[Cites 14, Cited by 0]
Kerala High Court
A K S Cold Storage Ltd vs Reserve Bank Of India on 17 December, 2025
Author: Anil K.Narendran
Bench: Anil K.Narendran
1
W.A.No.2802 of 2025
2025:KER:96833
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
&
THE HONOURABLE MR.JUSTICE MURALEE KRISHNA S.
WEDNESDAY, THE 17TH DAY OF DECEMBER 2025 / 26TH AGRAHAYANA, 1947
WA NO. 2802 OF 2025
AGAINST THE JUDGMENT DATED 24.06.2025 IN WP(C) NO.21471 OF
2025 AND ORDER DATED 24.10.2025 IN R.P.No.1093 OF 2025 OF HIGH
COURT OF KERALA
APPELLANTS/WRIT PETITIONERS:
1 A K S COLD STORAGE LTD.,
SF NO.43 1 G2, AROOR JUNCTION, AROOR POST, ALAPPUZHA,
KERALA, REPRESENTED BY ITS MANAGING DIRECTOR, MR. A K
S SARAVANAN, AGED 53 YRS, S/O. A K SUBRAMANIAM, PIN -
688543
2 MR. A K S SARAVANAN,
AGED 53 YEARS
S/O A K SUBRAMANIAM, RESIDING AT 1-A-1, SARAVANA
ILLAM, MAHADEVAPURAM, CHIKKADASAMPALAYAM VILLAGE,
METTUPAYALAM (TK), COIMBATORE, TAMIL NADU, PIN -
641305
BY ADVS.
SRI.P.JINISH PAUL
SMT.SNEHA V.
SRI.T.KRISHNANUNNI (SR.)
RESPONDENTS/RESPONDENTS:
1 RESERVE BANK OF INDIA,
BAKERY JUNCTION ROAD, NANDAVANAM, PALAYAM,
THIRUVANANTHAPURAM, KERALA, REPRESENTED BY ITS
REGIONAL DIRECTOR, PIN - 695033
2
W.A.No.2802 of 2025
2025:KER:96833
2 CONSORTIUM OF INDIAN BANK AND CANARA BANK,
REPRESETED BY THE CHIEF MANAGER OF THE LEADER BANK
(INDIAN BANK), 143 OOTY MAIN ROAD, METUPALAYAM, TAMIL
NADU, PIN - 641301
3 THE INDIAN BANK LIMITED,
STRESSED ASSETS MANAGEMENT VERTICAL BRANCH, 1ST FLOOR,
NEAR CARMEL GARDEN MHS SCHOOL, PULIAKULAM MAIN ROAD,
COIMBATORE, REPRESENTED BY ITS AUTHORIZED OFFICER, PIN
- 641045
4 CANARA BANK LTD.,
ASSET RECOVERY MANAGEMENT BRANCH, 524, 8TH FLOOR,
CIRCLE OFFICE BUILDING, ANNA SALAI, TEYNAMPET,
CHENNAI- REPRESENTED BY ITS AUTHORISED OFFICER, PIN -
600018
5 KERALA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT
CORPORATION,KINFRA HOUSE, T.C NO.31/2312,
SASTHAMANGALAM, TRIVANDRUM, REPRESENTED BY ITS
MANAGING DIRECTOR, PIN - 695010
OTHER PRESENT:
SRI. BINOY VASUDEVAN, SC, INDIAN BANK;
SRI.M. GOPIKRISHNAN NAMBIAR, SC FOR CANANRA BANK;
SRI.P. U. SHAILAJAN, SC, KINFRA
THIS WRIT APPEAL WAS FINALLY HEARD ON 05.12.2025, THE COURT
ON 17.12.2025 PASSED THE FOLLOWING:
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JUDGMENT
Muralee Krishna, J.
The petitioners in W.P.(C)No.21471 of 2025 filed this writ
appeal under Section 5(i) of the Kerala High Court Act, 1958,
challenging the judgment dated 24.06.2025 in that writ petition
and the order dated 24.10.2025 in R.P.No.1093 of 2025, passed
by the learned Single Judge.
