Babu C. G. , S/o. Gangadharan v. The South Indian Bank Ltd
2019-08-21
ANIL K.NARENDRAN, HRISHIKESH ROY
body2019
DigiLaw.ai
JUDGMENT : HRISHIKESH ROY, J. 1. Heard Sri. Praveen K. Joy, learned counsel for the appellants/writ petitioner. Sri. K. K. Chandran Pillai, the learned senior counsel appears for the South Indian Bank. 2. The appellant was a partner of M/s. Catrix Luminants & Solar Systems. The said Firm secured loan from the 1st respondent Bank. When the loan repayment could not be made by the borrowers, the Bank initiated recovery proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act [hereinafter referred to as “SARFAESI Act”]. 3. Faced with the Bank's two notices for possession issued on 01.11.2017 (for the property in the resurvey No. 20/6 in the Kannambara II village of Alathur taluk and in respect of the property in the Re. Survey No. 47/6 of Vadakkencherry I village in Alathur taluk), earlier, the W.P.(C) No. 35471 of 2017 was filed by the same litigant. In that proceedings, the prayer of the borrower was to permit him to remit the outstanding loan dues, in easy installments. Accepting the said proposition of the borrower, the learned Judge disposed of the W.P.(C) No. 35471/2017 on 29.11.2017, with the following directions: “................................................................................................... (i) The total amount outstanding from the petitioner to the respondent bank, is stated to be Rs.7,18,00,000/-. Accordingly, if the petitioner pays the aforesaid amount of Rs.7,18,00,000/-together with accrued interest and other charges in 15 equal and successive monthly instalments commencing from 11.12.2017, the recovery steps initiated against the petitioner by the respondent bank shall be kept in abeyance. (ii) It is made clear that, if the petitioner commits a default in respect of any of the instalments, he will lose the benefit of this judgment and the respondent bank will be free to continue the recovery proceedings against him from the stage at which they presently stand. (iii) The respondent bank shall furnish the petitioner with an up-to-date statement, of the dues position together with interest, within ten days from today so as to enable the petitioner to discharge the liability in accordance with the directions in this judgment. …..................................................................................................” 4. As it appears, the borrower failed to repay the loan dues in terms of the above installment facility granted in the W.P.(C) No. 35471/2017. For such default, the bank resumed the recovery proceedings under the SARFAESI Act, as was permitted by the Court in its judgment in the W.P.(C) No. 35471/2017. 5.
…..................................................................................................” 4. As it appears, the borrower failed to repay the loan dues in terms of the above installment facility granted in the W.P.(C) No. 35471/2017. For such default, the bank resumed the recovery proceedings under the SARFAESI Act, as was permitted by the Court in its judgment in the W.P.(C) No. 35471/2017. 5. Facing the above and the imminent dispossession of the secured assets, the 2nd writ petition, i.e., W.P.(C) No. 41567/2018 was filed by the borrower with prayer for restraining the bank from taking forceful possession of the residential property of the petitioner, comprised in the resurvey No. 20/6 of Kannambara II village and the movie theater comprised in the resurvey No. 46/6 of Vadakkencherry village, of Alathur Taluk. 6. In the 2nd Writ Petition, the litigant did not disclose the earlier case and the installment accommodation granted to him, in the W.P.(C) No.35471/2017. The suppression was brought to the Court's notice by the Bank's lawyer. Even then, borrower asserted emphatically that he will pay off the entire loan liability without fail by 31.01.2019 and in order to convince the bank and the Court of his bonafide, he made an unilateral offer to surrender the key of secured asset the very next day i.e. on 01.02.2019, if he fails to pay off the loan dues. 7. The Court showed indulgence to the borrower by allowing him to wipe off the loan liability within a short period. The learned Judge directed that the writ petitioner will pay off entire outstanding [Rs.7.3 crore as on 20.12.2018] along with applicable charges and interest, on or before 31.01.2019. In turn, the Bank was directed not to take any action under the SARFAESI Act until 01.02.2019. It was however made clear that if the borrower fails to make the payment as ordered, he shall surrender the key of the secured assets on 1.2.2019, to the Vadakkencherry Branch of the South Indian Bank. The litigant was additionally cautioned that if fails to make the payment and does not surrender the key as ordered, he will be visited with full consequences under the Contempt of Court Act. 8. The appellant's lawyer Sri. Praveen K. Joy concedes that the borrower did not make any payment towards the outstanding due of Rs.7.3 crore, within 31.01.2019. 9.
The litigant was additionally cautioned that if fails to make the payment and does not surrender the key as ordered, he will be visited with full consequences under the Contempt of Court Act. 8. The appellant's lawyer Sri. Praveen K. Joy concedes that the borrower did not make any payment towards the outstanding due of Rs.7.3 crore, within 31.01.2019. 9. In the meantime, on the SARFAESI proceedings the Chief Judicial Magistrate Court, Palakkad had passed an order on 25.05.2019 in the M.C. No. 72/2019 under Section 14 of the SARFAESI Act. This was challenged by the borrower through the S.L.P. No. 19686/2019 in Supreme Court. He questioned the validity of the proceedings of the Chief Judicial Magistrate, contending that the Statute authorises only the Chief Metropolitian Magistrate to initiate the proceedings under Section 14 and not a Chief Judicial Magistrate in a non-metropolitan area. Entertaining the SLP, the Supreme Court issued notice on 20.08.2019 and in the meantime ordered for maintenance of status quo on the suit property by the parties. Thus the mortgaged asset of the borrower is currently protected by the said status quo order of the Supreme Court. 10. In the present, we are concerned with the much delayed Writ Appeal filed on 16.08.2019. As earlier noted, the appellant was required to remit the dues on or before 31.01.2019. In his 2nd case, i.e., the W.P.(C) No. 41567/2018, the appellant/ petitioner failed to disclose the installment facility granted earlier in the W.P.(C) No. 35471/2017 and he suppressed the fact that he could not make any such payment, in terms of the judgment dated 29.11.2017. 11. On the suppression issue, we may refer to Chapter XI of the Rules of High Court Kerala, 1971 and most pertinently the Rule 146 thereon. In the writ petitions filed in the High Court, the litigant is obligated to disclose whether he had filed any earlier writ petition seeking similar reliefs in respect of the same subject matter and if so, the relief in the earlier case. Here the writ petitioner not only suppressed the earlier proceedings but also made an audacious and false assertion in the affidavit filed in support of the W.P.(C) No. 41567/2018. In paragraph 3 of the affidavit he averred on oath that “I have not filed any earlier petition seeking similar and identical relief in respect of the same subject matter.
