IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.HRISHIKESH ROY&
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
TUESDAY, THE 19TH DAY OF FEBRUARY 2019/30TH MAGHA, 1940
W.P.(C).No.30651 OF 2017
PETITIONER:
RATHEESH M.NAGED 39 YEARS, S/O.NARAYANAN,MALIYIL,CHIRAYAM,ALANGAD, ALUVA, ERNAKULAM DISTRICT.
BY ADVS.SRI.S.DILEEP (KALLAR) SRI.PEEYUS A.KOTTAM
RESPONDENTS:
1 THE DEBT RECOVERY TRIBUNAL (KERALA & LAKSHADWEEP)ERNAKULAM,REPRESENTED BY ITS REGISTRAR,ERNAKULAM-682011.
2 THE RECOVERY OFFICERTHE DEBT RECOVERY TRIBUNAL,(KERALA & LAKSHADWEEP)ERNAKULAM-682011.
3 THE COMMISSIONER OF CITY POLICEOFFICE OF THE CITY POLICE COMMISSIONER, KOCHI-682001.
4 THE STATION HOUSE OFFICERKALAMASSERY POLICE STATION, KALAMASSERY,ERNAKULAM DISTRICT-683104.
5 HDFC BANK LTD.ALUVA BRANCH, REPRESENTED BY ITS MANAGER,PIN-683101.
6 A.R.SAJANSOLE PROPRIETOR,RAMAKRISHNA BODY BUILDERS, PATHADIPPALAM, SOUTH KALAMASSERY,CHANGAMPUZHA.P.O, KOCHI-682033.
7 M.V.SHAJIS/O.LATE VELAYUDAN,MANATHUPADATHU HOUSE, PATHADIPPALAM,SOUTH KALAMASSERY,KOCHI-682033.
8 P.U.ARIDHCHAIRPERSON,MANATHUPADAM,PARPIDA SAMRAKSHANA SAMITHI, PATHADIPPALAM, SOUTH KALAMASSERY,KOCHI-682033. [DELETED]
W.P.(C).No.30651/2017& : 2 :O.P.(DRT).No.136/2018
9 V.C.JENNYGENERAL CONVENOR SARFAESI,VIRUDHA JANAKEEYA PRASTHANAM, PATHADIPPALAM,SOUTH KALAMASSERY,KOCHI-682033. [DELETED] [R8 AND R9 ARE DELETED FROM PARTY ARRAY AS PER ORDER DATED 26/10/2017 IN IA.NO.17169/2017].
10 T.J.MANUALCONVENOR,BLADE BANK JAPTHI VIRUDHA SAMITHY, PATHADIPPALAM, SOUTH KALAMASSERY,KOCHI-682033.
ADDL.RESPONDENTS 11 TO 13:
11 THE SECRETARYHOME DEPARTMENT, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM.
12 THE STATE POLICE CHIEFTHIRUVANANTHAPURAM.
13 THE DISTRICT COLLECTORERNAKULAM.
[R11 TO R13 ARE SUO MOTU IMPLEADED AS PER ORDER DATED 11.7.2018.]
BY ADVS.SRI.K.ARJUN VENUGOPAL SRI.P.MARTIN JOSE SRI.S.R.DAYANANDA PRABHU, SC, HDFC BANK SMT.MARY RESHMA GEORGE SMT.P.M.MAZNA MANSOOR SMT.SANDHYA R.NAIR SRI.TEK CHAND, GOVERNMENT PLEADER SRI.JEEVAN RAJEEV SRI.M.A.MOHAMMED SIRAJ SRI.P.CHANDRASEKHAR SRI.P.PRIJITH SRI.SACHIN JACOB AMBAT SRI.THOMAS P.KURUVILLA
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARDON 19.02.2019 ALONG WITH O.P.(DRT).NO.136/2018, THE COURT ONTHE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C).No.30651/2017& : 3 :O.P.(DRT).No.136/2018
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.HRISHIKESH ROY&
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
TUESDAY, THE 19TH DAY OF FEBRUARY 2019/30TH MAGHA, 1940
O.P.(DRT).No.136 OF 2018
AGAINST THE ORDER IN O.A.NO.6/2005 of DEBT RECOVERY TRIBUNAL,ERNAKULAM DATED 22-05-2015
PETITIONER/RESPONDENT:
M.V. SHAJIAGED 58 YEARSS/O VELAYUDHAN, MANNATHUPADATH, PATHADIPALAM, SOUTH KALAMASSERY, ERNAKULAM DISTRICT - 682 033
BY ADV. SRI.TITUS MANI
RESPONDENTS/APPLICANTS:
1 HDFC BANK LTDALUVA BRANCH, REPRESENTED BY ITS MANAGER, ALUVA 683 101
2 RATHESH M.N.,AGED 35 YEARSS/O.NARAYANAN, RESIDING AT 209, MALIYIL, 7 CHIRAYAM, ALANGAD, ALUVA, ERNAKULAM DISTRICT, PIN-683511.
