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2013 DIGILAW 559 (MAD)

T. R. Murugan v. Housing and Urban Development Corporation Ltd. , (HUDCO), rep. by its Chairman and Managing Director

2013-01-24

CHITRA VENKATARAMAN, R.KARUPPIAH

body2013
Judgment Chitra Venkataraman, J. 1. The petitioners herein are the sons of one T.V. Ranganathan and one Buvaneswari, who is now represented by the Official Assignee – the second respondent herein, impleaded as per the orders of this Court on 13.7.2012 in M.P.No.2 of 2012, on account of the said Buvaneswari being declared as insolvent by this Court. 2. It is stated that T.V. Ranganathan entered one sale agreement with one C.S. Kannan as early as 1996 for joint promotion of the property. The said Ranganathan approached the respondent Corporation for credit facility and the same was sanctioned on 23.9.1997. It is further stated that T.V. Ranganathan passed away on 5.9.1998, leaving behind the petitioners herein and the said Buvaneswari. It is also stated that after the death of T.V. Ranganathan, Buvaneswari was adjudicated as an insolvent in I.P.No.134 of 2002 as early as 3.3.2003. It is further stated that C.S. Kannan – the original owner of the property died as early as sometime in 2003. 3. It is now stated that as per the death certificate issued, the said T.V. Ranganathan died as early as 2001. In view of the default committed by the partnership firm constituted with the petitioners and their mother as partners, the first respondent – Corporation filed an application before the Debts Recovery Tribunal. It is a matter of record that the property to be developed was mortgaged with the first respondent – Corporation along with the building constructed thereon and the original title deeds deposited with the first respondent – Corporation. It is further seen that the petitioners and their mother executed a personal guarantee in their capacity as partners of the firm T.L.V. Builders. In the background of the security thus offered, the first respondent – Corporation proceeded with the proceedings under the SARFAESI Act. In the meantime, the flats constructed were sold to 26 persons and they were also impleaded in the proceedings under the SARFAESI Act. 4. Considering the above fact that the said C.S. Kannan, who was the fifth respondent in the SARFAESI application before the Debts Recovery Tribunal, had already expired and the said Buvaneswari having suffered a civil death on account of being declared as insolvent, the petitioners filed an application for impleading the Official Assignee on behalf of the said Buvaneswari and also to bring on record the legal heirs of the deceased C.S. Kannan. On 27.2.2012, the Tribunal directed the first respondent for filing necessary application to implead all the legal heirs as well as to bring in the Official Assignee for representing the estate of the insolvent. 5. On 4.4.2012, the first respondent Corporation was not ready to implead the Official Assignee appointed by this Court in I.P.Nos.77 and 134 of 2002. Even though the first respondent Corporation was informed on 27.2.2012 about the death of C.S. Kannan, no measures were taken to implead the legal heirs. In the circumstances, the matter stood adjourned to 18.6.2012, but considering the fact that the possession notice was issued on 30.5.2012 in the name of dead person as well as in the name of Buvaneswari, who needs to be represented only by the Official Assignee, the present writ petition has been filed for quashing the notice under Section 13(4) of the SARFAESI Act. 6. Learned counsel for the petitioners placed before this Court the copy of the death certificate indicating the death of C.S. Kannan as early as 10.2.2001. Considering the fact that there is no impleading of the legal heirs of the said C.S. Kannan, whose property was the subject matter of mortgage, the proceedings thus initiated against the dead person is totally illegal and void ab initio. 7. In this connection, he placed reliance on the decision in the case of Sheeba Philominal Merlin and another Vs. The Repatriates Co. op. Finance and Development Bank Ltd. (Govt. of India Enterprise) and others (reported in 2010 (4) LW 497 ) as well as the decision in W.P. No.27230 of 2009 dated 1.12.2010 (S. Suhaina Banu and others Vs. Indian Bank, ARM Branch rep. by its Chief Manager and Authorised Officer and Others) and contended that after the demise of the borrower, the possession notice has to be delivered to the legal heirs. When the notice was affixed showing the name of the dead person alone, the same is ab initio void. Thus, in the absence of proper representation on behalf of the estate of the dead person – C.S. Kannan, and the estate of the insolvent represented by the Official Assignee, the proceedings are invalid. 8. As far as the first respondent Corporation is concerned, they filed a counter affidavit herein stating that they were not aware of the death of C.S. Kannan. 8. As far as the first respondent Corporation is concerned, they filed a counter affidavit herein stating that they were not aware of the death of C.S. Kannan. It is further stated that in any event, it is upto the petitioners to substantiate by acceptable documentary evidence as regards the legal heirs of the said C.S. Kannan andin such circumstances, no fault could be laid on the first respondent Corporation in this aspect. It is further stated that based on the project report of the builder, the first respondent bank had advanced project loan for the construction of flats, which had come into existence. Consequently, the notice issued is legally justifiable. The partners are jointly and severally responsible to repay the loan along with the land owner, who is a mortgagor. It is further stated that the matter has been pending before the Debts Recovery Tribunal for more than 12 years and the petitioners are now before this Court adopting delaying tactics. In fact, there is an effective alternative remedy available to the petitioners to challenge the notice issued under Section 13(4) of the SARFAESI Act. Therefore, the writ petition is not maintainable. 9. We do not think that the availability of alternative remedy should stand in the way of this Court considering the merits of the writ petition, particularly when the fact as regards the declaration of insolvency of one of the partners, namely Buvaneswari is not in dispute. It is not in dispute that there is a dissolution of partnership. It is also not denied that the mortgagor – C.S. Kannan is no longer available for service in accordance with the provisions of the SARFAESI Act. Thus, when the factum of death of C.S. Kannan is very much known to the first respondent bank as well as the death of one of the partners of the construction company, the proper course herein would be to issue proper notice in accordance with law reflecting the correct state of affairs. 10. It is now stated by the learned counsel for the first respondent Corporation as well as the petitioners that after impleading of the Official Assignee to represent the estate of Buvaneswari before this Court on 13.7.2012, the first respondent has taken steps to implead the Official Assignee to represent the estate of Buvaneswari in the proceedings under the SARFAESI Act. It is now stated by the learned counsel for the first respondent Corporation as well as the petitioners that after impleading of the Official Assignee to represent the estate of Buvaneswari before this Court on 13.7.2012, the first respondent has taken steps to implead the Official Assignee to represent the estate of Buvaneswari in the proceedings under the SARFAESI Act. As far as the legal heirs of the deceased C.S. Kannan is concerned, considering the fact that the first respondent Corporation is now given necessary particulars regarding the death of C.S. Kannan through the certificate of death issued by the Sub-Registrar, Ganganagar, Bangalore and the details of one of the legal heirs is also available with the first respondent Corporation, the proper course herein would be to issue fresh notice indicating the legal heirs to represent the estate of the deceased mortgagor C.S. Kannan and the Official Assignee in accordance with law and proceed further in this regard. 11. Following the decisions of this Court cited above, we have no hesitation in setting aside the order of the Tribunal. In the circumstances, the writ petition is allowed. It is open to the first respondent Corporation to issue fresh notice of possession in accordance with law reflecting the correct names of persons against whom notice has to be served. No costs. Consequently, the above MP is closed.