Kerala High Court
Dr.A.Siraj vs The Kerala Financial Corporation on 11 November, 2025
2025:KER:85694
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 11TH DAY OF NOVEMBER 2025/20TH KARTHIKA, 1947
RSA NO. 153 OF 2011
AGAINST THE JUDGMENT AND DECREE DATED 04.11.2010 IN AS
NO.281 OF 2007 OF THE DISTRICT COURT, THIRUVANANTHAPURAM
ARISING OUT OF THE JUDGMENT AND DECREE DATED 04.10.2007
IN OS NO.154 OF 2004 OF THE PRINCIPAL SUB COURT,
THIRUVANANTHAPURAM
APPELLANT/RESPONDENT/4TH DEFENDANT:
DR.A.SIRAJ
S/O AHAMMED NIZANSHA, SAHITHA NO.XVI/301,
R.C.ROAD,SOUTH KARUVELIPADY,PALLURUTHY, .P.O,
ERNAKULAM,NOW RESIDING AT MGRA-34,MEPPALLI,
GARDENS,PALKULANGARA,PETTAH,THIRUVANANTHAPURAM.
BY ADVS.
SHRI.R.S.KALKURA
SHRI.M.S.KALESH
RESPONDENTS/APPELLANTS & RESPONDENTS 1 TO 3/PLAINTIFF &
DEFENDANTS 1 TO 3:
1 THE KERALA FINANCIAL CORPORATION
REPRESENTED BY ITS CHIEF MANAGER,BRANCH
OFFICE,VELLAYAMBALAM,, PIN-695522.
2 LAL KUMAR.G, S/O.GANGADHARAN NAIR
CHITTAMKONATHU VEEDU,CHERUVAKKAL VILLAGE,,
SREEKARIYAM.P.O,THIRUVANANTHAPURAM,
PIN -695017.
2025:KER:85694
R.S.A Nos.153 and 1189 of 2011
2
3 RITA ALOYSIUS MIRANDA
D/O.JOSEPH CRUS, KMC-26,KATTIL
HOUSE,KUNNATHALUMOODU,KAYAMKULAM.P.O,
ALAPPUZHA, PIN - 690 502.
4 K.V.KUNJIRAMAN NAIR,
S/O.VELIPILLAI, P.K.BHAVAN,CHERUVAKKAL,NOW
RESIDING AT P.K.BHAVAN,, MOONGODU DESAM AND
P.O.,VILAPPIL VILLAGE,, THIRUVANANTHAPURAM,
PIN - 695144.
BY ADVS.
SMT.DHANYA P. ASOKAN,(SR.), FOR R1
SHRI.M.R.VENUGOPAL, SC, KFC
SRI.PIRAPPANCODE V.S.SUDHIR, FOR R2
THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY
HEARD ON 11.11.2025, ALONG WITH RSA.1189/2011, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:85694
R.S.A Nos.153 and 1189 of 2011
3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 11TH DAY OF NOVEMBER 2025/20TH KARTHIKA, 1947
RSA NO. 1189 OF 2011
AGAINST THE JUDGMENT AND DECREE DATED 04.11.2010 IN AS
NO.281 OF 2007 OF THE DISTRICT COURT, THIRUVANANTHAPURAM
ARISING OUT OF THE JUDGMENT AND DECREE DATED 04.10.2007
IN OS NO.154 OF 2004 OF THE PRINCIPAL SUB COURT,
THIRUVANANTHAPURAM
APPELLANT/1ST DEFENDANT:
LAL KUMAR G
S/O. GANGADHARAN NAIR, CHITTAMKONATHY VEEDU,
CHERUVAKKAL VILLAGE, SREEKARIYAM P.O.,
THIRUVANANTHAPURAM.
BY ADV
SRI.PIRAPPANCODE V.S.SUDHEER
RESPONDENT/PLAINTIFF & DEFENDANTS 2 TO 4:
1 KERALA FINANCIAL CORPORATION
REPRESENTED BY ITS CHIEF MANAGER,
BRANCH OFFICE, VELLAYAMBALAM, PIN - 695 121.
2 RITA ALOYISIUS MIRANDA,
D/O. JOSEPH CRUS, KMC-26 KATTIL HOUSE,
KUNNATHALUMOODE, KAYAMKULAM P.O., ALAPPUZHA
PIN - 690 502.
2025:KER:85694
R.S.A Nos.153 and 1189 of 2011
4
3 K.V. KUNJIRAMAN NAIR,
S/O. VELUPILLAI, P.K. BHAVAN, CHERUVAKKAL,
NOW RESIDING AT P.K. BHAVAN, MOONGODU DESOM AND
P.O., VILAPPIL VILLAGE, THIRUVANANTHAPURAM
PIN - 695 144.
