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2017 DIGILAW 450 (KER)

P. M. THOMAS, PROPRIETOR, KUTTAN'S LAND v. CHIEF MANAGER, AUTHORISED OFFICER, STATE BANK OF TRAVANCORE

2017-03-02

K.VINOD CHANDRAN

body2017
JUDGMENT : The petitioners are aggrieved with the dismissal of a Securitisation Application by Ext.P17 order. The dismissal was on account of the fact that the appeal was not against the proceeding under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "SARFAESI Act" only). The Tribunal found that there was no appeal against such action taken under Section 13(4) and the petitioner was in fact challenging the quantum of debt payable by them towards the loan account. The Tribunal also found that under Section 17, only the validity of the acts of the secured creditor taking possession of the securities under Section 13(4) could be considered. The dismissal of the appeal is challenged in the writ petition. 2. In fact two loans were availed separately by the 1st petitioner and the 2nd petitioner respectively of Rs.3 lakhs and 3.9 lakhs on 01.09.2003 and 30.03.2006. The property having 6 cents belonging to the 1st petitioner was mortgaged to the Bank. There was also a residential building existing in the said property which building was one existing in the property belonging to the 1st petitioner and the 2nd petitioner; both having an extent of 6 cents. Only the property belonging to the 1st petitioner with the part of the building existing in the said property was mortgaged. 3. The learned Counsel for the petitioner would argue that to Ext.P1 notice issued under Section 13(2), the petitioners had filed Exts.P2 and P3 objections. On objections at Exts.P2 and P3 being not considered the petitioner was before this Court in W.P(C) No.2702/09, which was disposed of by Ext.P4. In Ext.P4 it was specifically noticed that any measure taken under Section 13(4) would be appealable under Section 17 of the SARFAESI Act. It was also noticed that the specific contention of the petitioner was that the rate of interest applied is contrary to the loan agreements and that the residential building which is notified under Section 13(2) notice is not part of the security interest. Leaving open all contentions, the petitioner was relegated to the alternate remedy. It was also observed that the petitioner could meet the 1st respondent and seek the result of the objection filed before the 1st respondent. 4. The objections filed were replied by Exts.P5 and P6. Leaving open all contentions, the petitioner was relegated to the alternate remedy. It was also observed that the petitioner could meet the 1st respondent and seek the result of the objection filed before the 1st respondent. 4. The objections filed were replied by Exts.P5 and P6. The petitioners challenged Exts.P5 and P6 before this Court in W.P(C) No.12476/2009, which was also dismissed leaving open the remedy of the petitioner under Section 17 of the Act, as per Ext.P7. The petitioner filed S.A No.591/2009 under Section 17 of the Act against Exts.P5 and P6 replies sent by the respondent Bank. There was also an interim order granted at Ext.P10. 5. In the meanwhile, the Bank approached the Chief Judicial Magistrate for taking possession of the property. The petitioner did not make any challenge there to. The petitioner merely produced the notice issued by the Commissioner in the S.A. Ext.P8, is the said notice, which was produced in the S.A. There was no amendment made and there was no challenge as such against the measures taken under Section 13(4). The conditions imposed by the DRT as per the interim order were complied with. Subsequently, the DRT heard the S.A and rejected it as per the impugned order. 6. It is pertinent that the petitioners had filed appeal from Ext.P5 and P6 orders. There was in fact no provision for filing an appeal from the reply of the creditor, to the objections filed under Section 13(2). A right to appeal arises only when a measure is taken under Section 13(4). The petitioner had not filed an appeal from the measures taken by the Bank under Section13(4). 7. The learned Counsel for the petitioner would contend that the contention raised by the petitioner in the S.A was that if the subsidy had been credited at the proper time, then the interest would not have accrued to the extent it accrued in the account and in such circumstance, the dues would not have been to the extent demanded. To buttress the above contention, reliance is also placed on Ext.P19 judgment. Ext.P19 considered the issue of computation of amounts which was said to be an issue maintainable in an appeal filed under Section 17. In any event, it is not a question of maintainability on computation alone which is urged in the above writ petition. To buttress the above contention, reliance is also placed on Ext.P19 judgment. Ext.P19 considered the issue of computation of amounts which was said to be an issue maintainable in an appeal filed under Section 17. In any event, it is not a question of maintainability on computation alone which is urged in the above writ petition. The question to be first decided is of maintainability of the appeal against a reply to the objections as issued by the creditor bank under Section 13(2) of the SARFAESI Act. 8. The specific provision under Section 17 is a remedy available for challenging the action taken under Section 13(4) of the Act and there could be no appeal against the reply to the objections filed by the petitioner. In such circumstance, this Court does not find any illegality in Ext.P17 order. Even now the possession of the property is said to be with the petitioners. The petitioners have also not responded to Ext.P16 (a) which is a One Time Settlement offered by the respondent Bank. In any event the measures have not culminated in possession, the petitioner would be entitled to take up the remedies under Section 17 as and when the respondent bank moves for taking possession of the property. 9. It is contended by the learned Counsel that in fact, Ext.P7 specifically relegated the petitioner to the remedy under Section 17 and conferred a right on the petitioner to move an appeal under Section 17 against the reply issued by the respondent Bank at Exts.P5 and P6. Immediately it is to be noticed that the High Court under Article 226 cannot be said to have conferred a jurisdiction which was not available in the statute. A reading of the judgment also does not seem to have entitled an appeal from Exts. P5 and P6. This Court on a writ petition filed against the rejection of the objection of the petitioner under Section 13 (3A) noticed the earlier judgment passed under Ext.P4 and found that already the petitioner was relegated to the appellate remedy. It was noticed that the earlier judgment specifically relegated the "remedy by way of an appeal under Section 17 of the Act against an order which may be passed against under Section 13(4) of the Act". Hence this Court found that any subsequent measure taken under Section 13(4) could be challenged in appeal. It was noticed that the earlier judgment specifically relegated the "remedy by way of an appeal under Section 17 of the Act against an order which may be passed against under Section 13(4) of the Act". Hence this Court found that any subsequent measure taken under Section 13(4) could be challenged in appeal. The petitioner having rushed to the DRT against Exts.P5 and P6 wrongly construed the directions in Ext.P6. 9. In any event, the remedy is still available when the respondents attempt a possession under Section 13(4) but the dismissal of the writ petition need not be taken as having upheld the order of the DRT with respect to declining consideration of the computation in a proceeding under Section 17. That issue will be left open. Original petition is dismissed with the above liberty.