Citation : 2025 Latest Caselaw 9440 Ker
Judgement Date : 8 October, 2025
2025:KER:73962
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
WEDNESDAY, THE 8TH DAY OF OCTOBER 2025 / 16TH ASWINA, 1947
WP(C) NO. 29764 OF 2025
PETITIONERS:
1 HIGHNESS INVESTMENTS AND FINANCIERS
JASMINEVIL, TC 15/2038 WOMEN'S COLLEGE LANE
VAZHUTHACAUD, TRIVANDRUM, EMAIL ID :
[email protected], REPRESENTED BY
MANAGING PARTNER, C.R. SHAJI, AGED 57 YEARS,
S/O C.K. RAJAPPAN, RESIDING AT CHERUPARAMBIL
HOUSE, NADUVATHUNAGAR P.O., CHERTHALA,
ALEPPEY, PIN - 695014.
2 SREE PADMANABHA TRADING COMPANY
JASMINEVIL, TC 15/2038 WOMEN'S COLLEGE LANE
VAZHUTHACAUD, TRIVANDRUM, EMAIL ID :
[email protected] REPRESENTED BY
MANAGING PARTNER C.R. SHAJI, AGED 57 YEARS,
S/O C.K. RAJAPPAN, RESIDING AT CHERUPARAMBIL
HOUSE, NADUVATHUNAGAR P.O., CHERTHALA,
ALEPPEY, PIN - 695014.
BY ADVS.
HIGHNESS INVESTMENTS AND FINANCIERS
(PARTY-IN-PERSON)
SREE PADMANABHA TRADING COMPANY(PARTY-IN-PERSON)
2025:KER:73962
W.P.(C) No.29764/2025
:2:
RESPONDENTS:
1 MANAGING DIRECTOR
KSFE LIMITED, HEAD OFFICE PB NO. 510,
BHADRATHA MUSEUM ROAD, CHEMBUKAVU, PIN-680020.
2 SOUTH ZONE DEPUTY INSPECTOR GENERAL OF
REGISTRATION/ CHITTY ARBITRATOR
TRANSPORT BHAVAN, EAST FORT,
THIRUVANANTHAPURAM, PIN - 695023.
3 BRANCH MANAGER
KSFE, VAZHUTHACAUD BRANCH,
CENTRE PLAZA BUILDING, 2ND FLOOR,
VAZHUTHACAUD P.O, THIRUVANANTHAPURAM,
PIN - 695014.
4 BRANCH MANAGER
KSFE, THAMPANOOR EVENING BRANCH, RAMA PLAZA,
1ST FLOOR, S.S.KOVIL ROAD, THAMPANOOR P.O.,
THIRUVANANTHAPURAM, PIN - 695001.
5 BRANCH MANAGER
KSFE, PETTA BRANCH, SENTINEL BUILDING,
PATTOOR JUNCTION, VANCHIYOOR P.O.,
THIRUVANANTHAPURAM, PIN - 695035.
6 BRANCH MANAGER
KSFE, KOLLAM MAIN BRANCH, K S F E BUILDINGS,
P.B.NO.3, CHINNAKKADA, KOLLAM, PIN - 691001.
7 BRANCH MANAGER
KSFE, POOJAPPURA BRANCH, 1ST FLOOR,
LAKSMI CHAMBERS, OPP. PAREEKSHA BHAVAN,
POOJAPURA, THIRUVANANTHAPURAM, PIN - 695012.
8 BRANCH MANAGER
KSFE, SASTHAMANGALAM BRANCH, 2ND FLOOR,
SOWPARNIKA TOWER, P.O.SASATHAMANGALAM,
THIRUVANANTHAPURAM, PIN - 695010.
9 BRANCH MANAGER
KSFE, STATUE EVENING BRANCH, SILVER JUBILEE
2025:KER:73962
W.P.(C) No.29764/2025
:3:
BUILDINGS, CHIRAKKULAM ROAD, PALAYAM,
THIRUVANANTHAPURAM, PIN - 695001.
10 BRANCH MANAGER
KSFE, EANCHAKKAL BRANCH, P. O. EANCHAKKAL,
VALLAKADAVU, THIRUVANANTHAPURAM, PIN - 695008.
