxxx

           13.To sum up:

(i) The jurisdiction of the Civil Court is not barred if the plea is that the plaint schedule property is not the secured asset in respect of which a security interest is created.

(ii) The Civil Court shall decline jurisdiction if it is found in the midst of adjudication that the disputed property is in fact the secured asset over which security interest is created.

(iii) Any person aggrieved can also move the Debts Recovery Tribunal under Section 17 seeking clarification about the measures taken under Section 13(4) of the SARFAESI Act.

(iv) The decision in KHDFC Bank Ltd.'s case (supra) is approved and does not militate against Jagdish Singh's case (supra) wherein the property is admittedly a secured asset.

5. Standing Counsel entered appearance on behalf of

the respondents and resisted the writ petition filing a counter

affidavit. In the counter affidavit, the respondents submitted

that the question as to the nature of the secured asset cannot

be adjudicated before this Court under Article 226 of the

Constitution of India, in view of the fact that disputed facts are

involved. The documents produced by the petitioner in support

of his contention that the property in question is an agricultural

property cannot be relied on by this Court to hold that the

property of the petitioner is an agricultural land. Moreover, two

items of property are proceeded under the provisions of the

SARFAESI Act. The documents produced by the applicant

shows that only an extend of 2.5 Ares of land is utilised for

agricultural purpose. From the description of the property No.2

it could be seen that the said property is a house site, wherein

the residential building of the petitioner is situated.

6. The notice under 13(2) of the SARFAESI Act was

issued to the petitioner as early as on 03.06.2022. The

petitioner received the above notice. However, no

reply/objection was given by the petitioner, whereby accepting

that the property described therein are liable to be proceeded

under the provisions of the SARFAESI Act. Once the notice of

demand is served, the mandate of the Act, as evident from

Section 13(3) A, is the availability of an opportunity to the

borrower to raise any objection against the notice Issued. This

statutory notice enables the borrower to raise an objection to

any of the ground available to him. In this case, admittedly no

objection was raised by the borrower or guarantor in respect of

the secured asset specifically scheduled in the notice issued

under Sec. 13(2) of the Act. The petitioner did not avail the

opportunity available to object. Hence, he cannot now turn

around and question the proceedings initiated by the bank on

the ground that the property proceeded against is liable to be

exempted under Sec.31 (1) of the SARFAESI Act.

7. Heard the learned Counsel for the petitioner and the

learned Standing Counsel for the respondents.

8. The argument of the petitioner, in short, is that the

property proceeded against by the Bank is agricultural property

and therefore, it is exempted from the proceedings, under

Section 31(i) of the SARFAESI Act, 2002. The proceedings

initiated by the Bank are therefore highly illegal and arbitrary.

As the agricultural property of the petitioner cannot be a

secured asset, if the Bank or anyone else tries to take

possession of the said property, the petitioner can approach

other Civil Courts than the Debts Recovery Tribunal.

9. Assuming that the petitioner's contention based on

the Division Bench judgment in Elsamma and

Others (Supra) is correct, even then a writ petition under

Article 226 of the Constitution of India is not maintainable, as

the dispute involved becomes a dispute of civil nature between

the petitioner and the Bank.

10. In such circumstances, the petitioner may have to

approach the Civil Court / Debts Recovery Tribunal, as the

petitioner is advised.

With the above observation, the writ petition is

disposed of.

Sd/-

N. NAGARESH JUDGE AMR

APPENDIX OF WP(C) 7779/2024

PETITIONER'S EXHIBITS

Exhibit P1 A TRUE COPY OF PARTITION DEED NO.1653/1961 DATED 11.12.1961 OF CHITTUR SUB REGISTRY.

Exhibit P1(a) A TRUE COPY OF PURCHASE CERTIFICATE NO.457/1971 DATED 27.10.1971 ISSUED BY THE LAND TRIBUNAL, CHITTUR.

Exhibit P2 A TRUE COPY OF PADDY RECEIPT SHEET DATED 03.04.2008 ISSUED BY THE KERALA STATE CIVIL SUPPLIES CORPORATION LTD.

Exhibit P2(a) A TRUE COPY OF PADDY RECEIPT SHEET DATED 29.10.2009 ISSUED BY THE KERALA STATE CIVIL SUPPLIES CORPORATION LTD.

Exhibit P2(b) A TRUE COPY OF PADDY RECEIPT SHEET DATED 06.05.2022 ISSUED BY THE KERALA STATE CIVIL SUPPLIES CORPORATION LTD.

Exhibit P2(c) A TRUE COPY OF PADDY RECEIPT SHEET DATED 16.05.2023 ISSUED BY THE KERALA STATE CIVIL SUPPLIES CORPORATION LTD.

Exhibit P3 A TRUE COPY OF O.A.NO.460/2022, WITHOUT ITS ANNEXURES, FILED BY THE FIRST RESPONDENT BEFORE THE DEBTS RECOVERY TRIBUNAL - I, ERNAKULAM.

Exhibit P4 A TRUE COPY OF THE LETTER OF SANCTION DATED 01.07.2010 OF THE AGRI CASH CREDIT FACILITY OF RS.1,00,000/- PRODUCED AS ANNEXURE-A1 ALONG WITH EXT.P3 MEMORANDUM OF ORIGINAL APPLICATION.

Exhibit P5 A TRUE COPY OF THE AGREEMENT FOR HYPOTHECATION DATED 07.07.2010 PRODUCED AS ANNEXURE-A2 ALONG WITH EXT.P3 MEMORANDUM OF ORIGINAL APPLICATION.

Exhibit P6 A TRUE COPY OF THE LETTER OF ARRANGEMENT DATED 18.08.2016 PRODUCED AS ANNEXURE-A3 ALONG WITH EXT.P3 MEMORANDUM OF ORIGINAL APPLICATION.

Exhibit P7 A TRUE COPY OF THE HYPOTHECATION AGREEMENT DATED 18.08.2016 PRODUCED AS ANNEXURE-A4 ALONG WITH EXT.P3 MEMORANDUM OF ORIGINAL APPLICATION.

Exhibit P8 A TRUE COPY OF CERTIFICATE NO.77/2023 DATED 25.09.2023 ISSUED BY THE VILLAGE OFFICER, THEKKEDESAM.

Exhibit P9 A TRUE COPY OF CERTIFICATE NO. NIL DT.

21.09.2023 ISSUED BY THE AGRICULTURAL OFFICER, KRISHI BHAVAN, NALLEPPILLI, PALAKKAD.

Exhibit P10        TWO   PHOTOGRAPHS    OF    THE    MORTGAGED
                   PROPERTY   OWNED  BY    THE    PETITIONER'S
                   FATHER.

Exhibit P11        A TRUE COPY OF THE POSSESSION       NOTICE
                   DT.15.09.2023   ISSUED   BY  THE     FIRST
                   RESPONDENT TO THE PETITIONER

Exhibit P12        A TRUE COPY OF THE NOTICE DT.09.02.2024

ISSUED TO THE PETITIONER BY THE ADVOCATE COMMISSIONER IN M.C.NO.3/2024 ON THE FILE OF THE CHIEF JUDICIAL MAGISTRATE'S COURT, PALAKKAD.

Exhibit P13 A TRUE COPY OF THE ORDER DATED 08.01.2024 PASSED BY THE CHIEF JUDICIAL MAGISTRATE'S COURT, PALAKKAD IN M.C.NO.3/2024.

RESPONDENTS' EXHIBITS

Exhibit R1(a) TRUE COPY OF THE NOTICE UNDER SEC.13(2) OF THE SARFAESI ACT DATED 03.06.2022 ISSUED TO THE PETITIONER