BY ADVS.SRI.S.R.DAYANANDA PRABHU, SC, HDFC BANK SRI.PEEYUS A.KOTTAM SRI.S.DILEEP (KALLAR) SRI.T.RAJESH
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING BEEN FINALLYHEARD ON 19.02.2019 ALONG WITH W.P.(C).NO.30651/2017, THECOURT ON THE SAME DAY PASSED THE FOLLOWING:
W.P.(C).No.30651/2017& : 4 :O.P.(DRT).No.136/2018
' C.R.'
J U D G M E N T
A.K.Jayasankaran Nambiar, .J.
As the aforementioned Writ Petition and O.P.(DRT) involve a common issue,
they are taken up together for consideration and disposed by this common
judgment. For the sake of convenience, the reference to facts and exhibits is from
W.P.(C).No.30651/2017, which is filed by Sri.Ratheesh M.N, who is stated to be the
auction purchaser of property comprising of 18.200 cents in Sy.No.648/7/3 of
Thrikkakkara North Village, pursuant to a public-e-auction conducted in accordance
with the Recovery certificate dated 9.9.2005 issued consequent to the final order
of the Debts Recovery Tribunal in O.A.No.6/2005.
2. The brief facts necessary for a disposal of these cases is that, one
A.R.Sajan [borrower] and Sri.M.V.Shaji [guarantor], who are arrayed as
respondents 6 and 7 in W.P.(C).No.30651/2017, had availed a loan from the Lord
Krishna Bank [subsequently taken over by the HDFC Bank, the 5th respondent] by
depositing the title deeds in respect of the property aforementioned. Consequent
to a default committed by the said persons, in repaying the amounts due to the
bank, the bank filed O.S.No.39/1999 against the said defaulters, for recovering the
loan amounts. The original of the title deeds, pertaining to the property that was
W.P.(C).No.30651/2017& : 5 :O.P.(DRT).No.136/2018
mortgaged with the bank, was produced before the IInd Additional Sub Court,
Ernakulam, in connection with the aforesaid suit. It would appear that, in the suit,
a consent decree was passed on 3.3.2000, where under, the 6th and 7th
respondents were directed to pay an amount of Rs.6,04,273/- together with future
interest @ 20.75% per annum with quarterly rests from the date of the suit till
realisation thereof. An amount of Rs.27,736.50 was also directed to be paid to the
plaintiff by way of costs.
3. For executing the decree, O.A.No.6/2005 was filed by the bank before the
Debts Recovery Tribunal under Section 19 read with Section 31A of the Recovery
of Debts Due to Banks and Financial Institutions Act, 1993 [hereinafter referred to
as “the RDDBFI Act”], for the issuance of a Recovery Certificate in terms of the
decree. It would appear that by 23.11.2004, the date of filing the said O.A., the
decree amount had already swelled to Rs.18,03,552/-. The Debts Recovery
Tribunal passed the final order in O.A.No.6/2005 on 10.6.2005, directing the
issuance of a Recovery Certificate in terms of the decree in O.S.No.39/1999 of the
Sub Court, Ernakulam for recovery of the sum of Rs.18,03,552/- with interest on
the sum of Rs.17,75,815.50 @ 20.75% per annum with quarterly rests from
23.11.2004 till realisation from the defendants personally and by the sale of decree
'A' schedule property. The applicant bank was also allowed to recover its costs
from the defendants and by sale of decree 'A' schedule property. The Recovery
Certificate subsequently issued on 9.9.2005 quantifies the total amount due from
W.P.(C).No.30651/2017& : 6 :O.P.(DRT).No.136/2018
the 6th and 7th respondents as Rs.20,14,044.52.
4. It is for recovery of the said amount, and the interest accrued thereon,
that a sale proclamation was issued by the Recovery Officer of the DRT on
28.10.2013. Immediately thereafter, the 6th and 7th respondents filed O.P.
(DRT).No.4444/2013 challenging the sale proclamation. By a judgment dated
16.12.2013, this Court dismissed the said O.P.(DRT), and relegated the parties to
the alternate remedy of filing an appeal before the Debts Recovery Appellate
Tribunal [DRAT]. For reasons best known to the said respondents, they chose not
to prefer the Appeal.
