Kerala High Court
The Union Bank Of India vs Alice Ulahannan on 23 July, 2025
Author: Anil K.Narendran
Bench: Anil K.Narendran
1
WA No.1571 of 2025 2025:KER:54370
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 23RD DAY OF JULY 2025 / 1ST SRAVANA, 1947
WA NO. 1571 OF 2025
AGAINST THE JUDGMENT DATED 26.06.2025 IN OP (DRT) NO.180 OF
2025 OF HIGH COURT OF KERALA
APPELLANTS/RESPONDENTS 2 AND 3:
1 THE UNION BANK OF INDIA,
2ND FLOOR, UNION BANK BHAVAN, M.G.ROAD, ERNAKULAM,
REPRESENTED BY ITS AUTHORIZED OFFICER, PIN - 682035
2 THE AUTHORIZED OFFICER,
UNION BANK OF INDIA, 2ND FLOOR, UNION BANK BHAVAN,
M.G.ROAD, ERNAKULAM, PIN - 682035
BY ADV SHRI.ASP.KURUP
RESPONDENTS/PETITIONER/RESPONDENTS 1 AND 4 TO 6:
1 ALICE ULAHANNAN,
AGED 66 YEARS
D/O LATE ULAHANNAN, 1014 (5/789), NJATTUTHOTIYIL, 4,
KOLENCHERY, POOTHRIKKA PANCHAYAT, ERNAKULAM DISTRICT,
REPRESENTED BY HER NEXT FRIEND MRS. ALEYAMMA JOHN,
AGED 72 YEARS, W/O. LATE JOHN, RESIDING AT
NJATTUTHOTTIYIL, PERINGOLE, KOLENCHERY, ALKARANAD
P.O., ERNAKULAM DISTRICT, PIN - 682311
2 THE DEBT RECOVERY TRIBUNAL,
5TH FLOOR, KSHB BUILDING, PANAMPILLY NAGAR, ERNAKULAM,
REPRESENTED BY ITS REGISTRAR, PIN - 682036
3 BASIL N. PAUL,
2
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S/O LATE PAPPACHAN, OMBALAYIL BUILDING, BLOCK
JUNCTION, KOLANCHERRY, ERNAKULAM, PIN - 682311
4 M/S PLAZA,
REPRESENTED BY ITS PROPRIETOR BASIL N.PAUL, OMBALAYIL
BUILDING, BLOCK JUNCTION, KOLANCHERRY, ERNAKULAM, PIN
- 682311
5 M/S PRINT PLAZA,
REPRESENTED BY ITS PROPRIETOR GIBI BASIL, OMBALAYIL
BUILDING, BLOCK JUNCTION, KOLANCHERRY, ERNAKULAM, PIN
- 682311
SRI.GEORGE POONTHOTTAM, SR.COUNSEL
THIS WRIT APPEAL WAS FINALLY HEARD ON 01.07.2025, THE COURT
ON 23.07.2025 PASSED THE FOLLOWING:
3
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JUDGMENT
Muralee Krishna, J.
This intra-court appeal is filed under Section 5(i) of the
Kerala High Court Act, 1958, by respondents 2 and 3 in O.P. (DRT)
No.180 of 2025 challenging the judgment dated 26.06.2025,
whereby the original petition filed by the 1st respondent
herein/petitioner was disposed of by the learned Single Judge with
the following directions:
"3. After hearing both sides, I am inclined to grant three
weeks to produce such materials on behalf of the petitioner
so as to enable the Tribunal to consider the stay petition
afresh, in particular the contention noticed above, based on
which the Tribunal will take a fresh decision, in accordance
with law, within three weeks thereafter. Till orders are
passed as directed above, the coercive steps against the
petitioner will stand deferred."