11 BRANCH MANAGER
KSFE, ERNAKULAM MAIN BRANCH, PADMA JUNCTION,
KOCHI, PIN - 682035.
BY ADV.SRI.SALIL NARAYANAN, STANDING COUNSEL
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 25.09.2025, THE COURT ON 08.10.2025
DELIVERED THE FOLLOWING:
2025:KER:73962
W.P.(C) No.29764/2025
:4:
N. NAGARESH, J.
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W.P.(C) No.29764 of 2025
`````````````````````````````````````````````````````````````
Dated this the 8th day of October, 2025
JUDGMENT
~~~~~~~~~
The petitioners state that the 1st petitioner
has been carrying on investment and finance business since
the year 2018 under valid money lending licence. The
petitioners joined various chitties conducted by the KSFE.
The petitioners have joined approximately 141 chitties with a
liability of about ₹39 Crores under the KSFE.
2. The petitioners state that they collected
requisite documents from 16 property owners who pledged
their property as security and submitted them to KSFE 2025:KER:73962
Branches. The KSFE, after legal and valuation scrutiny,
accepted the title documents and released the chitty prize
money. By Circular dated 17.09.2018, the KSFE arbitrarily
imposed a limit of ₹4 Crores for the total chitty prize money
that could be availed by any individual or establishment. The
Circular dated 17.09.2018 effectively blocked further release
of chitty prize money to the petitioners.
3. The petitioners state that the failure of the
KSFE to release amounts to the petitioners resulted in failure
on the part of the petitioners to pay balance instalments. The
KSFE thereafter initiated revenue recovery proceedings. The
petitioners thereupon filed an application for appointment of
Arbitrator. The Arbitrator has demanded arbitration fee of
₹5,94,060/- which the petitioners are unable to pay.
4. The petitioners contend that if the KSFE
does not file an arbitration case and proceed with revenue
recovery action, the subscribers will have no other go than to
file an arbitration case. The subscribers will be in financial 2025:KER:73962
distress and will be unable to pay arbitration fee. In such
circumstances, the KSFE is legally bound to deposit the
arbitration fee.
5. Respondents 1 and 3 to 11 filed counter
affidavit. The respondents stated that the prayer in the writ
petition cannot be granted because if a person wants to file a
case against another, it is the said person who should pay the
court fee and not the respondent / opposite party. It is the
petitioners who invoked arbitration proceedings in the matter.
Therefore, the petitioners have to pay the arbitration fee.
6. I have heard the learned counsel for the
petitioners and the learned Standing Counsel appearing for
respondents 1 and 3 to 11. I have also heard the learned
Government Pleader representing the 2nd respondent.
7. The reliefs sought for by the petitioners are
as follows:
(i) To issue a writ directing KSFE to deposit the arbitration fee, or 2025:KER:73962
(ii) Alternatively, in exercise of the constitutional powers under Article 226, to grant appropriate reliefs for release of the amount of ₹2,97,03,000/- and other consequential benefits lawfully due to the petitioners.
8. It is not in dispute that it is the petitioners
who have invoked arbitration proceedings by approaching the
2nd respondent. If the petitioners have invoked the legal
proceedings, it is the petitioners who have to pay the
arbitration fees initially. Therefore, the relief sought for by the
petitioners to direct the KSFE to deposit the arbitration fee
cannot be granted.
9. The alternate prayer of the petitioners is for
release of the amount of ₹2,97,03,000/- to the petitioners. It
is not in dispute that the petitioners have defaulted in
repayment of chit subscriptions/instalments consequent to
which the KSFE has initiated revenue recovery proceedings.
The KSFE has specifically stated that they are ready to
release the prized amount on the petitioners furnishing 2025:KER:73962
sufficient security, but the said amount will initially be
appropriated towards the dues pending from the petitioners
and the balance remaining if any will be released to the
petitioners. The said stand of the KSFE is amply justified as
there is failure on the part of the petitioners in paying chit
instalments. Therefore, this Court in exercise of the powers
under Article 226 of the Constitution of India, will not be
justified in directing the KSFE to release prized chit amounts
to the petitioners unconditionally.
The writ petition hence fails and it is
dismissed.