5. The property was thereafter sold on 24.2.2014 to Sri.Ratheesh M.N., the
petitioner in W.P.(C).No.30651/2017. When faced with the situation where steps
were being taken for delivery of possession to the auction purchaser, the defaulting
respondents approached this Court through W.P.(C).No.15366/2015, which was
dismissed by a learned Single Judge referring to the earlier judgment of this Court
in O.P.(DRT).No.4444/2013, and observing that their remedy lay in pursuing a
statutory appeal before the DRAT. With a view to protecting their interests, in the
interregnum, the learned Judge directed that further steps for delivery of
possession of the property to the auction purchaser be kept in abeyance for a
period of two weeks. The 6th and 7th respondents thereafter preferred an intra
court appeal before a Division Bench, impugning the judgment of the learned
W.P.(C).No.30651/2017& : 7 :O.P.(DRT).No.136/2018
Single Judge. The said appeal was however dismissed by the judgment dated
5.3.2015 in W.A.No.523/2015. The Appellate court also, while relegating the
defaulting respondents to their remedy before the DRAT, directed that the delivery
of the property to the auction purchaser be kept in abeyance for a further period
of two weeks, so as to enable them to pursue the appeal before the DRAT. The
Appeal before the DRAT was, however, never filed by the defaulting respondents.
6. On the expiry of the period of stay granted by this Court, the Recovery
Officer of the DRT, Ernakulam, directed the 6th and 7th respondents to handover
vacant possession of the property in question to the auction purchaser through an
Advocate Commissioner appointed by it. When the Advocate Commissioner faced
resistance from persons in the locality, while attempting to execute the order, a
request was made by the Recovery Officer of the DRT to the Commissioner of
Police, Kochi, for police assistance. It was when there was no assistance received
from the police authorities that the auction purchaser moved this Court through
W.P.(C).No.30651/2017, for an order of police protection. In the said writ petition,
this Court, by its interim order dated 26.10.2017, directed that in the event of any
request being made by the Advocate Commissioner appointed by the DRT, for
police protection, the same should be provided by the 3rd and 4th respondents,
namely, the City Police Commissioner, Kochi, and the Station House Officer,
Kalamassery Police Station respectively, so as to enable the Advocate
Commissioner to execute the commission warrant issued by the DRT.
W.P.(C).No.30651/2017& : 8 :O.P.(DRT).No.136/2018
7. It is distressing to note that, notwithstanding the specific direction given
for police protection, for the purposes of executing the warrant of the DRT, the
warrant could not be executed on account of stubborn obstruction by persons in
the locality, who went to the extent of agitating against the steps taken for
implementation of the orders passed by this Court. In this connection, Cont. Case
(C).No.681/2018 has been filed by the auction purchaser, who is the petitioner in
W.P.(C).No.30651/2017, and the same is pending before this Court.
8. In the said contempt proceedings, taking note of the stand taken by the
State Government whereby they attempted to justify their inaction in effectively
dealing with the agitating persons in the locality, this Court, in its order dated
11.7.2018, observed as follows at paragraphs 6, 7 and 8:
“6. We have chosen to narrate the factual circumstances of thiscase in some detail in this order solely to highlight that, while this Courtwould have been sympathetic to the pleas of persons who have beendeprived of their property through fraudulent or deceitful means, thepresent is a case where the principal borrower and the guarantors, whowere active parties to a litigation, have only themselves to blame for thesituation that they find themselves in today. Orders passed by a court inadjudication proceedings are binding on the parties to the saidproceedings, and they cannot obstruct the implementation of lawfulorders by resorting to illegal acts. On its part, the State Government,through its police machinery, is expected to aid the Judiciary in theeffective implementation of its orders. If, in the said process, they meetwith resistance, then suitable steps have to be taken to remove suchresistance, if need be by resorting to force. In a Republic, where the ruleof law must prevail, the State Government cannot, and ought not, save
W.P.(C).No.30651/2017& : 9 :O.P.(DRT).No.136/2018
through a judicial process, question the orders passed by a court ofcompetent jurisdiction. The State Government cannot, when calledupon to assist in the implementation of orders of this Court, refrainfrom doing so on account of any notions of empathy or misplacedsympathy harboured by it.
7. The learned State Attorney would submit that the orders ofthis court, if implemented, would cause great suffering to the principaldebtor and guarantors referred above. In our view, if the StateGovernment feels that the said persons ought to be relieved of theirunfortunate predicament, it is open to them to take appropriatemeasures to rehabilitate the said persons or ameliorate their hardship.Such measures cannot, however, deprive the auction purchaser of hisrights over the property in question, more so when those rights haveaccrued to him pursuant to long drawn legal proceedings. At any rate,since we are told that the State Government requires some time toexplore the possibility of an amicable resolution of the situation, wegrant the respondents herein three weeks time to file an affidavitstating the measures that they propose to take in respect of the saidpersons, while simultaneously ensuring the implementation of theorders of this Court, and the warrant of the DRT.