4 DR. A SIRAJ,
S/O. AHAMMED NIZANSHA, SAHITHA, NO. XVI/301,
RC ROAD SOUTH KARUVELIPADI, PALLURUTHI P.O.,
ERNAKULAM, NOW RESIDING AT MGRA-34,
MEPPALLY GARDENS, PALKULANGARA, PETTAH,
THIRUVANANTHAPURAM, PIN - 695 032.
BY ADVS.
SMT.DHANYA P. ASOKAN, (SR.), FOR R1
SHRI.M.R.VENUGOPAL, SC, KFC
THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY
HEARD ON 11.11.2025, ALONG WITH RSA.153/2011, THE COURT
ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:85694
R.S.A Nos.153 and 1189 of 2011
5
EASWARAN S., J
--------------------------------
R.S.A No.153 of 2011
&
R.S.A No.1189 of 2011
-------------------------------
Dated this the 11th day of November, 2025
JUDGMENT
These appeals arise out of the judgment and decree in A.S No.281/2007 on the files of the District Court, Thiruvananthapuram.
2. The brief facts necessary for the disposal of these appeals are as follows:-
The Kerala Financial Corporation instituted O.S No.154/2004 before the Principal Sub Court, Thiruvananthapuram. The suit was for declaration that the sale confirmation dated 26.11.2003 and also further execution proceedings in E.P No.75/2001 in O.S No.1570/1999 on the files of the Munsiff Court, 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 6 Thiruvananthapuram, is not bounded upon them. According to the Kerala Financial Corporation, the 2 nd defendant in the suit had applied for a credit facility on 07.10.1997 for an amount of Rs.7, 45,000/- and the said credit facility was secured by an equitable mortgage over 36 cents in Survey No.184/8-1 of Kazhakuttom Menamkulam Village, Thiruvananthapuram Taluk with a residential building and a personal guarantee. The deposit of the title deed was confirmed on 12.11.1997.
Since there was a default in the payment of the loan amount, the property was taken possession on 06.04.2000 and a mahazer was drawn. On 17.11.2001 a paper publication was effected for the sale of the mortgage property. A prospective purchaser also came forward to purchase the property for an amount of Rs.8,20,000/- and deposited an amount of Rs.1,50,000/- as advance purchase amount. But later, he came to know that O.S No.1570/1999 was filed before the Munsiff 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 7 Court for realisation of the sum of Rs.93,750/- with interest and a decree was passed on 19.11.1999. In execution of the said decree the plaint schedule property was attached on 28.02.2001 and brought for sale on 29.06.2002 for sum of Rs.1,17,040/-. The plaintiff thus preferred E.A No.1097/2002 for setting aside the sale under Order 21 Rule 90 of the Code of Civil Procedure ( for short 'CPC'), but it was withdrawn on 29.10.2003 and subsequently the suit O.S No.154/2004 was instituted. The defendants resisted the suit contending that the remedy of the plaintiff was not by filing a separate suit, but the plaintiff ought to have agitated the grievances in the application for setting aside the sale. Since, the application was withdrawn, it constitutes a bar for filing a fresh suit. It was further contended that the plaintiff did not take any steps to obtain possession of the plaint schedule property, prior to the filing of the suit. On behalf of the plaintiff, Exts.A1 to A18 documents 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 8 were produced and PW1 was examined. On behalf of the defendants, Exts.B1 to B7 documents were produced and none was examined. The trial court on appreciation of oral and documentary evidence came to the conclusion that the suit filed by the plaintiff was not maintainable and the prayer to set aside the sale cannot be granted. Accordingly, the suit was dismissed. Aggrieved, the Kerala Financial Corporation preferred A.S No.281/2007 before the District Court, Thiruvananthapuram and by judgment dated 04.11.2010 partly allowed the appeal by reversing the judgment and decree of the trial court. The First Appellate Court while allowing the appeal in part, affirmed the decree as against the prayer to set aside the sale, but however, allowed the Kerala Financial Corporation to exercise its statutory rights under the State Financial Corporation Act and realise the mortgage amount due to them. Accordingly, the defendants were restrained by a consequential injunction, preventing the 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 9 plaintiff from exercising their right as a mortgagee. The 4th defendant, aggrieved by the findings rendered by the First Appellate Court has come up with R.S.A No.153/2011, whereas the 1st defendant has preferred R.S.A No.1189/2011.
3. This Court while admitting R.S.A No.153/2011 on 08.02.2011, framed the following substantial questions of law for consideration:-
(i) Whether the suit filed by the 1 st respondent is maintainable?
