Bhanumathy Usha, Thoppil Veedu, Attipra, Thiruvananthapuram v. Jammu & Kashmir Bank Ltd
2020-03-05
RAJA VIJAYARAGHAVAN V.
body2020
DigiLaw.ai
JUDGMENT : Being faced with proceedings under Section 14 of the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short), initiated by the 1st respondent before the Chief Judicial Magistrate, Thiruvananthapuram, against the properties of the petitioners, they are before this Court seeking the following relief’s:- “(i) to issue a writ of mandamus or such other writ, order or direction to the respondents 1 and 2 not to proceed against the properties of the petitioners which is not a secured asset of the 1st respondent bank for the debts due from the third respondent. (ii) to issue a writ of certiorari or such other writ, order or direction quashing all proceedings pursuant to Exhibit P1 pending before the Chief Judicial Magistrate Court, Thriruvananthapuram, finding that the property sought to be taken possession is not a secured asset of the 1st respondent. (iii) to direct the Chief Judicial Magistrate Court, Thiruvananthapuram to receive Ext.P9 to its file and to consider and dispose the same on merits and to decide the question whether the property sought to be taken possession by the first respondent is a secured asset which can be proceeded against for the debts due from the third respondent.” 2. The eventful factual backdrop is outlined by the available pleadings. It would portray that the petitioners herein and the 4th respondent are siblings and they are the children of Smt.Janaky Banumathy, who died intestate in the year 1998. Bhanumathy owned several parcels of land and buildings in her name which included property having an extent of 8.5 cents comprised in Sy. No 93/14-1 of Attipra Village. After the death of the mother, a suit for partition was instituted by the 1st petitioner arraying the rest of the sharers as defendants before the Additional Munsiff Court, Thiruvananthapuram as O.S. No.139 of 2000. By judgment dated 30.06.2004, a copy of which is produced as Exhibit P2, a preliminary decree was passed holding that the 1st petitioner was entitled to 1/5th share out of the 8 ½ cents of land comprised in Sy.No 93/14-1 of Attipra Village and that she was held entitled to separate possession of the same. On 31.5.2005, a supplementary decree was passed in favour of petitioners 2 and 4 in respect of their 1/5th share over the same item of property.
On 31.5.2005, a supplementary decree was passed in favour of petitioners 2 and 4 in respect of their 1/5th share over the same item of property. It is pertinent to note that during the pendency of the suit, the learned Munsiff, on an application filed by the plaintiff, had passed an order of injunction restraining the defendant/the 4th respondent herein from creating any charge or from making any construction in the property. As is evident from Exhibit P4 report of the Commissioner Advocate, who was appointed by the Civil Court to separate the property by metes and bounds, the 4th respondent had right only over 1 cent of property, left over as her share. Later, final decree was passed in accordance with the preliminary decree and the same has become final. 3. After the preliminary decree was passed, the 4th respondent, by Exhibit P5 document dated 11.02.2005 assigned 2.62 Ares comprised in Sy.No.93/14/1 of Attipra Village to the 3rd respondent and in clear violation of the order of injunction and also the terms of the preliminary decree. Unquestionably, the 4th respondent had no right to assign the entire property as she only had a fractional interest on the date of assignment. 4. After purchase of property as aforesaid, the 3rd respondent mortgaged the aforesaid 6.470 cents of land with the 1st respondent bank after entering into a security agreement and obtained a loan of Rs.3.5 Lakhs on 7.03.2006. 5. While so, when the petitioner and the other sharers exercised their rights over the property pursuant to the judgment of the Civil Court, the 3rd respondent approached the Munsiff Court, Thiruvananthapuram and filed a suit for injunction as O.S. No 1436 of 2006 seeking to restrain the petitioner and others from trespassing into the plaint scheduled property or from interfering with his peaceful possession and enjoyment. The learned Munsiff dismissed his application finding that the 3rd respondent had suppressed material facts and further holding that in view of the principle of lis pendens, the 3rd respondent could not have acquired any rights over the property. 6.