8. We might also add that, taking note of the gravity of thesituation, we deem it necessary to suo moto implead the followingpersons as additional respondents in W.P (C) No. 30651 of 2017, sothat the further discussions of the State Government, in this matter, areheld at the highest level.
(i) The Secretary, Home Department, Government of Kerala,Secretariat, Thiruvananthapuram;
(ii) The State Police Chief, Thiruvananthapuram
(iii)The District Collector, Ernakulam
The Registry shall communicate a copy of this order to theaforesaid three functionaries, as also the Chief Secretary of the State.”
9. It was while the proceedings were at this stage that O.P.
(DRT).No.136/2018 was filed by Sri.M.V.Shaji, the 7th respondent in W.P.
W.P.(C).No.30651/2017& : 10 :O.P.(DRT).No.136/2018
(C).No.30651/2017. In the said O.P.(DRT), the order dated 22.5.2015 of the
Recovery Officer, DRT [Ext.P5], by which, an Advocate Commissioner was
appointed for the purposes of executing the final order dated 10.6.2005 of the
DRT as per which the Recovery Certificate was issued in terms of the decree in
O.S.No.39/1999 of Sub Court, Ernakulam is impugned. The main contention urged
in the O.P.(DRT) is with regard to the legality of the auction sale that was
conducted on 24.2.2014. It is urged that the auction sale was held after a lapse of
more than 8 years from the final order dated 10.6.2005 of the DRT in
O.A.No.6/2005. It is stated, therefore, that the said sale was vitiated inasmuch as
it was in violation of Section 29 of the RDDBFI Act, 1993, read with Rule 68B of
the Second Schedule to the Income Tax Act.
10. The O.P.(DRT) was posted for admission before a learned Single Judge
on a day when the Contempt Case was also posted before us. When the fact of
having filed the O.P.(DRT) before a learned Single Judge was brought to our notice
by the learned counsel appearing for the guarantor/mortgagor Sri.M.V.Shaji, who is
the petitioner in the O.P.(DRT), as also a contemnor before us in the Contempt
Case, we deemed it appropriate to call for the files of the O.P.(DRT) before this
Court, so as to consider it together with the Contempt Case. Thereafter, in the
post lunch session on 21.11.2018, when the O.P.(DRT) was brought before us, we
took note of the contentions in the O.P.(DRT), but felt that the petitioner therein
needed to establish his bona fides in the matter of pursuing his remedy through
W.P.(C).No.30651/2017& : 11 :O.P.(DRT).No.136/2018
the belated challenge against the order of the Recovery Officer of the DRT,
Ernakulam in the said proceedings under Article 227 of the Constitution of India.
We took note of the fact that the petitioner in the O.P.(DRT) was one, who was
arrayed as the respondent in the Contempt Case and had been prima facie found
guilty of contumacious conduct in resisting the authorities who were attempting to
implement the directions issued from this Court. We also felt that if, as a matter of
fact, there was a grave illegality occasioned against the petitioner in the O.P.(DRT),
on account of the auction sale of his property, then, we would be failing in our duty
if we did not consider the contentions of the petitioner, on merits. We therefore
informed the learned counsel for the petitioner in the O.P.(DRT) that we would
exercise our discretion in the matter of entertaining the O.P.(DRT) on merits, only
after the petitioner purged himself of the contempt that was prima facie found in
Cont. Case (C).No.681/2018. After a brief interaction with his client, the learned
counsel for the petitioner submitted that his client was agreeable to handover
vacant possession of the secured asset, that was purchased by the auction
purchaser, to the Village Officer concerned [Village Officer, Thrikkakkara] within 48
hours. Pursuant to the said undertaking, the petitioner in the O.P.
(DRT).No.136/2018 handed over vacant possession of the property to the Village
Officer, and the report of the Village Officer indicates that vacant possession of the
secured asset, including the locking and sealing of the building forming part of the
secured asset, has been duly secured by the Village Officer.
