Kerala High Court
Molly Joseph vs Sundaram Bnp Paribas Home Finance Ltd on 5 July, 2024
Author: P Gopinath
Bench: P Gopinath
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
FRIDAY, THE 5TH DAY OF JULY 2024 / 14TH ASHADHA, 1946
WP(C) NO. 33092 OF 2022
PETITIONER/S:
MOLLY JOSEPH
AGED 66 YEARS
MEYYKAMTHURUTHIL HOUSE, 5/44, PARAYAKAD, NORTH
PARAVOOR, PIN - 683512
BY ADV C.AJITH KUMAR
RESPONDENT/S:
1 SUNDARAM BNP PARIBAS HOME FINANCE LTD.
SUNDARAM TOWERS, NO.46, WHITES ROAD, CHENNAI,
REPRESENTED BY ITS AUTHORIZED OFFICER AT AREA OFFICE,
2ND FLOOR, ELIZABETH ALEXANDER MEMORIAL BUILDING,
MARINE DRIVE, ERNAKULAM, PIN - 682031
2 R.M.NISSAR
7/945, RAMANATHPARAMBIL HOUSE, PANAYAPPILLY, KOCHI, PIN
- 682002
3 AFREEN NISSAR
7/945, RAMANATHPARAMBIL HOUSE, PANAYAPPILLY, KOCHI, PIN
- 682002
4 BABU@BABURAJ
AANAMTHURUTHI HOUSE, KAKKANAD, KOCHI, PIN - 682030
BY ADVS.
K.J.SAJI ISAAC
JITHIN SAJI ISAAC
ELIZABETH VARKEY(E-25)
AJEESH EMMANUEL(K/109/2012)
SHAMSUDEEN O.K.(K/000687/2017)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
05.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P (C) No.33092/2022 -2-
JUDGMENT
The petitioner has approached this court challenging Ext.P6 order of the Debts Recovery Tribunal, Ernakulam in NDN SA No.1312/2022 holding that the securitization application filed under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the SARFAESI Act) is barred by limitation. It is the case of the petitioner that the delay in filing the securitiziation application is stated to be 4 days in Ext.P6 order. It is submitted that the finding in Ext.P6 order is that the securitization application ought to have filed on or before 15-09-2022 and the same was filed only on 19-09-2022. That apart, it is the case of the learned counsel for the petitioner that the petitioner is a third party who have no connection with the 1st respondent bank. She came to know of the proceedings for taking of physical possession only on 23-08-2022 and she immediately thereafter approached the Chief Judicial Magistrate Court by filing a petition to adjudicate the claim of the petitioner. It is submitted that the petitioner also approached this court by filing OP (DRT) No.377/2022 which was disposed of this court by Ext.P5 judgment. Paragraph 4 of the judgment reads as follows:-
"4. Having regard to the limited nature of relief sought for by the petitioner, it is directed that proceedings of taking physical possession of the property allegedly belonging to the petitioner W.P (C) No.33092/2022 -3- shall be deferred till 17.10.2022 to enable the petitioner to obtain a certified copy of the order passed on Ext.P2 application and to pursue such other legal remedies as may be open to the petitioner, making it clear the I have not expressed any opinion on the merits of the matter."
When the petitioner approached the Tribunal, the Tribunal took the view that the limitation would count from 01-08-2022 which is the date of issuance of the notice by the Advocate Commissioner. It is reiterated that the petitioner was not recipient of the notice issued by the Advocate Commissioner and came to know of the proceedings only on 23-08-2022. It is also stated though certain observations on the merits of the claim raised by the petitioner before the Tribunal have been made such observations cannot be taken into consideration as findings on merits as the securitization application itself was not numbered by the Tribunal. It is submitted that there is clear finding in Ext.P6 order of the Tribunal that the securitization application is being rejected as it is barred by limitation.