(ii) Whether the 1st respondent is entitle to file a separate suit when there is adequate remedy provided under Order 21, Rule 90 and 97 of C.P.C and when the said remedy is barred by limitation?
(iii) Whether the 1st respondent is legally entitled to proceed under the State Financial Corporations, Act against the plaint schedule property without any regard to the sale conducted by the executing Court especially when the sale is held to be legal and proper, rather than proceeding against the sale proceeds.
2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 10
4. Though this Court issued notice in R.S.A No.1189/2011 and going by the office notes, the appeal stands admitted on 02.12.2011, it is seen that no separate substantial questions of law were framed by this Court.
5. Still further, the 4th defendant had filed R.S.A No.153/2011, challenging the same judgment and decree in A.S No.281/2007 on the files of District Court, Thiruvananthapuram, and the substantial questions of law were framed, this Court was of the view that the same substantial questions of law, as framed in R.S.A No.153/2011 can be framed in R.S.A No.1189/2011 also.
6. Heard Shri.R.S Kalkura, the learned counsel appearing for the appellant in R.S.A No.153/2011, Shri.Pirappancode V.S. Sudheer, the learned counsel appearing for the appellant in R.S.A No.1189/2011, Smt.Dhanya P. Asokan, the learned Senior Counsel, assisted by Shri.M.R. Venugopal, the 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 11 learned Standing Counsel, appearing for the Kerala Financial Corporation.
7. The learned counsel appearing for the appellants in both these appeals are in unison in their contention as regards the maintainability of the suit preferred by the Kerala Financial Corporation. According to the learned counsel, once an application under Order 21 Rule 90 of CPC was withdrawn by the Kerala Financial Corporation, they could not have filed a separate suit raising the plea that they are not bound by the judgment and decree in O.S No.1570/1999. At any rate, it is contended that going by the principles governing the consideration of an application under Order 21 Rule 97 of CPC read with Rule 99 and 101 of CPC, a separate suit cannot be maintained by the Kerala Financial Corporation. Therefore, according to the learned counsel for both the appellants, the First Appellate Court erred egregiously in holding that, since 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 12 the Kerala Financial Corporation is a third party, they can maintain the suit. It is also further pointed that going by the plaint averments, its an admitted case that the delivery of the plaint schedule property was done in the favour of the 1st defendant and therefore it is a clear case were the provisions under Order 21 Rule 99 of CPC are attracted.
8. Per contra, Smt.Dhanya P. Asokan, the learned Senior Counsel appearing for the Kerala Financial Corporation would contend that the Bar in maintaining a separate suit is not attracted, if an application under Rule 21 Order 90 of CPC is rejected by the court. In fact, the application preferred by the Kerala Financial Corporation was withdrawn and there was no adjudication on merits. At any rate, the learned Senior Counsel would point out the paramount charge by virtue of mortgage in favour of the Kerala Financial Corporation cannot be ignored by the court and the 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 13 appellants cannot have any better title over the property. In support of her contentions, relied on the decision of the Hon'ble Supreme Court in Gujarat State Financial Corporation v. Natson Manufacturing Co. Pvt. Ltd. and others [1979 (1) SCC 193]. She would thus contend that the First Appellate Court had correctly appreciated the facts and law on the point and had given liberty to the Kerala Financial Corporation to proceed with the same. It is further contended that even if the sale in favour of the 1st defendant/ appellant in R.S.A No.1189/2011 is upheld, even then, the prior charge over the property by virtue of equitable mortgage cannot be ignored by them.
9. In reply, Shri.R.S.Kalkura, the learned counsel for the appellant in R.S.A No.153/2011, pointed out that the suit is hit by the proviso to Section 34 of the Specific Relief Act and that is an additional point, which the courts below ought to have looked into, even if it is 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 14 assumed that the suit was maintainable under law.
10. I have considered the rival submissions raised across the Bar, perused the judgments of the courts below and also the records of these cases.
11. The only point that requires to be considered by this Court is as to whether a separate suit was maintainable at the instance of the Kerala Financial Corporation to declare that the sale conducted by the civil court was not binding upon them and to set aside the same. The right of the Kerala Financial Corporation flows out of the equitable mortgage created by the borrower on 12.11.1997, which is much prior to the filing of the suit for recovery of money. Therefore, going by the principle 'once a mortgage is always a mortgage' , as on the date of institution of O.S No.1570/1999 for recovery of money and the consequential actions taken for execution of the decree granted by the Munsiff Court in the aforesaid suit, the property was already subjected 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 15 to mortgage. Therefore, even if, any sale was conducted in favour of the 1st defendant and pursuant to such sale, the appellant in R.S.A No.153/2011 having come to possession of the property by virture of the subsequent assignment, the said transfer is always subject to the paramount charge of the Kerala Financial Corporation. In such circumstances, the larger question is whether the Kerala Financial Corporation should have filed the suit at all, at the first instance.