Sd/-
N. NAGARESH, JUDGE aks/04.10.2025 2025:KER:73962
APPENDIX OF WP(C) 29764/2025
PETITIONERS' EXHIBITS
Exhibit P1 THE TRUE PHOTOSTAT COPY OF THE MONEY LENDING LICENCE BEARING NO.32010547138 DATED 24.01.2019 Exhibit P2 THE TRUE PHOTOSTAT COPY OF THE PAN CARD IN THE NAME OF THE 1ST PETITIONER ESTABLISHMENT Exhibit P3 THE TRUE PHOTOSTAT COPY OF THE PAN CARD FOR THE 2ND PETITIONER ESTABLISHMENT. Exhibit P4 THE TRUE PHOTOSTAT COPY OF THE REGISTRATION CERTIFICATE OF THE 1ST PETITIONER BEARING NO. 2759/2018 DATED 2- 7-2018 Exhibit P5 THE TRUE PHOTOSTAT COPY OF THE PARTNERSHIP REGISTRATION CERTIFIED OF THE 2ND PETITIONER BEARING NUMBER 3546/2019 DATED 19.08.2019 Exhibit P6 THE TRUE PHOTOSTAT COPY OF THE INCOME TAX RETURN ACKNOWLEDGEMENT FOR THE ASSESSMENT YEAR 2023-24 OF THE 1ST PETITIONER HIGHNESS INVESTMENTS AND FINANCIERS FILED ON 17-12-2023 Exhibit P7 THE TRUE PHOTOSTAT COPY OF THE INCOME TAX RETURN OF THE 2ND PETITIONER DATED 18.12.2023 Exhibit P8 THE TRUE PHOTOSTAT COPY OF THE CHITTY AGREEMENT OBTAINED FROM KESAVADASAPURM BRANCH BY THE 1ST PETITIONER Exhibit P9 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR HARISANKAR FROM KERALA BANK TO PAY RS 10 LAKH Exhibit P10 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT SHOWING THE AMOUNT OF RS. 5000000/- RECEIVED FROM THE CHIT FUND OF KSFE VAZHUTHACAUD BRANCH INCLUDING RS. 2500000/- ON 20/12/2018, RS. 1500000/- ON 02/01/2019 AND RS. 1000000/- ON 15/01/2019, WHICH WAS TRANSFERRED THROUGH RTGS TO THE ACCOUNT OF SEN INTERNATIONAL, 2025:KER:73962
THE ACCOUNT OF MRS. JIJO RAJKUMAR AND SENRAJ DATED 01.07.2023 Exhibit P11 TRUE TRUE PHOTOSTAT COPY OF THE RTGS TO THE ACCOUNT OF SEN INTERNATIONAL (SENRAJ AND JIJO RAJKUMAR) FROM KERALA BANK DATED 02.01.2019 15.01.2019 Exhibit P12 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR GRACY JOSEPH FROM YES BANK TO PAY RS 2066265/-
Exhibit P13 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR ROY JOSEPH FROM KERALA BANK TO PAY RS 25 LAKH Exhibit P14 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR BABU A FROM KERALA BANK TO PAY RS 20 LAKH Exhibit P15 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR BABU A FROM YES BANK TO PAY RS 3250000/- Exhibit P16 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR BABU A FROM YES BANK TO PAY RS 250000/- Exhibit P17 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM KERALA BANK TO PAY RS 11 LAKH Exhibit P18 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM KERALA BANK TO PAY RS 1 LAKH Exhibit P19 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 4 LAKH Exhibit P20 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 1 LAKH Exhibit P21 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 2 LAKH Exhibit P22 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 2 LAKH Exhibit P23 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 250000/-
Exhibit P24 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 250000/-
Exhibit P25 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR K G JAYARAM FROM YES BANK TO PAY RS 1 LAKH Exhibit P26 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR 2025:KER:73962
KUMARIAMMA FROM KERALA BANK TO PAY RS 1677820/-
Exhibit P27 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT FOR KUMARIAMMA FROM KERALA BANK TO PAY RS 1877820/-