2. The appellants filed W.P.(C)No.21471 of 2025, invoking
the writ jurisdiction of this Court under Article 226 of the
Constitution of India, seeking a writ of mandamus commanding
the respondents to withdraw all further proceedings against the
appellants under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI
Act' in short), especially against the property measuring 1.06
acres in Survey Nos.502/2 and 507/1 situated in Pudussery
Central Village, Palakkad Taluk, belonging to the 5 th respondent
and all the assets situated therein. The appellants have also
sought for a writ of certiorari to quash Ext.P19 possession notice
dated 16.05.2025 issued by the 3rd respondent Indian Bank Ltd.,
Stressed Assets Management Vertical Branch, Coimbatore.
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3. Going by the averments in the writ petition, the 1 st
appellant is a public Limited company incorporated on 09.01.2003
under the Companies Act, and the 2nd appellant is its Managing
Director. The initial name of the company was 'SH Cold Storage
Private Limited', and the same was subsequently changed to the
present name on 01.12.2014. In the year 2012, the 1st appellant
had taken a land from the 5th respondent for establishing a cold
storage as per Ext.P3 agreement. The 1st appellant had also
availed a loan from the 3rd respondent based on Ext.P3 and NOC
from the 5th respondent. Subsequently, the NOC expired, and the
loan was subsequently provided by another entity created by the
3rd respondent and 4th respondent as a consortium, namely the
2nd respondent. However, there was no fresh NOC in favour of the
2nd respondent nor any new lease agreement between the 1 st
appellant and the 5th respondent. Hence, there is no valid
mortgage for proceeding under the SARFAESI Act by the
respondent banks. Further, the NPA classification is also in
violation of the RBI guidelines, MSME Act and its Rules, apart from
the Consortium norms violations by the 3rd respondent. Therefore,
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the coercive proceedings initiated against the appellants are illegal
and unsustainable. The 1st appellant and the property sought to
be possessed as per Ext. P19 are within the jurisdiction of this
Court. Hence, the appellants filed the writ petition before this
Court.
4. On 24.06.2025, when the writ petition came up for
consideration, the learned Single judge, by the impugned
judgment, closed the writ petition. The said judgment read thus:
"The petitioner challenges Ext.P19, which is the Possession
Notice issued by the Bank dated 16.05.2025.
Today, when the matter is taken up, the 3rd respondent
Bank, made available a copy of the proceedings withdrawing
the possession notice dated 16.05.2025. Given the above,
nothing further is required to be considered in this writ
petition. The writ petition is accordingly closed without
prejudice to the right of the petitioners to challenge the
actions of the secured creditor, if the petitioners are
aggrieved. All the contentions of the petitioners are left
open."
5. Challenging the aforesaid judgment dated 24.06.2025
passed by the learned Single Judge, the appellants filed
W.A.No.1644 of 2025. By the judgment dated 04.08.2025, this
Court closed that writ appeal, considering the submission made
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by the learned Senior Counsel for the appellants, holding that the
remedy open to the appellants is to file a review petition before
the learned Single Judge, seeking review of the impugned
judgment. Paragraph 5 and the last paragraph of that judgment
read thus:
"5. The learned Senior Counsel for the appellants, on
instructions from the learned instructing counsel
would submit that on 24.06.2025, when the learned
counsel for the 3rd respondent Indian Bank Limited
handed over a letter dated 20.06.2025 regarding
withdrawal of Ext.P19 possession notice dated
16.05.2025 due to technical reasons, it was pointed
out before the learned Single Judge that the basic
proceedings pursuant to the notice issued under the
provisions of the SARFAESI Act, 2002, is still pending
against the appellants herein and therefore, time was
sought to challenge the said notice by amending the
writ petition. The arguments advanced by the learned
counsel regarding illegal classification of the account
as NPA, with specific reference to the grounds raised
in the writ petition, were not adverted to by the
learned Single Judge while closing the writ petition.
Having considered the aforesaid submissions made by
the learned Senior Counsel for the appellants, we are
of the view that, the remedy open to the appellants-
writ petitioners is to file a review petition before the
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learned Single Judge, seeking review of the judgment
dated 24.06.2025 in W.P.(C)No.21471 of 2025.