2. The 1st respondent-petitioner filed the original petition
through her next friend, stating that the 1 st respondent has been
mentally disabled since birth. According to the 1 st respondent, her
father died intestate. By Annexure A3 partition deed bearing
No.2932 of 1988 of S.R.O. Puthencruz dated 19.08.1988, the
immovable properties belonging to the father of the 1 st respondent
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were partitioned between his three children, including the 1 st
respondent. But, the signatories to Annexure A3 partition deed are
the 1st respondent's brothers and her mother. The mother of the
1st respondent signed that document on behalf of the 1 st
respondent as her guardian. As per Annexure A3 partition deed,
the 'A' schedule property having an extent of 20.24 Ares in
different survey numbers was allotted to the share of the 1 st
respondent's brother Pappachan, wherein life interest was
reserved to the 1st respondent, permitting her to reside in the
house situated therein during her lifetime. The 'B' schedule
property in the partition deed was allotted to the 1 st respondent's
another brother John. The 'C' schedule property having an extent
of 20.24 Ares in different survey numbers, was allotted to the
share of the 1st respondent. Though the mother of the 1 st
respondent signed in Annexure A3 partition deed on behalf of the
1st respondent, she has not obtained permission from the Court of
law to effect the transfer of immovable properties of the 1 st
respondent. Later, the brother of the 1 st respondent, namely
Pappachan and mother Sara, executed Annexure A4 Power of
Attorney dated 21.02.1988 in favour of Chinamma, authorising
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the Power of Attorney holder to sell the 'A' schedule property to
one Basil N. Paul, the 3rd respondent herein. On the strength of
Annexure A4 Power of Attorney, Chinamma executed Annexure A5
sale deed No. 820/1998 of SRO, Puthencruz dated 24.02.1998 in
favour of the 3rd respondent, parting the 'A' schedule property in
Annexure A3 partition deed, including the life interest of the 1 st
respondent. Subsequently, some other conveyances were also
effected in respect of the property, and finally, the entire 'A'
schedule property in Annexure A3 partition deed was re-conveyed
in the name of the 3rd respondent. It was later understood that
the 'C' Schedule property in Annexure A3 partition deed, which
was allotted to the share of the 1 st respondent was also parted
with by her relatives without obtaining the permission of the
Court. Annexure A3 partition deed itself is a void document since
it was executed without obtaining necessary permission from the
authority concerned appointed under the National Trust for
Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation, and Multiple Disabilities Act, 1999, or from the Court
concerned under the provisions of Guardians and Wards Act, 1890.
2.1. Recently, it has come to light that the 3rd respondent
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obtained loans from the appellant Bank for the purpose of his
business by mortgaging the properties. On account of non-
payment of dues towards the appellant Bank, it has initiated
proceedings under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act
('SARFAESI Act' for short) and the Rules thereunder. Contending
that the property wherein the 1st respondent is having life interest
and also the portion of which was alienated without obtaining
permission from the Court cannot be treated as a security in terms
of the SARFAESI Act for realisation of the amounts due to the
appellant Bank from respondents 3 to 5, the 1st respondent
preferred Ext.P1 securitisation application S.A. No.402 of 2025
before the Debts Recovery Tribunal-I, Ernakulam. In that
application, the 1st respondent filed I.A. No.2380 of 2025 seeking
an order restraining the appellant Bank from taking any further
recovery measures. However, on 24.06.2025 when the matter
came up for admission, the Tribunal declined to grant the interim
relief sought for and issued notice to the appellants by Ext.P2
order. Meanwhile, the bank proceeded with the recovery measures
and issued Ext.P4 fresh sale notice fixing the date of auction as
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15.07.2025. Thereafter, the 1st respondent through her next friend
approached this Court by filing the original petition under Article
227 of the Constitution of India seeking the following reliefs:
"i) Calling for the records leading to Exhibit P2 Order passed
by the Hon'ble Debt Recovery Tribunal and set aside the
same;
ii) Declaring that all recovery measures adopted by
respondents 2 and 3 under the SARFAESI Act and Rules are
bad in law for want of creation of a valid security interest
over the property;
iii) declaring that the mortgage created over the property
by respondents 4 to 6 in favour of the 2nd respondent bank
is invalid and the recovery proceedings in its entirety is bad
in law;
iv) declaring Annexure A7 Order in Exhibit P1 permitting
dispossession of the petitioner from the property and
Exhibit P4 sale notice is improper, irregular and illegal and
therefore liable to be set aside;
v) declaring that the recovery measures adopted by the 2 nd
respondent Bank as against the petitioner - an aggrieved
person, who is mentally disabled, is in violation of her
fundamental rights under Article 21 and the constitutional
protection guaranteed to the said mentally disabled
person."
3. Heard the learned Counsel for the appellants and the
learned Senior Counsel for the 1 st respondent.