Exhibit P28 THE TRUE PHOTOSTAT COPY OF THE RELEVANT BANK STATEMENT SHOWING KUMARIAMMA FROM KERALA BANK TO PAY RS 5 LAKH Exhibit P29 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT FOR RADHAKRISHNA PILLAI FROM YES BANK TO PAY RS 25000/-
Exhibit P30 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT SHOWING TRANSACTION OF RADHAKRISHNA PILLAI FROM YES BANK TO PAY RS 75000/-
Exhibit P31 THE TRUE PHOTOSTAT COPY OF THE RECEIPT FOR KUMARIAMMA TO PAY RS 25000/- Exhibit P32 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR KUNJIMOIDEEN FROM KERALA BANK TO PAY RS 29 LAKH Exhibit P33 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR MOHANAN C FROM KERALA BANK TO PAY RS 4 LAKH Exhibit P34 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR MOHANAN C FROM YES BANK TO PAY RS 50000/- Exhibit P35 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR MOHANAN C FROM YES BANK TO PAY RS 50000/- Exhibit P36 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT FROM KERALA BANK TO SHOW THE TRANSACTION DATED 22.02.2019 PAYMENT OF RS 5 LAKH Exhibit P37 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR GOPALAKRISHNA KAIMAL FROM KERALA BANK TO PAY RS 350000/-
Exhibit P38 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR GOPALAKRISHNA KAIMAL FROM YES BANK TO PAY RS 750000/-
Exhibit P39 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR ANIL PAUL FROM KERALA BANK TO PAY RS 150000/-
Exhibit P40 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR 2025:KER:73962
ANIL PAUL FROM YES BANK TO PAY RS 4 LAKH Exhibit P41 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR ANIL PAUL FROM YES BANK TO PAY RS 250000/-
Exhibit P42 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR SABU T K FROM KERALA BANK TO PAY RS 10 LAKH Exhibit P43 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR AJITHKUMAR FROM KERALA BANK TO PAY RS 1 LAKH Exhibit P44 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR AJITHKUMAR FROM YES BANK TO PAY RS 5 LAKH Exhibit P45 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR AJITHKUMAR FROM AXIS BANK TO PAY RS 1 LAKH Exhibit P46 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR AJITHKUMAR FROM YES BANK TO PAY RS 1 LAKH Exhibit P47 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT FOR SANDEEP CHANDRAN FROM KERALA BANK TO SHOW TRANSACTION DATED 26/06/2020 PAYMENT RS 14 LAKH Exhibit P48 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT FOR SANDEEP CHANDRAN FROM YES BANK TO PAY RS 1 LAKH Exhibit P49 THE TRUE PHOTOSTAT COPY OF THE RELEVANT PAGE OF THE BANK STATEMENT FROM YES BANK TO PAY RS 30000/- FOR SANDEEP CHANDRAN Exhibit P50 THE TRUE PHOTOSTAT COPY OF THE BANK STATEMENT FROM YES BANK TO SHOW THE TRANSACTION DATED 24.12.2020 PAYMENT OF RS 20000/-
Exhibit P51 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR SAINUDHEEN FROM YES BANK TO PAY RS 1 LAKH Exhibit P52 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR SAINUDHEEN FROM YES BANK TO PAY RS 2 LAKH Exhibit P53 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR SAINUDHEEN FROM YES BANK TO PAY RS 4 LAKH Exhibit P54 THE TRUE PHOTOSTAT COPY OF THE RTGS FOR SAINUDHEEN FROM YES BANK TO PAY RS 1 LAKH Exhibit P55 THE TRUE PHOTOSTAT COPY OF THE CIRCULAR NO.36/2018 (BD) OF K.S.F.E.DATED 17-9- 2025:KER:73962
