Madras High Court
Smt.Pushpathal vs The Tamilnadu Industrial ... on 21 April, 2023
W.P.No.30706 of 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 21.04.2023
CORAM
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
W.P.No.30706 of 2008
1. Smt.Pushpathal
2. Kamalathal ...Petitioners
-Vs-
1. The Tamilnadu Industrial Investment Corporation Ltd.,
Coimbatore Branch,
By Its Branch Manager,
United Shopping Complex,
1st Floor, No.94,
Dr.Nanjappa Road, Coimbatore.
2. Smt. Soundaram ...Respondents
Prayer:- Writ petition filed under Article 226 of the Constitution of India
praying for issuance of a writ of Declaration, declaring the auction sale
conducted and confirmed by the 1st respondent in favour of the 2nd
respondent in respect of the petitioners' absolute property, namely
agricultural lands admeasuring 4.65 acres comprised in survey No.337 of
Thonguttipalayam village in Tiruppur taluk, Coimbatore district, being the
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W.P.No.30706 of 2008
guarantors' property, as illegal, non-est in law as it is contrary to the
provisions of section 29 and 31 of the State Financial Corporations Act,
1951 and also the settled decision of the Honourable Supreme Court of
India, and consequently direct the respondents to jointly execute a Re-
conveyance Deed in favour of the Petitioners herein in respect of the
aforesaid property on the Petitioners herein incurring the actual expenses
for such re-conveyance, within a time to be stipulated by this Hon'ble
Court.
For Petitioners : Ms.J.Ramakrishnan for
Mr.P.S.KothandaRaman
For Respondents :
( for R1) : Mr.K.V.Sundara Rajan
(for R2) : No Appearance
ORDER
The writ of declaration has been filed to declare the auction sale
conducted and confirmed by the first respondents in favour of the 2nd
respondent in respect of the petitioners' absolute property, namely
agricultural lands admeasuring 4.65 acres comprised in survey No.337 of
Thonguttipalayam village in Tiruppur taluk, Coimbatore district, being the
guarantors' property, as illegal, non-est in law as it is contrary to the
provisions of section 29 and 31 of the State Financial Corporations Act,
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W.P.No.30706 of 2008
1951 and also the settled decision of the Honourable Supreme Court of
India, and consequently direct the respondents to jointly execute a Re-
conveyance Deed in favour of the Petitioners herein in respect of the
aforesaid property on the Petitioners herein incurring the actual expenses
for such re-conveyance, within a time to be stipulated by this Hon'ble
Court.
2.The grievances of the writ petitioners are that they stood as
guarantors in respect of the loan availed by the son of the first petitioner.
The son of the first petitioner committed default in repayment of loan to
the first respondent which is the Tamil Nadu Industrial Investment
Corporation limited. Since the principal had not settled the loan amount,
the first respondent initiated action against the son of the first petitioner
who was the proprietor of the industry.
3.The learned counsel for the first respondent made a submission
that the machineries were also missing in the premises and they could not
realise the loan dues and consequently, criminal cases were registered
against the son of the first petitioner. In view of the fact that the principal
borrower evaded repayment of loan and the machineries were also taken
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W.P.No.30706 of 2008
away from the premises, the first respondent invoked their right against the
guarantor who has mortgaged the property in view of the loan amount as
security. Since the efforts taken by the first respondent to realise the loan
amount from the principle borrower went in vain, they took possession of
the agricultural land of the petitioners' which was given as a security and
the possession was taken on 27.09.1999. After taking possession, the first
respondent had taken efforts to conduct public auction and there was no
potential buyers and subsequently, issued a publication on 04.11.2004 and
the auction was completed on 25.11.2004 and consequently, the sale deed
was also executed on 15.01.2005 in favour of the successful auction
purchaser.
4.The possession was taken in the year 1999 and almost after 23
years the sale deed was executed in favour of the auction purchaser in the
year 2005 and now 17 years lapsed.
5.The learned counsel for the petitioner relied on the judgment of the
Hon'ble Supreme Court of India in the case of Karnataka State Financial
Corporation Vs N.Narasimahaiah and others (2008)5 SCC 176, which
was followed by the Judgment of Division Bench of this Court in Review
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W.P.No.30706 of 2008
Application No.42 of 2010 dated 06.03.2020. The Apex Court held that the
property mortgaged by the guarantor cannot be auctioned directly by the
Finance Corporation under Section 29 of the Financial Corporation Act,
1951, and therefore, the auction conducted by the first respondent is in
violation of the principles laid down by the Hon'ble Supreme Court of
India with reference to Section 29 of the Finance Corporation Act.
6.However, the legal proposition in this regard is not in dispute and
the first respondent brought to the notice of this Court that the judgment
was delivered by the Hon'ble Supreme Court of India in the year 2008 and
by the Division Bench of Madras High Court in the year 2020 and the first
respondent had taken possession of the petitioners' property in the year
1999 and the auction was conducted in the year 2004 and the sale deed was
executed in the year 2005 and therefore, now the said auction, conducted
long back, if overturned, would cause prejudice to all the subsequent
purchasers who all are not parties in the present writ petition.
7.The legal principles with reference to Section 29 as laid down by
the Hon'ble Supreme Court of India is binding. However, in the present
case the possession was taken over by the first respondent in the year 1999
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W.P.No.30706 of 2008
and the auction was conducted thereafter, and the sale deed was also
executed. Setting aside the auction at this length of time would be of no
avail to the petitioners and further, it would cause prejudice to the
subsequent purchasers of the property. The petitioners also had not
initiated action immediately and filed the present writ petition in the year
2008, which is pending before this Court for the past about 14 years.
8.Considering the facts and circumstances, this Court is of the
considered opinion that any relief if granted cannot be implemented
properly since the property was already sold in favour of the second
respondent and the present status is also not brought to the notice of this
Court.
9.Taking note of all these factors, no relief needs to be granted in
the favour of the petitioners and accordingly the writ petition stands
dismissed. No costs.
(sha) 21.04.2023
Index : Yes (2/2)
Speaking Order
Neutral Citation : Yes
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W.P.No.30706 of 2008
To
The Tamilnadu Industrial Investment Corporation Ltd.,
Coimbatore Branch,
By Its Branch Manager,
United Shopping Complex,
1st Floor, No.94,
Dr.Nanjappa Road, Coimbatore.
https://www.mhc.tn.gov.in/judis
W.P.No.30706 of 2008
S.M.SUBRAMANIAM. J.,
(sha)
W.P.No.30706 of 2008
21.04.2023
(2/2)
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