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4. The learned counsel for the appellants would submit
that the Apex Court in several judgments deprecated the practice
of approaching the constitutional Court seeking relief under Article
226 of the Constitution of India, wherein an efficacious alternative
remedy is available to the party concerned. The learned Counsel
submitted that though the original petition was filed under Article
227 of the Constitution of India, the direction issued by the learned
Single Judge in the impugned judgment is by exercising the
jurisdiction under Article 226 of the Constitution of India. The
learned counsel relied on the judgment of the Apex Court in
Sreedhar v. Raus Constructions Pvt. Ltd. [2023 KLT Online
1007 (SC)] and argued that to maintain an appeal against the
order of the Debts Recovery Tribunal before the Debts Recovery
Appellate Tribunal, the 1st respondent has to deposit 50% of the
debt due, out of which only 25% can be waived by the Debts
Recovery Appellate Tribunal and hence, 1st respondent has to
mandatorily deposit 25% of the debt before the Appellate
Tribunal, apart from the prescribed fees. It is to avoid deposit of
such an amount, the 1st respondent approached this Court with
the above original petition. The learned counsel further relied on
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the judgment of this Court in State Bank of India and another
v. M/s. Kinship Services (India) (P) Ltd., Cochin and
another [2013 (4) KHC 21] and the judgment dated
12.12.2024 passed by a Division Bench of this Court in W.A.
No.2032 of 2024 in support of his argument regarding the nature
of the relief granted by the learned Single Judge.
5. On the other hand, the learned Senior Counsel appearing
for the 1st respondent would argue that while passing the
impugned judgment, the learned Single Judge has exercised only
a discretion vested with the constitutional Court. The 1 st
respondent is a mentally retarded person. Whatever transactions
effected on her property without obtaining permission from the
jurisdictional authority or the Court concerned is not binding on
her property. Considering the plight of the 1st respondent, this
Court, by exercising its appellate jurisdiction, may not interfere
with the limited relief granted by the learned Single Judge. By
relying on the judgment of a Division Bench of this Court dated
30.05.2025 in OP(KAT) No.186 of 2025, the learned Senior
Counsel argued that if the Court is able to form an opinion that
the Bank is wielding its power and authority to opress and harass
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the aggrieved, the Court shall not refrain from using its power
under Article 226 of the Constitution even though the challenge is
made under Article 227 of the Constitution.
6. As far as the jurisdiction of this Court in interfering with
the matters under the SARFAESI Act is concerned, there are
umpteen judgments by the Apex Court as well as this Court. The
crux of all those judgments is that unless the exceptional
circumstances enumerated therein are made out, the High Court
under Article 226 of the Constitution of India cannot interfere with
the steps taken by the secured creditor to recover the debt by
proceeding against the secured asset.
7. 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
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invoke the provisions which are repealed, or when an order has
been passed in total violation of the principles of natural justice,
were re iterated 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].
8. 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 Art.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
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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 Art.226 of the Constitution, a
person must exhaust the remedies available under the
relevant statute".
9. In PHR Invent Educational Society v. UCO Bank
[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.
10. 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.
11. From the judgments quoted above, it is clear that
unless the four exceptional circumstances mentioned by the Apex
Court in Mathew K.C. [2018 (1) KHC 786], the 1st respondent
cannot invoke the writ jurisdiction of this Court under Article 226
of the Constitution of India. In the instant case, though the 1 st
respondent filed the Original Petition under Article 227 of the
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Constitution of India as if the relief sought is by exercising
supervisory jurisdiction, the reliefs Nos. (ii) to (v) would show that
they are of the nature that can be granted by exercising
jurisdiction under Article 226 of the Constitution of India. Those
reliefs sought by the 1st respondent are matters to be decided by
the Debts Recovery Tribunal in the securitisation application filed
by the 1st respondent challenging the recovery proceedings
initiated by the Bank.
12. In M/s. Kinship Services (India) (P) Ltd. [2013 (4)
KHC 21] a Division Bench of this Court considered the appeal
filed against an interim order passed by a learned Single Judge
staying confirmation of sale till further orders in respect of one
item of property which is sought to be sold in an auction scheduled
under SARFAESI proceedings. By relying on an unreported
judgment of the Apex Court in Civil Appeal No.6 of 2009 in the
case of State of M.P. v. Sanjay Kerlaker dated 05.01.2009, the
Division Bench held that the nature of the interim relief granted
by the learned Single Judge is nothing but a discretion exercised
under Article 226 of the Constitution of India.
13. While going through the direction issued by the learned
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Single Judge in the instant case, in the light of the judgment in
M/s. Kinship Services (India) (P) Ltd. [2013 (4) KHC 21],
we are of the considered opinion that the order of the learned
Single Judge not to take coercive steps against the 1 st respondent
till a decision is taken by the Debts Recovery Tribunal is the one
that can be passed only under Article 226 of the Constitution of
India and not under Article 227 of the Constitution of India.