Here the writ petitioner not only suppressed the earlier proceedings but also made an audacious and false assertion in the affidavit filed in support of the W.P.(C) No. 41567/2018. In paragraph 3 of the affidavit he averred on oath that “I have not filed any earlier petition seeking similar and identical relief in respect of the same subject matter. The averment in the Writ Petition may be read as part of this Affidavit.” 12. The above would show that the litigant took recourse to sharp practice to claim equitable relief from the High Court. According to us, it is a clear case of not only suppression but also a case of an attempt to mislead the Court. The violation of the requirement of Rule 146 of the Rules of High Court of Kerala is clearly discernible in the conduct of the litigant. The appellant, as noted above, has already secured an interim order on 20.08.2019 from the Supreme Court in the SLP No. 19686/2019. We are left wondering whether the said order has also been obtained from the Supreme Court, by suppression of all necessary facts. 13. Focusing now on the present appeal, since the appellant has failed to remit the loan dues despite his assurance and the time for repayment has expired seven months before, on 31.01.2019, and the Writ Appeal was belatedly filed only on 13.08.2019, we feel that no further indulgence should be shown to such a litigant. It is well settled that those who claim equitable relief must approach the Court with clean hands and should not suppress any material facts. 14. As stated by Scrutton, L.J., in R. v. Kensington Income Tax Commissioners [1917 (1) KB 486] an applicant who does not come with candid facts and 'clean breast' cannot hold a writ of the Court with 'soiled hands'. Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, maneuvering or misrepresentation, which has no place in equitable and prerogative jurisdiction. 15. In Prestige Lights Limited v. State Bank of India [ (2007) 8 SCC 449 ] the Apex Court reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a Writ Court will indeed bear in mind the conduct of the party who is invoking such jurisdiction.
15. In Prestige Lights Limited v. State Bank of India [ (2007) 8 SCC 449 ] the Apex Court reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a Writ Court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the Court, the Court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of Court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the Writ Courts would become impossible. The Apex Court held further that, under Art.226 of the Constitution of India, the High Court is exercising discretionary and extraordinary jurisdiction. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 16. In K.D.Sharma v. Steel Authority of India Ltd.[(2008) 12 SCC 481] the Apex Court held that the party who invokes the extraordinary jurisdiction of the Apex Court under Art.32 or of a High Court under Art.226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts without any reservation even if they are against him. He cannot be allowed to play 'hide and seek' or to 'pick and choose' the facts he likes to disclose and to suppress (keep back) or not to disclose (conceal) other facts. The very basis of the writ jurisdiction rests in disclosure of true and complete (correct) facts. If material facts are suppressed or distorted, the very functioning of Writ Courts and exercise would become impossible. The petitioner must disclose all the facts having a bearing on the relief sought without any qualification.
The very basis of the writ jurisdiction rests in disclosure of true and complete (correct) facts. If material facts are suppressed or distorted, the very functioning of Writ Courts and exercise would become impossible. The petitioner must disclose all the facts having a bearing on the relief sought without any qualification. This is because, "the Court knows law but not facts". In the said decision, the Apex Court held further that, if the primary object as highlighted in R.v. Kensington Income Tax Commissioners [1917 (1) KB 486] is kept in mind, an applicant who does not come with candid facts and 'clean breast' cannot hold a writ of the Court with 'soiled hands'. Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, maneuvering or misrepresentation, which has no place in equitable and prerogative jurisdiction. If the applicant does not disclose all the material facts fairly and truly but states them in a distorted manner and misleads the Court, the Court has inherent power in order to protect itself and to prevent an abuse of its process to discharge the rule nisi and refuse to proceed further with the examination of the case on merits. If the Court does not reject the petition on that ground, the Court would be failing in its duty. In fact, such an applicant requires to be dealt with for Contempt of Court for abusing the process of the Court. 17. Therefore, it is well settled that, a litigant who invokes the extraordinary jurisdiction of this Court under Art.226 of the Constitution must come with clean hands and clean objects. The judicial proceedings are sacrosanct, and no person would be allowed to abuse the judicial process, particularly, in public law remedy. In writ proceedings, the Court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has been asserted. Since Art.226 of the Constitution of India espouses equity jurisprudence, a litigant who has approached the Court with unclean hands, without disclosing full facts, is not entitled for any reliefs 18. In view of the foregoing, this appeal is not entertained and is dismissed. Since the litigant had obtained equitable relief from the writ court through suppression and misrepresentation, we deem it appropriate to impose cost of Rs.25,000/-[Rupees Twenty Five thousand only] on the appellant.
In view of the foregoing, this appeal is not entertained and is dismissed. Since the litigant had obtained equitable relief from the writ court through suppression and misrepresentation, we deem it appropriate to impose cost of Rs.25,000/-[Rupees Twenty Five thousand only] on the appellant. The cost amount be remitted to the High Court Legal Services Authority within two weeks failing which steps for revenue recovery be initiated. It is ordered accordingly.