Exhibit P56 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.25170 OF 2019 OF THIS HON'BLE COURT DATED 4-2-2020 Exhibit P57 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.16139 OF 2020 OF THIS HON'BLE COURT DATED 7-8-2020 Exhibit P58 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.3615 OF 2021 OF THIS HON'BLE COURT DATED 18-2-2021 Exhibit P59 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.7338 OF 2021 OF THIS HON'BLE COURT DATED 22-3-2021 Exhibit P60 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.9218 OF 2021 OF THIS HON'BLE COURT DATED 8-4-2021 Exhibit P61 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.14269 OF 2021 OF THIS HON'BLE COURT DATED 9-8-2021 Exhibit P62 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.25280 OF 2022 OF THIS HON'BLE COURT DATED 29-9-2022 Exhibit P63 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.5235 OF 2023 OF THIS HON'BLE COURT DATED 18-9-2023 Exhibit P64 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.A. NO.84 OF 2024 OF THIS HON'BLE COURT DATED 18-1-2024 Exhibit P65 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN W.P.(C) NO.18926 OF 2024 OF THIS HON'BLE COURT DATED 28-5-2024 Exhibit P66 THE TRUE PHOTOSTAT COPY OF THE JUDGEMENT IN CON.CASE.1766 OF 2024 OF THIS HON'BLE COURT DATED 9-9-2024 Exhibit P67 THE TRUE PHOTOSTAT COPY OF COUNTER AFFIDAVIT CA-2024-035288 DATED 23/09/2024 FILED BY KSFE Exhibit P68 THE TRUE PHOTOSTAT COPY OF THE APPLICATION FILED ON 4-4-2025 IN THE OFFICE OF THE DEPUTY INSPECTOR GENERAL OF REGISTRATION, SOUTHERN REGION/ CHITTY 2025:KER:73962
ARBITRATOR Exhibit P69 THE TRUE PHOTOSTAT COPY OF THE APPLICATION DATED 30-4-2025 SUBMITTED TO THE HON'BLE CHITTY ARBITRATOR Exhibit P70 THE TRUE PHOTOSTAT COPY OF THE REPLY GIVEN BY THE HON'BLE DEPUTY INSPECTOR GENERAL OF REGISTRATION, SOUTHERN REGION/ CHITTY ARBITRATOR DATED 23-4-2025 Exhibit P71 THE TRUE PHOTOSTAT COPY OF THE REPLY GIVEN BY THE HON'BLE DEPUTY INSPECTOR GENERAL OF REGISTRATION, SOUTHERN REGION/ CHITTY ARBITRATOR DATED 2-7-2025 Exhibit P72 THE TRUE PHOTOSTAT COPY OF APPLICATION SUBMITTED TO KSFE MD DATED 15-7-2025 Exhibit P73 TRUE PHOTOSTAT COPY OF THE REPLY GIVEN BY KSFE MD DATED 21-7-2025 Exhibit P74 TRUE PHOTOSTAT COPY OF RR NOTICE SENT BY NEYYATTINKARA SPECIAL DEPUTY TAHSILDAR DATED 07/08/2025 Exhibit P75 TRUE PHOTOSTAT COPY OF THE POSTAL ENVELOPE SENT THROUGH THE NEYYATTINKARA SPECIAL DEPUTY TAHSILDAR (RR) POST OFFICE Exhibit P76 TRUE PHOTOSTAT COPY OF THE REPLY GIVEN TO HON. KSFE MD AND HON. SPECIAL DEPUTY TAHSILDAR DATED 13 /08 /2025 Exhibit P77 TRUE PHOTOSTAT COPY OF THE LETTER DATED 08/08/2025 GIVEN TO HON. KSFE MD AND SPECIAL DEPUTY TAHSILDAR NEYYATTINKARA (RR) Exhibit P78 TRUE PHOTOSTAT COPY OF THE LETTER DATED 18/08/2025 GIVEN TO THE HON. SPECIAL DEPUTY TAHSILDAR NEYYATTINKARA (RR) Exhibit P79 TRUE PHOTOSTAT COPY OF THE NOTICE ISSUED BY THE SPECIAL DEPUTY TAHSILDAR (RR) ERNAKULAM SDT /EKM /11972 /24 -25 DATED 27/08/2025 FOR SEIZURE OF IMMOVABLE PROPERTIES Exhibit P80 TRUE PHOTOSTAT COPY OF THE REPLY GIVEN TO THE APPLICATION GIVEN BY THE SPECIAL DEPUTY TAHSILDAR (RR), ERNAKULAM, DATED 2025:KER:73962
27/08/2025
RESPONDENT'S EXHIBIT
Exhibit R1(A) TRUE COPY OF THE UNDERSTANDING, THIS RESPONDENT IS HEREWITH PRODUCING A LIST WHICH WILL SHOW THE DEFAULT DETAILS OF THE PETITIONER AS ON 31ST OF AUGUST 2025.
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