14. As noticed hereinbefore, the 1 st respondent had already
initiated proceedings against the steps taken by the Bank to
recover the debt from the secured asset by filing a securitisation
application before the Debts Recovery Tribunal. If no interim relief
has been granted by the Tribunal, the remedy available to the 1st
respondent is to challenge the same before the Debts Recovery
Appellate Tribunal under Section 18 of the SARFAESI Act. The said
section reads thus:
"18. Appeal to Appellate Tribunal (1) Any person aggrieved,
by any order made by the Debts Recovery Tribunal under section
17, may prefer an appeal along with such fee, as may be
prescribed to the Appellate Tribunal within thirty days from the
date of receipt of the order of Debts Recovery Tribunal:
Provided that different fees may be prescribed for filing an appeal
by the borrower or by the person other than the borrower:
Provided further that no appeal shall be entertained unless the
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borrower has deposited with the Appellate Tribunal fifty per cent
of the amount of debt due from him, as claimed by the secured
creditors or determined by the Debts Recovery Tribunal,
whichever is less:
Provided also that the Appellate Tribunal may, for the reasons to
be recorded in writing, reduce the amount to not less than
twenty-five per cent of debt referred to in the second proviso.
(2) Save as otherwise provided in this Act, the Appellate Tribunal
shall, as far as may be, dispose of the appeal in accordance with
the provisions of the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of 1993) and rules made
thereunder."
15. In Sreedhar [2023 KLT Online 1007 (SC)] the Apex
Court, while considering the requirement of deposit of 25% of the
debt due before the Debts Recovery Appellate Tribunal to avail the
statutory remedy of appeal, held thus:
"6. At the outset, it is required to be noted that what was
challenged before the High Court by the borrower in a writ
petition under Article 226 of the Constitution of India was
the judgment and order passed by the DRT-I. Against the
judgment and order passed by the DRT-I dismissing the
application, the borrower had a statutory remedy available
by way of appeal before the DRAT. If the borrower would
have preferred an appeal before the DRAT, he would have
been required to deposit 25% of the debt due. To circumvent
the provision of appeal before the DRAT and the pre-deposit,
the borrower straightway preferred the writ petition before
the High Court under Article 226/227 of the Constitution.
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Therefore, in view of alternative statutory remedy available
by way of appeal before the DRAT, the High Court ought not
to have entertained the writ petition under Article 226/227
of the Constitution of India challenging the judgment and
order passed by the DRT- I. By entertaining the writ petition
straightway under Article 226/227 of the Constitution of
India challenging the order passed by the DRT-I, the High
Court has allowed/permitted the borrower to circumvent the
provision of appeal before the DRAT under the provisions of
the SARFAESI Act."
16. In Narayan Chandra Ghosh v. Uco Bank [(2011) 4
SCC 548] while considering the question as to whether Debts
Recovery Appellate Tribunal has the jurisdiction to exempt a
person preferring an appeal under Section 18 of the SARFAESI Act
from making any predeposit in terms of the said provision, the
Apex Court held thus:
"8. S.18(1) of the Act confers a statutory right on a person
aggrieved by any order made by the Debts Recovery
Tribunal under S.17 of the Act to prefer an appeal to the
Appellate Tribunal. However, the right conferred under
S.18(1) is subject to the condition laid down in the second
proviso thereto. The second proviso postulates that no
appeal shall be entertained unless the borrower has
deposited with the Appellate Tribunal fifty per cent of the
amount of debt due from him, as claimed by the secured
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creditors or determined by the Debts Recovery Tribunal,
whichever is less. However, under the third proviso to the
sub-section, the Appellate Tribunal has the power to reduce
the amount, for the reasons to be recorded in writing, to
not less than twenty - five per cent of the debt, referred to
in the second proviso. Thus, there is an absolute bar to
entertainment of an appeal under S.18 of the Act unless the
condition precedent, as stipulated, is fulfilled. Unless the
borrower makes, with the Appellate Tribunal, a pre-deposit
of fifty per cent of the debt due from him or determined, an
appeal under the said provision cannot be entertained by
the Appellate Tribunal. The language of the said proviso is
clear and admits of no ambiguity. It is well - settled that
when a Statute confers a right of appeal, while granting the
right, the Legislature can impose conditions for the exercise
of such right, so long as the conditions are not so onerous
as to amount to unreasonable restrictions, rendering the
right almost illusory. Bearing in mind the object of the Act,
the conditions hedged in the said proviso cannot be said to
be onerous. Thus, we hold that the requirement of pre -
deposit under sub-section (1) of S.18 of the Act is
mandatory and there is no reason whatsoever for not giving
full effect to the provisions contained in S.18 of the Act. In
that view of the matter, no court, much less the Appellate
Tribunal, a creature of the Act itself, can refuse to give full
effect to the provisions of the Statute. We have no
hesitation in holding that deposit under the second proviso
to S.18(1) of the Act being a condition precedent for
preferring an appeal under the said Section, the Appellate
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Tribunal had erred in law in entertaining the appeal without
directing the appellant to comply with the said mandatory
requirement.
