(2013) 307 KLR 286 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH MONDAY, THE 3RD DAY OF JUNE 2013/13TH JYAISHTA 1935 WP(C).No. 13724 of 2013 (M) ---------------------------- PETITIONER(S): -------------------------- S.ANILKUMAR, MANAGING PARTNER, WE ONE TILE, ANIL SADAN LAKSHIMI HOUSING COLONY, BEHIND K.T.C, KANJIKODE PALAKKAD. BY ADVS.SRI.SAJEEV KUMAR K.GOPAL SRI.R.HARISHANKAR RESPONDENT(S): ---------------------------- 1. THE CATHOLIC SYRIAN BANK LIMITED, KANJIKODE BRANCH, KANJIKODE, PALAKKAD - 678 020 REPRESENTED BY ITS MANAGER. 2. THE DEPUTY ZONAL MANAGER AND AUTHORISED OFFICER, THE CATHOLIC SYRIAN BANK LIMITED, ZONAL OFFICE KOZHIKODE - 673 001. BY SRI.JACOB SEBASTIAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03-06-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 13724 of 2013 (M) APPENDIX PETITIONER(S)' EXHIBITS
RESPONDENT(S)' EXHIBITS : NIL /TRUE COPY/ P.A. TO JUDGE. "C.R." V.CHITAMBARESH, J. ------------------------------- W.P (C) No.13724 of 2013 ------------------------------- Dated this the 3rd day of June, 2013 Head Note:- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(4) - Civil Procedure Code, 1908 - Order 21 Rule 64 - Should all the items of property offered as security interest be put to sale under the SARFAESI Act even if a sale of few of the items would be sufficient to satisfy the debt due to the Bank ? Held:- It may be true that the provisions of Order XXI Rule 64 of the Civil Procedure Code, 1908 would not ipso facto apply to the sale under the SARFAESI Act. But it is quite rationale to suggest that only such of the property as is necessary to satisfy the debt need be sold even under the SARFAESI Act. This is particularly so since there is nothing inconsistent in that regard in the SARFAESI Act under which the sale is proposed to be conducted by the Bank. The provisions of the SARFAESI Act have an over riding effect only if the same are inconsistent with any other law for the time being in force. J U D G M E N T Should all the items of property offered as security interest be put to sale under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the SARFAESI Act' for short) even if a sale of few of the items would be sufficient to satisfy the debt due to the Bank ? 2. Item Nos. 1 and 2 property offered as security interest belongs to the partnership firm and item Nos.3 and 4 property offered as security interest to the Bank are the personal property of the partners. The petitioner who is the Managing Partner of the firm contends that only such of the items of property as are necessary to satisfy the debt need be sold by the Bank under the SARFAESI Act. The Bank on the other hand points out that such principles under Order XXI Rule 64 of the Code of Civil Procedure, 1908 cannot be imported to the sale under the SARFAESI Act. 3. I heard Mr.R.Harishankar, Advocate on behalf of the petitioner and Mr. Jacob Sebastian, Advocate on behalf of the Bank. 4. Item No.1 property is one allotted to the partnership firm by the Industries Department of the State under executive orders issued for allotment of land ear marked in industrial area. The land belongs to the Industries Department who have even a right to resume possession of the same in case the allottee commits default in running the industrial unit as per the terms of the grant. The petitioner has no alienable interest over the land and the Bank may at best have a right to proceed against the structures and machineries therein in enforcement of the security interest. Therefore it is not possible to direct item No.1 property to be sold first before selling Item Nos. 2 to 4 property under the SARFAESI Act by the authorised officer of the Bank as contended by the petitioner. 5. But equitable relief can certainly be extended to the petitioner in regard to Item Nos.2 to 4 property in regard to the sale under the SARFAESI Act and hence the following directions are issued: (i) Item No.3 property shall be sold if the sale proceeds of item No.2 property are insufficient to satisfy the debt. (ii) Similarly item No.4 property shall be sold if the sale proceeds of Item Nos. 2 and 3 property are insufficient to satisfy the debt. (iii) The structures and machineries in item No.1 property shall be sold if the sale proceeds of item Nos.2, 3 and 4 property are insufficient to satisfy the debt. (iv) But all the items of property shall be put to sale on the same date and venue and the sale can proceed item wise as indicated above. 6. It may be true that the provisions of Order XXI Rule 64 of the Civil Procedure Code, 1908 would not ipso facto apply to the sale under the SARFAESI Act. But it is quite rationale to suggest that only such of the property as is necessary to satisfy the debt need be sold even under the SARFAESI Act. This is particularly so since there is nothing inconsistent in that regard in the SARFAESI Act under which the sale is proposed to be conducted by the Bank. The provisions of the SARFAESI Act have an over riding effect only if the same are inconsistent with any other law for the time being in force. This is clear from Section 35 of the SARFAESI Act which reads as follows:- 35. The Provisions of this Act to override other laws - The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. 7. It is reported that the Bank has already taken symbolic possession of all the four items of property and that the petitioner is residing with his family in item No. 4 property which is a residential house. I therefore direct that the petitioner and his family shall be physically dispossessed from Item No.4 property only if there is a necessity to sell the same after proceeding against Item Nos.2 and 3 property. The Writ Petition is disposed of. No costs. V.CHITAMBARESH, Judge. nj. |