W.P.(C).No.30651/2017& : 12 :O.P.(DRT).No.136/2018
11. Before dealing with the contentions urged by counsel on either side, we
might observe that in these cases, we are called upon to balance two conflicting
claims viz. that of a mortgagor to redeem his mortgaged property and that of an
auction purchaser who obtained the title to the property based on a sale conducted
by the bank in execution of a decree obtained against the mortgagor. It is settled
law that under the RDDBFI Act, 1993, the mortgagor loses his right of redemption
in respect of the mortgaged property on the sale being confirmed in favour of an
auction purchaser. While the law zealously guards against the deprivation of the
right of redemption available to a mortgagor, the sale to an auction purchaser is
the point at which the rubicon is crossed and the mortgagor loses his right to
redeem the mortgaged property. Under normal circumstances, therefore, acting on
the plethora of precedents from the Supreme Court on this issue, this court would
not interfere with the rights that have accrued to an auction purchaser pursuant to
a sale validly held. That being said, one cannot forget that when a mortgagor is
deprived of his right to redeem the mortgaged property, he effectively loses all his
rights over the property in question, including the valuable right that he has in
terms of Article 300-A of our Constitution which, in unambiguous terms, states that
no person shall be deprived of his property save by authority of law. It follows,
therefore, that if we were to find that the sale of the mortgagors property was held
in a manner not authorised by the statutory provisions, or in gross disregard to
those statutory provisions as are designed to prevent an unjust deprivation of the
mortgagors right to redeem his property, then we would be constrained to
W.P.(C).No.30651/2017& : 13 :O.P.(DRT).No.136/2018
recognise the larger Constitutional right of the mortgagor and hold the deprivation
of property from the mortgagor, as without the authority of law. In that event, we
would also have to ignore technical arguments with regard to the delay in
mounting a challenge to the sale proceedings, or of the mortgagor not having
taken timely action against adverse orders passed against him in the past, so as to
recognise and effectuate the Constitutional right guaranteed to the mortgagor. We
would do so because, as observed by Justice Krishna Iyer in Shivshankar Dal Mills
v. State of Haryana - 1980 (2) SCC 437, “the dharma of the situation admits of no
equivocation” and recognising that “in our jurisprudence it is not palatable to turn
down the prayer for high prerogative writs on the negative plea of alternate
remedy”.
12. While not condoning the acts of indiscretion and obstruction of the
course of justice, resorted to by the mortgagor, or others at his instance, we
cannot but take note of the reality that the consent decree passed on 03.03.2000
quantified the dues to the bank @ Rs.6,04,273/- plus future interest. This sum
swelled to Rs.18,03,552/- as on 23.11.2004 and to Rs.20,14,044.52 as on
10.06.2005, for which the recovery certificate was issued. It is probably on account
of his ignorance of the legal provisions or on account of wrong advise received by
him that he chose not to pay the decree amount earlier and redeem his property.
At any rate, if we were to find that the sale conducted by the bank in 24.02.2014
was illegal, then it would be a travesty of justice if we were to non-suit the
W.P.(C).No.30651/2017& : 14 :O.P.(DRT).No.136/2018
mortgagor in his quest for a redemption of the mortgaged property, on purely
technical grounds.
13. In the instant case, the creditor bank had already obtained a consent
decree from the Sub Court, Ernakulam that entitled it to certain sums of money
from the mortgagor, as also a right to sell the mortgaged property for the purposes
of realisation of the dues from the mortgagor. It was this decree that was sought to
be executed by the bank when it preferred the O.A. before the DRT in terms of
Section 19 read with Section 31A of the RDDBFI Act. On the final order being
passed by the DRT in the said O.A., and a Recovery Certificate having been issued
based thereon, the bank was to proceed to recover the money in one of the modes
prescribed in Section 25 of the RDDBFI Act. It would appear that the bank chose to
move for attachment and sale of the immovable property for recovering its dues. In
terms of Section 29 of the RDDBFI act, the bank was obliged to follow the
procedure for recovery of tax, as prescribed under the Second Schedule to the
Income Tax Act, read with the Income Tax (Certificate Proceedings) Rules, 1962, to
the extent applicable to the proceedings under the RDDBFI Act. The Part III of the
Second Schedule to the Income Tax Act deals with the procedure for attachment
and sale of immovable property. In the instant case, since the mortgage was one
created by deposit of title deeds, there was no necessity for the bank to resort to a
procedure for attachment of the property as a pre-condition for, or prior to, the sale
thereof. Rule 68B of the Second Schedule to the IT Act clearly mandates that no
W.P.(C).No.30651/2017& : 15 :O.P.(DRT).No.136/2018
sale of immovable property shall be made after the expiry of three years from the
end of the financial year in which the order giving rise to a demand of dues became
conclusive. In the context of the recovery steps initiated under the RDDBFI Act, this
would translate as three years from the end of the financial year in which the
recovery certificate was issued. While, the learned counsel for the auction
purchaser would vehemently contend that Rule 68B would apply only in a situation
where there was an attachment of the immovable property prior to its sale, we are
of the view that the phrase “shall, as far as possible, apply with necessary
modifications as if the said provisions and the rules referred to the amount of debt
due under this Act instead of to the Income Tax Act” appearing in Section 29 of the
RDDBFI clearly indicates that the words “for the recovery of which the immovable
property has been attached” appearing in Rule 68B are wholly irrelevant, when an
attachment of the immovable property is not required prior to its sale, on account
of the title deeds of the property already being in the hands of the creditor
consequent to the creation of the mortgage by deposit of title deeds. The recovery
certificate in the instant case was issued on 09.09.2005 and, as per the provisions
of Rule 68B, the sale should have taken place on or before 31.03.2009. The sale
proclamation in the instant case, however, was only on 28.10.2013, and the sale
itself on 24.02.2014, more than eight years after the issuance of the recovery
certificate. As none of the exceptional circumstances mentioned in Rule 68B for
extending the time limit, are made out in the instant case, the sale conducted by
the bank was clearly illegal and void.