9. The argument of learned counsel for the appellant that
as the amount of debt due had not been determined by the
Debts Recovery Tribunal, appeal could be entertained by the
Appellate Tribunal without insisting on pre-deposit, is
equally fallacious. Under the second proviso to sub-section
(1) of S.18 of the Act the amount of fifty per cent, which is
required to be deposited by the borrower, is computed
either with reference to the debt due from him as claimed
by the secured creditors or as determined by the Debts
Recovery Tribunal, whichever is less. Obviously, where the
amount of debt is yet to be determined by the Debts
Recovery Tribunal, the borrower, while preferring appeal,
would be liable to deposit fifty per cent of the debt due from
him as claimed by the secured creditors. Therefore, the
condition of pre-deposit being mandatory, a complete
waiver of deposit by the appellant with the Appellate
Tribunal, was beyond the provisions of the Act, as is evident
from the second and third proviso to the said Section. At
best, the Appellate Tribunal could have, after recording the
reasons, reduced the amount of deposit of fifty per cent to
an amount not less than twenty-five per cent of the debt
referred to in the second proviso. We are convinced that the
order of the Appellate Tribunal, entertaining appellant's
appeal without insisting on pre-deposit was clearly
unsustainable and, therefore, the decision of the High Court
in setting aside the same cannot be flawed".
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17. A Division Bench of this Court wherein one among us
is a party [Anil K.Narendran, J.] in Union Bank of India,
Kottayam, v. M/s Suwique Traders [2025 KHC Online
709=2025:KER:46809] while considering the above issue, by
considering the relevant provisions under the SARFAESI Act and
also relying on the decision in Narayan Chandra Ghosh
[(2011) 4 SCC 548] held thus:
"20. When complete waiver of pre-deposit is beyond the
provisions of Section 18(1) of the SARFAESI Act, it cannot
be contended that, a person aggrieved by any order made
by the Debts Recovery Tribunal under Section 17, can prefer
an appeal before the Appellate Tribunal, within the time limit
specified in Section 18(1), along with an application for
complete waiver of pre-deposit under the second proviso to
Section 18(1), after remitting only the fee provided under
Section 18(1), since the Appellate Tribunal cannot grant
complete waiver of pre-deposit, which is beyond the scope
of the provisions contained in the second and third provisos
to Section 18(1). In that view of the matter, in an appeal
filed under Section 18 of the Act, which is accompanied by
an application invoking the provisions of the third proviso to
Section 18(1) for waiver of pre-deposit, as stipulated in the
second proviso to Section 18(1), the appellant has to
deposit with the Appellate Tribunal twenty-five per cent of
the debt referred to in the second proviso to Section 18(1).
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The Appellate Tribunal cannot entertain, i.e., give judicial
consideration of an appeal filed under Section 18 and the
interlocutory application filed under the third proviso to
Section 18(1) for waiver of predeposit, as stipulated in the
second proviso to Section 18(1), unless the appellant has
deposited with the Appellate Tribunal twenty-five per cent
of the debt referred to in the second proviso to Section
18(1). Therefore, we find absolutely no merit in the
submission of the learned counsel for the respondents-
petitioners that the respondents are required to remit only
the prescribed fee as provided under Section 18(1) of the
Act, at the time of preferring Ext.P2 appeal and the question
of deposit with the Appellate Tribunal the pre-deposit
provided under the second proviso to Section 18(1) arises
only on an order being passed by the Appellate Tribunal on
the application for waiver".
18. In the light of the above judgment it is only to be held
that as rightly pointed out by the learned counsel for the
appellants, to approach the Appellate Tribunal, the 1 st respondent
has to deposit a minimum of 25% of the debt and can seek
exemption only for the remaining 25% as provided under Section
18 of the SARFAESI Act. In such circumstances, we find force in
the submission of the learned counsel for the appellants that it is
to circumvent the said mandate, the 1 st respondent filed the
original petition as if one filed under Article 227 of the Constitution
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of India.
19. Having considered the pleadings and materials on
record and the submissions made at the Bar, we find that the
learned Single Judge failed to consider the above aspects in its
proper perspective. Therefore, the impugned judgment is liable to
be set aside.
In the result, the writ appeal is allowed by setting aside the
impugned judgment dated 26.06.2025 in OP(DRT)No.180 of 2025
passed by the learned Single Judge and the original petition stands
dismissed.
sd/-
ANIL K. NARENDRAN, JUDGE
sd/-
sks MURALEE KRISHNA S., JUDGE
