Kerala High Court
M.R.Satheesh Kumar vs Soya.B on 11 April, 2025
EX.SA NO. 22 OF 2014
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2025:KER:31976
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE M.A.ABDUL HAKHIM
FRIDAY, THE 11TH DAY OF APRIL 2025 / 21ST CHAITHRA, 1947
EX.SA NO. 22 OF 2014
AGAINST THE JUDGMENT DATED 08.08.2014 IN AS NO.91 OF 2013 OF
II ADDITIONAL DISTRICT COURT, THIRUVANANTHAPURAM
ARISING OUT OF THE ORDER DATED 19.06.2013 IN E.A.NO.1394/2007 IN
E.P.NO.166/2005 IN OS NO.54 OF 2003 OF II ADDITIONAL SUB COURT,
THIRUVANANTHAPURAM
APPELLANT/APPELLANT/DECREE HOLDER:
M.R.SATHEESH KUMAR
S/O.MADAVAN NAIR, TC 45/547, ATTUKAL VEEDU, ARYANKUZHI,
KAMALESWARAM, THIRUVANANTHAPURAM.
BY ADVS.
SRI.T.M.CHANDRAN
SRI.S.SUJITH
RESPONDENTS/RESPONDENTS/CLAIMANT-JUDGMENT DEBTOR:
1 SOYA.B.
D/O.MARIYAMMA, RESIDING AT TC 28/468(1), NEAR KAITHAMUKKU,
THIRUVANANTHAPURAM 695 001.
2 J.K.FURNISHING
REPRESENTED BY PROPRIETOR, JAYADEV PALIYATH,
EX.SA NO. 22 OF 2014
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S/O.M.R.REVIVARMA, TEMPLE VIEW, TC 28/812, PUNNAPURAM MURI,
VANCHIYOOR, THIRUVANANTHAPURAM 695 035.
BY ADVS.
R1 SRI.G.SUDHEER
SRI.R.HARIKRISHNAN (H-308)
THIS EXECUTION SECOND APPEAL HAVING BEEN FINALLY HEARD ON 11.04.2025,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
EX.SA NO. 22 OF 2014
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2025:KER:31976
JUDGMENT
1. The appellant is the first respondent in E.A.No.1394/2007 filed under Order 21 Rule 58 of the Code of Civil Procedure and the decree holder in the suit. The 1st respondent is the claim petitioner who filed E.A.No.1394/2007. The 2nd respondent is the 2nd respondent in E.A.No.1394/2007 and judgment debtor in the suit.
2. The brief facts which are essential for the disposal of the Appeal are: The appellant filed O.S.No.54/2003 on 30.01.2003 against the second respondent for realisation of an amount of Rs.1,01,550/- with interest. The appellant obtained attachment before the judgment of the property of the 2nd defendant on 03.02.2003 as per order in I.A.No.700/2003. The suit was decreed in favour of the appellant as per the judgment and decree dated 31.10.2003. The appellant filed E.P.No.166/2005 EX.SA NO. 22 OF 2014 4 2025:KER:31976 for realisation of the decree debt. During the pendency of the Execution Petition, the first respondent filed E.A.No.1394/2007 praying to vacate the attachment over the plaint schedule property. The claim of the first respondent is that she purchased the property as per Ext.A1 Sale Certificate dated 18.02.205 from HSBC Bank, Vellayambalam, in the sale conducted by the Bank under the provisions of the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) when the loan granted to the second respondent was defaulted by him to the Bank.
3. As per the allegations in E.A.No.1394/2007, the 1st respondent/claim petitioner purchased 1.72 Ares of property from the Bank as per Ext.A1 Sale Certificate and for Rs.3,25,000/-. She affected the mutation of the property and paid tax in her name. There is no charge over the property as on the date of the decree. The court has specifically disallowed EX.SA NO. 22 OF 2014 5 2025:KER:31976 the prayer for creating charge over the decree schedule property. The first respondent is a bonafide purchaser of the decree schedule property for valid consideration from the secured creditor-HSBC Bank.
4. E.A.No.1394/2007 was allowed by the Execution Court as per the order dated 19.06.2013. Though the appellant/decree holder filed A.S.No.91/2013 before the First Appellate Court, the same was dismissed confirming the order of the Execution Court.
5. This Execution Second Appeal is admitted on the following substantial question of law:
(i) When it is not established that the first respondent/auction purchaser had right over the property under attachment on the date of attachment, can an application Order 21 Rule 58 of CPC be maintained?
EX.SA NO. 22 OF 2014 6 2025:KER:31976
6. After hearing the learned counsel on both sides, this Court formulated the following additional questions of law as per order dated 03.04.2025:
(ii) Whether there is perversity in the finding of the First Appellate Court that the petition schedule property was mortgaged in favour of HSBC Bank on 13.01.2003 i.e, before the attachment of the property by the decree holder, relying on Ext.X5 when there is no evidence before the court to enter such a finding?
(iii) Whether the Trial Court as well as the First Appellate Court were right in allowing the claim petition filed by the first respondent in the absence of any proof before the court that the alleged mortgage in favour of the secured creditor which sold the property to the first respondent is prior to the date of attachment?