W.P.(C).No.30651/2017& : 16 :O.P.(DRT).No.136/2018
14. Having found that the sale conducted was contrary to the statutory
provisions, and therefore a nullity in law, we have to now consider how best we can
restore the parties to the position that existed immediately prior to the sale. Based
on our directions, the learned counsel for the bank has furnished a statement
showing the dues that were outstanding from the mortgagor to the bank, as on
31.03.2009 on or before which date the sale had to be conducted by the bank as
per the statutory provisions. The figure arrived at, by adopting the interest rate
mentioned in the decree of the Sub-Court, Ernakulam is Rs.43,51,362.85. As per
the provisions of the RDDBFI Act, if the mortgagor had paid the said amount to the
Bank on 31.03.2009, he would have been entitled to redeem the mortgaged
property. As we are dealing with a situation where a sale, albeit illegal, had taken
place and the property is purchased by the auction purchaser, we have to take cue
from the provisions of the Second Schedule to the IT Act, to determine the extent
to which the auction purchaser would have to be compensated for the sale that has
been set aside. Rule 60 of the recovery Rules, while dealing with the procedure to
set aside a sale of immovable property on deposit by the defaulter of the amounts
due to the creditor, indicates that the purchaser has to be paid, by way of penalty, a
sum equal to five per cent of the purchase money, but not less than one rupee. The
auction purchaser had paid an amount of Rs.37,80,000/- for purchasing the
property, and five per cent of the said amount i.e. Rs.1,89,000/- would have to be
paid to him by the mortgagor, at whose instance the sale was set aside.
W.P.(C).No.30651/2017& : 17 :O.P.(DRT).No.136/2018
15. The upshot of the above discussion is that while the Cont. Case
(C).No.681/2018 will be dealt separately, in view of our prima facie finding on the
contumacious obstruction by the guarantor/mortgagor, W.P.(C).No.30651 of 2017,
preferred by the auction purchaser, seeking police protection for execution of the
warrant of the Recovery Officer of the Debt Recovery Tribunal is dismissed, and O.P.
(DRT).No.136 of 2018 preferred by the mortgagor is allowed on the following
terms:
i. The sale that took place on 24.02.2014, having breached the
condition in Rule 68B of the Second Schedule to the IT Act requiring it to take
place within three years from the date of the recovery certificate, is set aside
as illegal and void.
ii. As a consequence to the said declaration, the Recovery certificate
issued by the Debt Recovery Tribunal on 09.09.2005, the Sale proclamation
dated 28.10.2013 as also the order dated 22.5.2015 of the Recovery Officer,
DRT [Ext.P5], by which an Advocate Commissioner was appointed for the
purposes of executing the final order dated 10.6.2005 of the DRT, are also set
aside.
iii. The mortgagor petitioner in O.P.(DRT).No.136 of 2018 shall pay an
amount of Rs.43,51,362.85 to the bank in order to redeem the mortgaged
W.P.(C).No.30651/2017& : 18 :O.P.(DRT).No.136/2018
property. He shall, in addition to the said amount, pay an amount of
Rs.1,89,000/- to the auction purchaser, petitioner in W.P.(C) No.30651 of
2017. The said payments shall be effected on or before 15.3.2019. On the
said payments being made, the mortgagor shall be entitled to return of the
title deeds in respect of the mortgaged property from the bank and on receipt
of the same, he shall approach the village officer, with whom we had
entrusted the task of securing vacant possession of the mortgaged property,
for obtaining restoration of possession of the property.