2. The learned counsel appearing for the 1st respondent bank vehementally opposes to grant any relief to the petitioner. It is submitted that the petitioner was clearly beyond time to challenge the proceedings initiated by the bank before the Tribunal. It is submitted that a reading of Ext.P6 order will show that the Tribunal also found that the petitioner has no locus standi to challenge the proceedings before the Tribunal. It is submitted that in such W.P (C) No.33092/2022 -4- circumstances if the petitioner is in any manner aggrieved by the findings in Ext.P6 order, it is for the petitioner to challenge the same by availing the alternate remedy available to him and there is no ground made out for interference by this court under Article 226 of the Constitution of India.
3. The learned counsel appearing for the petitioner in reply would submit that similar question was considered by this court in Vinu Thomas v. South Indian Bank Limited; 2023 (1) KLT 647, where this court held as follows:-
"4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent Bank, I am of the view that the petitioner is entitled to succeed. On each of the days after the issuance of the notice by the Advocate Commissioner, the petitioner had a cause of action to move before the Debts Recovery Tribunal and therefore, the limitation could not have been counted from the date of issuance of the notice by the Advocate Commissioner. In Sami K. v Branch Manager, Bank of India and others, 2011 (3) KHC 414, this Court held :
"6. At the outset, I would note that although the Supreme Court has upheld the constitutional validity of the Act, it cannot be gainsaid that the Act is a very harsh legislation, which results in very disastrous consequences to the owner of the property against which a measure under S.13(4) of the Act has been taken. That being so, the provisions regarding the remedies provided for persons aggrieved by such action should be construed liberally. No doubt, the Supreme Court has categorically held that no application / appeal would lie against any action taken by the financial institution prior to taking a measure under S.13(4). Therefore, the right to resort to remedies under S.17 would arise only when any one of the measures contemplated under S.13(4) or thereafter is initiated, is his contention. I am of opinion that it is not necessary for an aggrieved person to wait till actual or symbolic possession is taken by the financial institution W.P (C) No.33092/2022 -5- before resorting to the remedy as provided under S.17. Take for example, a case where a person against whom proceedings under the securitization proceedings have been initiated, has a case that he was not a party to the loan transaction at all, but by fraud or forgery, he has been made a borrower or a surety. In such cases, it would be nothing but sheer injustice to say that he has to wait till the financial institution takes possession and throws him out into the street before he can resort to the only remedy available to him under law, which is filing of an application / appeal under S.17 of the Act. I am of opinion that the rigour of the provisions of the Act should not be taken to that extreme extent to deny even the right of appeal under S.17, which is the only remedy provided to an aggrieved person against a measure under S.13(4). This is all the more so since the Supreme Court has time and again held that High Courts should not ordinarily entertain writ petitions challenging proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and should relegate the parties to the remedy by way of appeal under S.17 of the Act before the Debt Recovery Tribunal. I am of opinion that despite the vehement protestations of counsel for the banks, particularly by the Union Bank of India, going by the decisions of the Supreme Court, the very fact of the financial institutions approaching the Magistrate under S.14 itself would constitute a measure under S.13(4) of the Act, against which an appeal can be filed by the aggrieved person before the Tribunal under S.17. Counsel for the banks point out that in the decisions of Mardia Chemicals Case & Transcore case (supra), the Supreme Court has held that only when a measure under S.13(4) is actually taken, an appeal would lie. No doubt, that is the legal position. But the question is when exactly a measure under S.13(4) can be stated to be actually taken. I am not inclined to accept the contention of the counsel for the banks that, that would only be when possession is actually taken by the financial institution. Any measure under S.13(4) would constitute a cause of action for filing an appeal under S.17. The mere decision of the financial institution to approach the Magistrate under S.14 would also constitute a measure under S.13 (4). Reliance by the learned counsel for the Union Bank of India on the Division Bench decision of W.P (C) No.33092/2022 -6- this Court in Muhammed Ashraf's case (supra) is misplaced, according to me. That decision only says that no appeal would lie against an order of the Magistrate under S.14 or the action of the Commissioner appointed by the Magistrate to take possession. That decision does not say that the action of the bank in approaching the Magistrate under S.14 would not constitute a measure under S.13(4)."