Without prejudice to the aforesaid right of the
appellants, this writ appeal is closed, leaving open the
legal and factual contentions raised by both sides".
6. After the disposal of W.A.No.1644 of 2025, the appellants
filed R.P.No.1093 of 2025 before the learned Single Judge.
However, by the order dated 24.10.2025, the learned Single Judge
closed the said review petition, holding that all grounds raised by
the appellants on the invalidity of the mortgage and other
statutory grounds can be raised before the Debts Recovery
Tribunal under Section 17 of the SARFAESI Act. Paragraphs 2 and
the last paragraph of that order read thus:
"2. The learned Senior Counsel appearing for the petitioners
would argue that the ground of invalidity of the mortgage
and the statutory noncompliance with the notifications
issued by the Reserve Bank, which afforded protection to
the MSMEs, are questions to be considered in this Review
Petition. The question of the invalidity of the mortgage,
which involves questions of fact as well, can be raised before
the Tribunal, which is a Tribunal of law and facts. Since the
petitioners have an effective alternate statutory remedy
against the actions of the secured creditor, I am not inclined
to entertain this Review Petition. All grounds raised by the
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petitioners on the invalidity of the mortgage and other
statutory grounds can be raised before the Debts Recovery
Tribunal under Section 17 of the SARFAESI Act.
Without prejudice to the right of the petitioners to avail of
the same, this review petition is closed".
7. Being aggrieved by the judgment passed in the writ
petition and the order in the review petition by the learned Single
Judge, the appellants are now before this Court with the present
writ appeal.
8. Heard the learned Senior Counsel for the appellants,
the learned Standing Counsel for the Indian Bank Ltd, the learned
Standing Counsel for the Canara Bank and the learned counsel for
the 5th respondent Kerala Industrial Infrastructure Development
Corporation.
9. The learned Senior Counsel for the appellants would
argue that in the impugned judgment passed in the writ petition
and in the order passed in the review petition, the learned Single
Judge did not consider the contentions of the appellants on merits.
In fact, the appellants have a case that the property against which
the Bank proceeded was not at all validly mortgaged to the Bank
for proceeding against it under the provisions of the SARFAESI
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Act. The learned Senior Counsel further submitted that Section
31(e) of the Unamended SARFAESI Act, which was applicable at
the relevant time, has to be taken into consideration, as per which
the provisions of the Act do not apply to any conditional sale, hire-
purchase or lease or any other contract in which no security
interest has been created. Therefore, in the present case, since it
involves a lease arrangement, the SARFAESI Act cannot be
applied.
10. On the other hand, the learned Standing Counsel for the
3rd respondent Indian Bank, argued that the appellants had
approached the High Court of Judicature at Madras by filing
W.P.No.12656 of 2022 when the Bank issued notice under Section
13(2) of the SARFAESI Act. However, by the judgment dated
24.06.2022, the High Court of Judicature at Madras disposed of
that writ petition, granting liberty to the appellants to take remedy
of sending a reply or objection by invoking Section 13(3A) of the
SARFAESI Act and then to take a remedy further, if the objection
or reply is not appropriately considered by the Bank. Thereafter,
the appellants have sent a detailed objection dated 22.06.2022,
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which is produced as Annexure R3(d) along with the statement
filed on behalf of the 3rd respondent Bank in R.P.No.1093 of 2025.
To that objection, the 3rd respondent Bank sent a rejoinder dated
08.07.2022, which is produced as Annexure R3(e) along with the
statement filed in the review petition. The learned Standing
Counsel further submitted that subsequent to the issuance of
notice under Section 13(2) of the SARFAESI Act, some of the
properties of the appellants situated in Tamil Nadu are sold by
following the procedure. It is vehemently submitted by the
learned Counsel that against the proceedings initiated by the Bank
under the provisions of the SARFAESI Act, the remedy of the
appellants is under Section 17 of the said Act before the Debts
Recovery Tribunal and not a writ petition. Therefore, the present
writ appeal is not maintainable.
11. From the prayers in the writ petition, we notice that
the reliefs sought by the appellants are against the proceedings
initiated by the respondents under the provisions of the SARFAESI
Act against the secured asset. According to the appellants, the
property against which the respondents now started proceedings
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under the provisions of the SARFAESI Act is not validly mortgaged.