The learned Munsiff dismissed his application finding that the 3rd respondent had suppressed material facts and further holding that in view of the principle of lis pendens, the 3rd respondent could not have acquired any rights over the property. 6. The 3rd respondent preferred C.M.A.No.36 of 2008 before the District Court, Thiruvananthapuram and by judgment dated 25.7.2008 in C.M.A.No.36 of 2008, the District court came to the following findings, which has become final: (a) the 3rd respondent had purchased the property after the preliminary decree was passed; (b) There were no documents to show that the 3rd respondent had obtained possession of the property pursuant to the sale deed executed in the year 2005 (c) The transaction is hit by the principle of lis pendens ; and (d) Material facts had been suppressed by the 3rd respondent while approaching the court. 7. What happened thereafter is what led to the institution of this petition. 8. The 3rd respondent committed default and the Bank initiated proceedings under the SARFAESI Act. When the 3rd respondent refused to respond to the notice issued under Section 13(2) of the Act, the bank approached the learned Chief Judicial Magistrate and filed an application seeking assistance in taking possession of the secured asset. They also affixed a notice intimating the taking over of possession of the property in the outer door of the building. On such affixture being made, the petitioner through her counsel issued Exhibit P6 letter to the 1st respondent intimating him of the judgment rendered by the Civil Court and also the actual state of affairs and requested the bank to refrain from proceeding against the said property. They also approached the Chief Judicial Magistrate and filed an application seeking intervention. It is thereafter that they have approached this Court seeking the above prayers. 9. The 1st respondent has filed a counter affidavit refuting the submissions. It is contended that the Writ Petition is not maintainable as the petitioner had an alternate remedy in approaching the Debt Recovery Tribunal in view of Section 34 of the SARFAESI Act. It is submitted that the 3rd respondent had availed a loan by mortgaging the subject matter property. The 1st respondent had to approach the learned Magistrate to get physical possession of the property and it was at that juncture that this Writ Petition was filed and an interim order was passed by this Court.
It is submitted that the 3rd respondent had availed a loan by mortgaging the subject matter property. The 1st respondent had to approach the learned Magistrate to get physical possession of the property and it was at that juncture that this Writ Petition was filed and an interim order was passed by this Court. It is contended that the 1st respondent is unaware of the suit instituted by the petitioner, and the findings therein will not bind the secured creditor. 10. Though notice was issued to the respondents, the same was returned with an endorsement “present address not known” and “addressee left” respectively. Later, the petitioner was permitted to take out notice by paper publication and the same was effected. There is no appearance for respondents 3 and 4. 11. Sri.J. Harikumar, the learned counsel appearing for the petitioner, submitted that Exhibit P1 sale deed executed by the 4th respondent in favour of the 3rd respondent was on 11.02.2005. The suit for partition was instituted by the 1st petitioner in the year 2000 and there was an order of injunction against the 3rd respondent from creating any charge or any encumbrance over the property. This fact is evident from Ext. P10 judgment. If that be the case, the deed of assignment executed by the 4th respondent in favor of the 3rd respondent is hit by the principles of lis pendens. It is further submitted that the 3rd respondent had approached the Civil Court seeking to enforce his right over the property and the same was rejected finding that he had no authority or right over the same. If that be the case, the property against which SARFAESI proceedings have been initiated cannot be regarded as a “secured asset” and the petitioners can very well maintain this writ petition for the initiation of proceedings against their property is illegal. According to the learned counsel, the action against property owned by the petitioners, disregarding the judgments rendered by the Civil Courts, can only be regarded as absurd and untenable and hence this Court can well exercise its powers under Article 226 of the Constitution of India and quash all proceedings without relegating the petitioner to the statutory remedy. 12. Heard the learned Standing counsel appearing for the respondent who reiterated the contentions in the counter affidavit. 13. I have considered the submissions.