7. Thereafter, the counsel on both sides were heard further.
8. The learned counsel for the appellant, Sri. T.M.Chandran, EX.SA NO. 22 OF 2014 7 2025:KER:31976 argued that, admittedly, the attachment order was passed on 03.02.2003 and the same was effected on 06.02.2003. There is no evidence before the court to prove that there was mortgage in favour of the secured creditor from whom the claim petitioner purchased the property before the date of attachment. The Trial Court, as well as the First Appellate Court, acted illegally in finding that the secured creditor Bank is having first charge over property without any evidence as to the date of mortgage before the court.
9. On the other hand, the learned counsel for the first respondent/claim petitioner contended that there is no substantial question of law that arise in the matter. The Trial Court, as well as the First Appellate Court, has entered a factual finding that there is a mortgage prior to the date of attachment in favour of the secured creditor. Admittedly, the property was purchased by the first respondent from the secured creditor in EX.SA NO. 22 OF 2014 8 2025:KER:31976 SARFAESI proceedings. When the property is purchased in court sale, it is free from any encumbrance or attachment. Learned counsel cited the decision of this Court in Francis @ Porinju V.Navodaya Kuries & Loans (P) Ltd and others [2010(3) KLT 609] to support this contention. The suit itself was a fraudulent one. As the averments in the plaint itself would reveal that the parties were acting in a hasty manner to obtain the decree. The suit was filed in the year 2003 and in 2003 itself the decree was passed. The said suit was instituted only to defeat the valid mortgage in favour of the secured creditor. There is fraud and collusion on the part of the plaintiff and the defendant in the suit. In order to prove the case of the claim petitioner, the claim petitioner has examined PW2, who produced Exts.X1 to X5 documents. It is revealed from those documents that the Loan Agreement was executed on 13.01.2003. The property was purchased, availing a loan from EX.SA NO. 22 OF 2014 9 2025:KER:31976 the secured creditor Bank. In such a case, the only probability is only that on the date of the loan agreement itself, the mortgage is created. In such case, the mortgage will prevail over the attachment, which is effected subsequently.
10. I have considered the rival contentions.
11. The attachment was admittedly ordered on 03.02.2003 and the same was effected on 06.02.2003. Both the Trial Court as well as First Appellate Court have found that the mortgage is prior to the date of attachment, and hence, the mortgage will prevail. The claim petitioner will succeed in the claim petition only if the claim petitioner proves that the mortgage is prior to the date of attachment. There is no pleading in E.A.No.1394/2007 as to the date of mortgage of the property by the second respondent in favour of the secured creditor - HSBC Bank. The pleadings do not even refer to the mortgage in favour of the secured creditor. For upholding the claim of the claim petitioner, it is to be found EX.SA NO. 22 OF 2014 10 2025:KER:31976 that the secured creditor was having a prior charge over the property. For finding prior charge in favour of the secured creditor, the date of mortgage is very much material. The said material date is absent in the pleading. The claim petitioner has not even pleaded that since the mortgage was prior to the date of attachment, the mortgage will prevail, and hence the sale effected by the mortgagee in favour of the first respondent would prevail over the attachment.
12. On going through the oral evidence of PW2 also, he also does not disclose the date of mortgage of the property in favour of the secured creditor. In Exts.X1 to X5 documents also, the date of mortgage of the property is not disclosed. On going through the list of documents shown in Ext.X4, Serial No.11 is original agreement No.236/2003 dated 14.01.2003. According to the learned counsel for the 1st respondent, it is the loan agreement executed by the judgment debtor with the secured creditor. EX.SA NO. 22 OF 2014 11 2025:KER:31976 Even assuming that the said document is the loan agreement, there is no indication that the property was mortgaged on that date. The mortgage itself could not be found as there is no document to prove the mortgage. The learned counsel for the appellant points out that the mortgage could not be done on 14.01.2003 since the title deed itself is dated 16.01.2003.
13. Since there is no pleading and evidence with respect to the date of the mortgage in the claim petition, the Trial Court, as well as the First Appellate Court acted illegally in finding that there is mortgage in favour of the secured creditor before the date of attachment. Such a finding is a perverse finding. It is liable to be interfered with.
14. The decision cited by the counsel for the 1 st respondent is not applicable as the property was sold not in court sale.
15. The learned counsel for the first respondent contended that there is clear fraud in the institution, conduct, and obtaining of EX.SA NO. 22 OF 2014 12 2025:KER:31976 the decree in the suit, and the question regarding the fraud is a matter to be agitated in separate proceedings. Of course, if he had got a case that those proceedings are fraudulent, he can take appropriate proceedings with respect to that.
16. On the other hand, the learned counsel for the appellant points out that the appellant also has a case that there is fraud and collusion between the Bank and the claim petitioner and the property with respect to which loan for Rs.9,90,000/- is given, was sold for a paltry sum of Rs.3,25,000/-, when the dues were more than Rs.10 lakh.
17. Anyway, with respect to the fraud alleged by either parties, it is not for this Court to comment on the alleged fraud committed by either of the parties. The only question before this Court is whether the claim petition is liable to be allowed or not.
18. In view of the aforesaid discussion, I answer the substantial question of law No.(i) in the negative and the additional question EX.SA NO. 22 OF 2014 13 2025:KER:31976 of law Nos.(ii) in the affirmative and No.(iii) in the negative; all in the favour of the appellant.
19. Accordingly, I allow the Execution Second Appeal without costs, dismissing E.A.No.1394/2007 filed by the first respondent in E.P.No.166/2005 in O.S.No.54/2003 on the files of the Additional Sub Court-II, Thiruvananthapuram.
Sd/-
M.A.ABDUL HAKHIM JUDGE Shg