While appreciating the aforesaid contention of the appellants and
also the contention of the respondents regarding the
maintainability of the writ petition, it would be appropriate to go
through Section 17 of the SARFAESI Act and also some of the
judgments on the point. Section 17 of the SARFAESI Act reads
thus:
"17. Application against measures to recover secured debts
(1) Any person (including borrower), aggrieved by any of
the measures referred to in sub-section (4) of section 13
taken by the secured creditor or his authorised officer under
this Chapter, may make an application along with such fee,
as may be prescribed to the Debts Recovery Tribunal having
jurisdiction in the matter within forty-five days from the date
on which such measures had been taken:
Provided that different fees may be prescribed for making
the application by the borrower and the person other than
the borrower.
Explanation.-For the removal of doubts it is hereby declared
that the communication of the reasons to the borrower by
the secured creditor for not having accepted his
representation or objection or the likely action of the
secured creditor at the stage of communication of reasons
to the borrower shall not entitle the person (including
borrower) to make an application to the Debts Recovery
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Tribunal under sub-section (1) of Section 17.
3A(1A) An application under sub-section (1) shall be filed
before the Debts Recovery Tribunal within the local limits of
whose jurisdiction-
(a) the cause of action, wholly or in part, arises;
(b) where the secured asset is located; or
(c) the branch or any other office of a bank or financial
institution is maintaining an account in which debt claimed
is outstanding for the time being.
(2) The Debts Recovery Tribunal shall consider whether any
of the measures referred to in sub-section (4) of section 13
taken by the secured creditor for enforcement of security
are in accordance with the provisions of this Act and the
rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the
facts and circumstances of the case and evidence produced
by the parties, comes to the conclusion that any of the
measures referred to in sub-section (4) of section 13, taken
by the secured creditor are not in accordance with the
provisions of this Act and the rules made thereunder, and
require restoration of the management or restoration of
possession, of the secured assets to the borrower or other
aggrieved person, it may, by order,-
(a) declare the recourse to any one or more measures
referred to in sub-section (4) of section 13 taken by the
secured creditor as invalid; and
(b) restore the possession of secured assets or management
of secured assets to the borrower or such other aggrieved
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person, who has made an application under sub-section (1),
as the case may be; and
(c) pass such other direction as it may consider appropriate
and necessary in relation to any of the recourse taken by
the secured creditor under sub-section (4) of section 13.
(4) If, the Debts Recovery Tribunal declares the recourse
taken by a secured creditor under sub-section (4) of section
13, is in accordance with the provisions of this Act and the
rules made thereunder, then, notwithstanding anything
contained in any other law for the time being in force, the
secured creditor shall be entitled to take recourse to one or
more of the measures specified under sub-section (4) of
section 13 to recover his secured debt.
(4A) Where-
(i) any person, in an application under sub-section (1),
claims any tenancy or leasehold rights upon the secured
asset, the Debt Recovery Tribunal, after examining the facts
of the case and evidence produced by the parties in relation
to such claims shall, for the purposes of enforcement of
security interest, have the jurisdiction to examine whether
lease or tenancy,-
(a) has expired or stood determined; or
(b) is contrary to section 65A of the Transfer of Property
Act, 1882;
or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of default and
demand by the Bank under sub-section (2) of section 13 of
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the Act; and
(ii) the Debt Recovery Tribunal is satisfied that tenancy right
or leasehold rights claimed in secured asset falls under the
sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-
clause (d) of clause (i), then notwithstanding anything to
the contrary contained in any other law for the time being
in force, the Debt Recovery Tribunal may pass such order as
it deems fit in accordance with the provisions of this Act.
(5) Any application made under sub-section (1) shall be
dealt with by the Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty days from the date
of such application:
Provided that the Debts Recovery Tribunal may, from time
to time, extend the said period for reasons to be recorded
in writing, so, however, that the total period of pendency of
the application with the Debts Recovery Tribunal, shall not
exceed four months from the date of making of such
application made under sub-section (1).