iv. If the petitioner in O.P.(DRT).No.136 of 2018 defaults in payment of
the aforesaid amounts, within the time granted, the bank will be free to
proceed with the recovery steps based on the Final Order dated 10.06.2005 of
the Debt Recovery Tribunal in O.A.No.6 of 2005. In that event, the bank will
be at liberty to seek a fresh recovery certificate from the Recovery Officer of
the Debt Recovery Tribunal. The bank will also, in that event, be entitled to
have vacant possession of the mortgaged property and the village officer shall
do the needful to ensure that.
v. As for the auction purchaser, he shall be entitled to a return of the
purchase money paid by him for the property at the sale held on 24.04.2014.
He shall also be entitled to the bank rate of interest, as applicable to savings
accounts, for the said amount for the period from the date of payment of the
W.P.(C).No.30651/2017& : 19 :O.P.(DRT).No.136/2018
purchase price to the date of refund to him of the said sum by the bank.
Further, in the event of the petitioner in O.P.(DRT).No.136 of 2018 not paying
him the amount of Rs.1,89,000/- within the time granted in this judgment, he
is permitted to recover the said amount from the bank which, in turn, shall
add the said sum to the amounts outstanding from the mortgagor and treat it
as forming part of the decree amount recoverable from the mortgagor.
Sd/- HRISHIKESH ROY
CHIEF JUSTICE
Sd/- A.K.JAYASANKARAN NAMBIAR
JUDGEprp/
W.P.(C).No.30651/2017& : 20 :O.P.(DRT).No.136/2018
APPENDIX OF W.P.(C).NO.30651/2017
PETITIONER'S EXHIBITS:
EXHIBIT P1 THE TRUE COPY OF SALE DEED BEARING NO.C50 OF2015 DATED 27/2/2015 OF THE SUBREGISTRAR,ERNAKULAM
EXHIBIT P2 THE TRUE COPY OF THE PROPERTY TAX REMITED BYTHE PETITIONER ON HIS PROPERTY DATED12/4/2016
EXHIBIT P3 THE TRUE COPY OF THE ENCUMBRANCE OF THEPROPERTY IN SURVEY NO.648/7/3 IN BLOCKNO.5.OF THRIKKAKKARA NORTH VILLAGE DATED10/03/2015
EXHIBIT P4 THE TRUE COPY OF THE DECREE IN O.S.39/99DATED 3/3/2000 IN THE FILE OF ADDITIONAL SUBCOURT,ERNAKULAM
EXHIBIT P5 THE TRUE COPY OF THE JUDGMENT INOP(DRT)NO.4444/13 DATED 16/12/2013 OF THISHONOURABLE COURT
EXHIBIT P6 THE TRUE COPY OF JUDGMENT DATED 2/2/2015 INWP(C)NO.15366/2014.
EXHIBIT P7 THE TRUE COPY OF THE JUDGMENT DATED 5/3/2015IN WA NO.523/5 THIS HONOURABLE COURT
EXHIBIT P8 THE TRUE COPY OF THE JUDGMENT DATD 14.3.2017IN CRP NO.41/17 OF THIS HONOURABLE COURT.
EXHIBIT P9 THE TRUE COPY OF THE LETTER ISSUED UNDATEDTO THE 3RD RESPONDENT
EXHIBIT P10 THE TRUE COPY OF THE ACKNOWLEDGMENT OFRECEIPT ISSUED BY THE 3RD RESPONDENT TO THEADVOCATE COMMISSIONER ALONG WITH THE REQUESTOF THE ADVOCATE COMMISSIONER.
EXHIBIT P11 THE TRUE COPY OF THE RELEVANT PAGES OF THEINTERIM REPORT FILED BY THE ADVOCATECOMMISSIONER DATED 18.8.2017.
W.P.(C).No.30651/2017& : 21 :O.P.(DRT).No.136/2018
RESPONDENTS EXHIBITS:
EXHIBIT R7(A) TRUE COPY OF THE PROCLAMATION OF SALE DATED28.10.2013.
EXHIBIT R7(B) TRUE COPY OF ORDER DATED 22.5.2015, OF THE RECOVERYOFFICER.
EXHIBIT R7(C) TRUE COPY OF MEMO DATED 28.2.2000, FILED BY COUNSELFOR THE DEFENDANTS 1 TO 4 IN O.S.NO.39/1999.
EXHIBIT R7(D) TRUE COPY OF COMPLAINT BY THE 7TH RESPONDENTNUMBERED AS C.P.NO.63 OF 2014.