12. Read as may, this Court could not find any interdicting provisions under the law, which prevents the Kerala Financial Corporation from exercising their paramount charge over the property by virture of the provisions contained under the State Financial Corporation Act. Though the parties are serious variance as regards the question whether the Kerala Financial Corporation has taken possession over the property or not, it is immaterial as far as the present 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 16 case is concerned, because the further action of the Kerala Financial Corporation is depended upon the mortgage and not on the question as to whether they have taken possession or not.
13. Suffice to say, as far as the present case is concerned, the controversy revolves around the issue as to whether the Kerala Financial Corporation could have maintained a separate suit for declaring that the court auction conducted in E.P No.75/2001 in O.S No.1570/1999 was binding upon them or not. It is in this context, the averments contained in the plaint assumes significant. According to the Kerala Fiancial Corporation, the possession of the plaint schedule property was delivered to the auction purchaser in pursuant to the proceedings in E.P No.75/2001. If that be so, it is inevitable for this Court to hold that the remedy of the Kerala Financial Corporation was to prefer an application under Order 21 Rule 99 of CPC, especially 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 17 since, it provides a remedy to a person other than the judgment debtor, who is dispossessed from the property. Order 21 Rule 101 of CPC also provides that any questions including the right title and interest of the property arising between the parties or their representatives shall be determined by the executing court not by a separate suit. It is clear that, when the Kerala Financial Corporation exercises its paramount charge of equitable mortgage of the property, it necessarily implies that as on the date of the sale in E.P No.75/2001 in O.S No.1570/1999, the judgment debtor did not have right title and interest over the property to be sold in favour of the 1 st defendant in the suit, which was later conveyed to the 4th defendant. Therefore, the right remedy available to the Kerala Financial Corporation was to prefer an application under Order 21 Rule 99 of CPC and have their charge adjudicated by the Executing Court. Therefore, this Court is unable to 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 18 subscribe to the findings rendered by the First Appellate Court as regards the maintainability of the suit. Incidentally, this Court may have to also consider, as to whether the withdrawal of the application under Order 21 Rule 90 of CPC has any consequence at all. Suffice to say that the application under Order 21 Rule 90 of CPC was not considered on merits, but it was only dismissed as withdrawn. Therefore, there cannot be any bar for initiation of subsequent proceedings at the instance of the Kerala Financial Corporation. But then, instead of initiation of subsequent proceedings under Order 21 Rule 99 of CPC, a separate suit has been filed. Obviously in view of the bar under Order 21 Rule 101 of CPC, the present suit is not maintainable. Therefore, answering the substantial questions of law as framed 1 and 2 above, this Court holds that the suit preferred by the 1 st respondent-Kerala Financial Corporation is not maintainable.
2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 19
14. Coming to the third substantial question of law, it is imperative for this Court to hold that the right of the Kerala Financial Corporation by virtue of equitable mortgage being paramount in nature, will have a primacy over the execution sale conducted by the court in E.P No.75/2001 in O.S No.1570/1999. Necessarily, when the sale conducted by the Execution Court in execution of judgment and decree in O.S No.1570/1999 being upheld, it is equally important for this Court to answer on the respective right of the Kerala Financial Corporation to bring the property for execution of the paramount right of mortgage through due process of law as provided under the State Financial Corporation Act. Therefore, it will be sufficient, if this Court answers the 3rd substantial question of law by holding that the 1 st respondent is legally entitled to proceed under the State Financial Corporation Act, subject to the exceptions provided therein. In such event, the appellants will be at 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 20 liberty to raise all such contentions as available under law as and when such proceedings are initiated by the Kerala Financial Corporation.
15. In view of the discussion as above, the substantial questions of law as framed in these appeals are answered as follows:-
(a) In view of the fact that O.S No.154/2004 is held to be not maintainable, there is no relevance for the substantial questions of law 1 and 2 framed in the appeal. In view of the answer given by this Court to the third substantial question of law framed in R.S.A No.153/2011, the third substantial question of law is answered against the appellant and it is held that notwithstanding the court auction, the Kerala Financial Corporation is entitled to proceed for enforcement of their mortgage under the State Financial Corporation Act, 2025:KER:85694 R.S.A Nos.153 and 1189 of 2011 21 subject to the exceptions, if any.
Hence, these appeals are disposed of with the above observations. The parties shall bear their respective costs.
Sd/-
EASWARAN S. JUDGE AMR