(6) If the application is not disposed of by the Debts
Recovery Tribunal within the period of four months as
specified in sub-section (5), any party to the application
may make an application, in such form as may be
prescribed, to the Appellate Tribunal for directing the Debts
Recovery Tribunal for expeditious disposal of the application
pending before the Debts Recovery Tribunal and the
Appellate Tribunal may, on such application, make an order
for expeditious disposal of the pending application by the
Debts Recovery Tribunal.
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(7) Save as otherwise provided in this Act, the Debts
Recovery Tribunal shall, as far as may be, dispose of
application in accordance with the provisions of the
Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993) and the rules made thereunder".
(Underline supplied)
12. In Authorized Officer, State Bank of Travancore
and Another v. Mathew K.C. [2018 (1) KHC 786], the Apex
Court held that the High Court under Article 226 of the
Constitution of India can entertain a writ petition only under
exceptional circumstances and that it is a self-imposed restraint
by the High Court. The four exceptional circumstances such as,
where the statutory authority has not acted in accordance with
the provisions of the enactment in question, or in defiance of the
fundamental principles of judicial procedure, or has resorted to
invoke the provisions which are repealed, or when an order has
been passed in total violation of the principles of natural justice,
were reiterated in paragraph 6 of the said judgment by relying on
the judgment of the Apex Court in Commissioner of Income
Tax and Others v. Chhabil Dass Agarwal [(2014) 1 SCC
603].
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13. In South Indian Bank Ltd. (M/s.) v. Naveen
Mathew Philip [2023 (4) KLT 29] after discussing the various
judgments on the point as to circumstances in which the High
Court can interfere with matters pertaining to the SARFAESI Act,
it is held by the Apex Court as under:
"Unfortunately, the High Court overlooked the settled law
that the High Court will ordinarily not entertain a petition
under Article 226 of the Constitution if an effective
remedy is available to the aggrieved person and that this
rule applies with greater rigour in matters involving
recovery of taxes, cess, fees, other types of public money
and the dues of banks and other financial institutions. In
our view, while dealing with the petitions involving
challenge to the action taken for recovery of the public
dues, etc. the High Court must keep in mind that the
legislations enacted by Parliament and State Legislatures
for recovery of such dues are a code unto themselves
inasmuch as they not only contain comprehensive
procedure for recovery of the dues but also envisage
constitution of quasi - judicial bodies for redressal of the
grievance of any aggrieved person. Therefore, in all such
cases, the High Court must insist that before availing
remedy under Article 226 of the Constitution, a person
must exhaust the remedies available under the relevant
statute". (Underline supplied)
14. In PHR Invent Educational Society v. UCO Bank
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[2024 (3) KHC SN 3] the Apex Court held that it is more than a
settled legal position of law that in matters arising out of RDB Act
and SARFAESI Act, the High Court should not entertain a petition
under Art.226 of the Constitution, particularly when an alternative
statutory remedy is available.
15. A learned Single Judge of this Court in Jasmin K. v.
State Bank of India [2024 (3) KHC 266] reiterated the
position of law laid down by the Apex Court in the aforementioned
judgments.
16. From the judgments referred to supra, it is clear that
unless any of the four exceptional circumstances mentioned by
the Apex Court in Mathew K.C. [2018 (1) KHC 786] is made
out, the appellants cannot invoke the writ jurisdiction of this Court
under Article 226 of the Constitution of India, against the
proceedings initiated by the Bank under the provisions of the
SARFAESI Act. From the materials placed on record, the
appellants failed to make out any such circumstance. The learned
Single Judge now closed the review petition filed by the appellants
by the impugned order dated 24.10.2025, holding that the remedy
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of the appellants is before the Debts Recovery Tribunal under
Section 17 of the SARFAESI Act. It is clear from the reading of
Section 17 of the SARFAESI Act that any person claiming a right
on the secured asset can move the Debts Recovery Tribunal if
aggrieved by the proceedings initiated against that property by
the secured creditor under the provisions of the SARFAESI Act. In
such circumstances, we find no illegality or impropriety in the
impugned judgment and order passed by the learned Single
Judge.
In the result, the writ appeal stands dismissed.
Sd/-
ANIL K.NARENDRAN, JUDGE
Sd/-
sks MURALEE KRISHNA S., JUDGE