I am in complete agreement with the view taken by this Court in Sami K. (supra) that the provisions should be construed liberally. The law is harsh. The Bank is the claimant, the judge and the executioner. The contention of the learned counsel for the respondent that the cause of action arises on the date of issuance of notice by the Advocate commissioner and not thereafter during the period of notice, cannot be accepted. This is more so as the learned counsel appearing for the respondent Bank does not dispute that the petitioner will have a cause of action after the physical possession of the secured asset is actually taken by the Advocate Commissioner. In Roshan Narayanan C.S. v Authorized Officer, Central Bank of India and Another, 2017 (3) KHC 617, this court held:
"Further, to deny the borrower access to the DRT at that stage, questioning the step taken by the secured creditor to get physical possession, would tantamount to ignoring the constitutional right available to him under Art. 300A of the Constitution of India. Deferring legal access to a stage after he has been dispossessed would render meaningless his right under Art. 300A, a right that is now seen as an integral facet of one's right to life under Art. 21 of the Constitution."
In light of the above decisions, I am of the view that on each of the days after the issuance of notice by the Advocate Commissioner, the petitioner has a cause of action to move the Debts Recovery Tribunal."
4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the 1 st respondent bank, I am of the view that the petitioner is entitled to some relief in the present writ petition going by the law laid down by this court in Vinu Thomas (supra). The Tribunal could not have held that the securitization application filed by the petitioner W.P (C) No.33092/2022 -7- was filed beyond the period of limitation. I also find considerable merit in the contention taken by the learned counsel appearing for the petitioner that since the Tribunal had already found that the application was barred by limitation, the observations on merits in Ext.P6 order of the Tribunal cannot be seen as findings on the merits of the claim before the Tribunal especailly taking into account the contention of the learned counsel for the petitioenr that the petitioner never addressed any arguments on the merits before the Tribunal and the Tribunal merely rejected the application on the ground that it was barred by limitation. In that view of the matter, the writ petition is allowed. Exhibit P6 is quashed. The securitization application filed by the petitioner shall be treated as one filed in time. The securitization application filed by the petitioner will thus stand restored to the file of the Debts Recovery Tribunal, Ernakulam. The Tribunal shall consider the application in accordance with the law and take a decision in the matter after affording an opportunity of hearing to the petitioner and all affected parties. I make it clear that I have not expressed any opinion on the merits of the contentions raised by either side and Ext.P6 order is being set aside only on the ground that the finding that the securitization application filed by the petitioner is barred by limitation is contrary to the law laid down by this court in Vinu Thomas (supra).
W.P (C) No.33092/2022 -8-
Status-quo as on today shall be maintained for a period of two weeks to enable the petitioner to approach the Tribunal and seek appropriate interim relief.
Sd/-
GOPINATH P. JUDGE AMG W.P (C) No.33092/2022 -9- APPENDIX OF WP(C) 33092/2022 PETITIONER EXHIBITS Exhibit-P1 TRUE PHOTOCOPY OF THE SALE DEED NO.3566/2012 OF SUB REGISTRY, NORTH PARUR Exhibit-P2 TRUE PHOTOCOPY OF THE M.P NO.3931/2022 IN M.C NO.541/2018 FILED BY THE PETITIONER Exhibit-P3 TRUE PHOTOCOPY OF THE UNREGISTERED SECURITIZATION APPEAL NDN/1312/2022 (S.A) FILED BY PETITIONER BEFORE THE DEBT RECOVERY TRIBUNAL-I, ERNAKULAM, WITHOUT ANNEXURES Exhibit-P4 TRUE COPY OF THE ORDER DATED 20/09/2022 IN CMP NO.3931/2022 IN M.C.NO.541/2018, ON THE FILES OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM Exhibit-P5 TRUE COPY OF THE JUDGMENT IN O.P (DRT) NO.377/2022 OF THIS HON'BLE COURT Exhibit-P6 TRUE COPY OF THE ORDER DATED 23/09/2022 IN NDN (SA) NO.1312/2022 OF DRT-I, ERNAKULAM.