EXHIBIT R7(E) TRUE COPY OF I.A.NO.1291/2017 IN O.A.NO.6/2005BEFORE THE DEBTS RECOVERY TRIBUNAL – I, ERNAKULAM.
EXHIBIT R7(F) TRUE COPY OF I.A.NO.1292/2017 IN O.A.6/2005 BEFORETHE DEBTS RECOVERY TRIBUNAL-I, ERNAKULAM.
EXHIBIT R7(G) TRUE COPY OF I.A.NO.2112/2017 IN O.A.6/2005 BEFORETHE DEBTS RECOVERY TRIBUNAL-I, ERNAKULAM.
EXHIBIT R7(H) TRUE COPY OF THE SALE DEED NO.752/1997, SROEDAPPALLY.
EXHIBIT R7(I) TRUE COPY OF THE MASTER CIRCULAR NO.DBOD.NO.DIR.BC15/13/03.00/2013-14 DATED 1.7.2013 OF RESERVE BANK OF INDIA.
EXHIBIT R7(J) TRUE COPY OF THE FIR NO.213/CR/EOW-II, KTM, CBCID,KOTTAYAM.
EXHIBIT R7(K) TRUE COPY OF THE VALUATION REPORT DATED 11.10.2017.
EXHIBIT R5(A) TRUE COPY OF THE JUDGMENT DT. 7.6.2017 IN O.P.(DRT).NO.27/2017.
EXHIBIT R5 (B) TRUE COPY OF THE FINAL ORDER DR. 25.7.2017 INAPPEAL NO.3/2017.
//TRUE COPY//
P.S. TO JUDGE
W.P.(C).No.30651/2017& : 22 :O.P.(DRT).No.136/2018
APPENDIX OF O.P.(DRT).NO.136/2018
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE ORDER OF DRT DT. 10.6.2005.
EXHIBIT P2 TRUE COPY OF THE RECOVERY CERTIFICATE DT. 9.9.2005.
EXHIBIT P3 TRUE COPY OF THE PROCLAMATION DT. 28.10.2013.
EXHIBIT P4 TRUE COPY OF DB JUDGMENT IN 'KUTA GUPTAN'.
EXHIBIT P5 THE ORDER OF APPOINTMENT OF THE ADVOCATE COMMISSIONERDATED 22.5.2015.
RESPONDENTS EXHIBITS:
EXHIBIT R2(A) TRUE COPY OF THE JUDGMENT IN O.P.(DRT).NO.4444/2013DATED 16.12.2013.
EXHIBIT R2(B) TRUE COPY OF THE JUDGMENT IN W.P.(C).NO.15366/2014DATED 2.2.2015.
EXHIBIT R2(C) TRUE COPY OF THE JUDGMENT IN W.A.NO.523/2015 DATED5.3.2015.
EXHIBIT R2(D) TRUE COPY OF THE ORDER IN CRP.NO.41/2017 DATED16.3.2017.
EXHIBIT R2(E) TRUE COPY OF THE JUDGMENT IN O.P.(DRT).NO.27/2017DATED 7.6.2017.
EXHIBIT R1(A) TRUE COPY OF JUDGMENT DTD. 16.12.2013 IN O.P.(DRT)NO.4444/2013 OF THIS HON'BLE COURT.
EXHIBIT R1(B) TRUE COPY OF THE JUDGMENT DTD. 2.2.2015 IN W.P.(C).NO.15366/2014 OF THIS HON'BLE COURT.
EXHIBIT R1(C) TRUE COPY OF JUDGMENT DTD. 5.3.2015 INW.A.NO.523/2015 OF THIS HON'BLE COURT.
EXHIBIT R1(D) TRUE COPY OF ORDER DTD. 16.3.2017 INC.R.P.NO.41/2017.
W.P.(C).No.30651/2017& : 23 :O.P.(DRT).No.136/2018
EXHIBIT R1(E) TRUE COPY OF JUDGMENT DT. 7.6.2017 IN OP(DRT)NO.27/2017.
EXHIBIT R1(F) TRUE COPY OF ORDER OF DEBT RECOVERY TRIBUNALDISMISSING APPEAL NO.3/2017 AS PER FINAL ORDER DT. 25.7.2017.
EXHIBIT R1(G) TRUE COPY OF THE ORDER SHEET OF THE PROCEEDINGSMAINTAINED BY RECOVERY OFFICER OF DEBT RECOVERY TRIBUNAL.
EXHIBIT R1(H) TRUE COPY OF JUDGMENT IN WP(C).NO.1796/2018 DT.5.4.2018 OF THIS HON'BLE COURT.
//TRUE COPY//
P.S. TO JUDGE