12. Heard the learned Standing counsel appearing for the respondent who reiterated the contentions in the counter affidavit. 13. I have considered the submissions. It is undisputed that a suit for partition was instituted by the 1st petitioner arraying her siblings as respondents in respect of property having an extent of 2.62 Ares comprised in Sy.No 93/14/1 of Attipra Village and a preliminary decree was passed on 30.6.2004. It is also undisputed that there was an order of injunction restraining the 4th respondent from creating any charge in respect of the property or from making any construction therein. If that be the case, the 4th respondent could not have executed a deed of assignment in respect of the aforesaid property, pending the suit, in favor of the 3rd respondent. As held by the Hon'ble Supreme Court in Rajendar Singh V Santa Singh, AIR 1973 SC 2537 , the doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject matter of litigation from the ambit of the court's power to decide a pending dispute of frustrate its decree. Alienees acquiring any immovable property during a litigation over it are held to be bound, by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights over immovable property which are the subject matter of a litigation, to the power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated. Much deliberation is not required to conclude that the execution of sale deed in the year 2005 is squarely hit by the principles of lis pendens and the 3rd respondent cannot be heard to contend that he, not being a party to the suit, is not bound by the decree. Furthermore, I also find that the application for injunction filed by the 3rd respondent was dismissed by the learned Munsiff holding that the 3rd respondent had not acquired cause of action to seek such a prayer as he had approached the Court with unclean hands.
Furthermore, I also find that the application for injunction filed by the 3rd respondent was dismissed by the learned Munsiff holding that the 3rd respondent had not acquired cause of action to seek such a prayer as he had approached the Court with unclean hands. While upholding the order of the learned Munsiff, the District Court held that the principles of lis pendens will clearly apply. 14. Now the question is whether, in view of the above, the petitioner can be pinned down to the remedies under the SARFAESI Act. This Court had entertained the Writ petition and an interim order was granted in favor of the petitioner on 13.06.2011. As held by this Court in Babu T.V. v Calicut Co-operative Urban Bank and Ors. 2018 (5) KHC 345 , it would be highly inequitable to dismiss a long pending case on the plea of an alternate remedy being available. 15. Even otherwise, a Division Bench of this Court in Elamma and Others v Kaduthuruthy Urban Co-Operative Bank Ltd and Others, 2018 (5) KHC 701 have held that the bar of the Civil Court under Section 34 of the SARFAESI Act is obviously in relation to a matter which the Debt Recovery Tribunal can determine in respect of any action taken under the SARFAESI Act. It was held that a person cannot be pinned down to the remedies under the SARFAESI Act when he asserts that the property is not a secured asset. In the case on hand, the rights of the petitioners have been crystallized in their favor even prior to the execution of the assignment deed in favor of the 3rd respondent in the year 2005. If that be the case, much deliberation is not required to hold that the property which is the subject matter of the Suit could not be categorized as a secured asset except insofar as it concerns the 1/5th right obtained by the th respondent as per the decree. 16. For the aforesaid reasons, I am of the considered opinion that the petitioners are entitled to succeed. It is held that the 1st respondent is not entitled to proceed against the properties covered under Exhibit P2 judgment and allotted to the petitioners as is evident from the Exhibit P4 report of the Advocate Commissioner.
16. For the aforesaid reasons, I am of the considered opinion that the petitioners are entitled to succeed. It is held that the 1st respondent is not entitled to proceed against the properties covered under Exhibit P2 judgment and allotted to the petitioners as is evident from the Exhibit P4 report of the Advocate Commissioner. It is made clear that the 1st respondent may proceed against that part of the property which has been allotted to the share of the 4th respondent, the rights of which would have been acquired by the 3rd respondent. Exhibit P1 pending before the learned Magistrate will stand quashed. This Writ Petition will stand allowed. Parties are directed to suffer their costs.