Markose Kuzhalanattu vs. The Authorised Officer - Kerala High Court, 13 January 2023

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 13TH DAY OF JANUARY 2023 / 23RD POUSHA, 1944 WP(C) NO. 1131 OF 2023 PETITIONER: MARKOSE KUZHALANATTU AGED 52 YEARS KUZHALANATTU HOUSE MANNATHOOR HOUSE P.O,PAMPAKUDA,MUVATTUPUZHA,ERNAKULAM, PIN - 686723 BY ADVS. PRAVEEN.H. K.S.SMITHA AMAL DEV D T.T.SHANIBA NIKITA NAIR C.S. REVATHI P.M. RESPONDENTS: 1 THE AUTHORISED OFFICER THE FEDERAL BANK LTD KOOTHATTUKULAM BRANCH, STATIONED AT LCRD,FEDERAL TOWERS,MARINE DRIVE,ERNAKULAM-682031, PIN - 682031 2 THE FEDERAL BANK LIMITED KOOTHATTUKULAM BRANCH, STATIONED AT LCRD, FEDERAL TOWERS,MARINE DRIVE-682031,REPRESENTED BY ITS AUTHORIZED OFFICER, PIN - 682031 OTHER PRESENT: ADV. P PAULOCHAN ANTONY (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P. (C) No. 1131 of 2023 ..2.. JUDGMENT The petitioner has approached this court challenging the proceedings initiated against the petitioner under the provisions of the SARFAESI Act to recover amounts due from the petitioner under the credit facilities availed by the petitioner from the respondent bank.

The learned counsel appearing for the petitioner would submit that the petitioner is operating a bar hotel. It is submitted that the default occurred on account of the fact that the business of the petitioner suffered immensely on account of the covid-19 pandemic. It is submitted that the petitioner has made periodic payments, as is evident from the averments in the writ petition. It is submitted that the petitioner was proposing to make a payment of Rs.30,00,000/- last week. But, he was unable to do so, as there were some arrears of sales tax payable by the petitioner, which have to be settled under the amnesty scheme. It is submitted that the bank had filed an Original Application before the Debts Recovery Tribunal and one of

W.P. (C) No. 1131 of 2023 ..3.. the items of properties which was mortgaged was released on the petitioner remitting a sum of Rs.75,00,000/-. It is submitted that the business of the petitioner is a viable business and therefore, the petitioner may be given an opportunity to settle the liability by repaying the amounts in instalments.

The learned counsel appearing for the respondent bank vehemently opposes the grant of any relief to the petitioner. It is submitted that the account of the petitioner turned into Non-Performing Asset as early as in the year 2016 and therefore, it is not open to the petitioner to contend that the default occurred only on account of the covid – 19 pandemic. It is submitted that the total liability as on date is Rs.25,54,00,000/- and therefore, any further delay in proceeding with the recovery will cause serious prejudice to the respondent bank. It is submitted that the proceedings were initiated before the Chief Judicial Magistrate’s Court, Ernakulam in the year 2019, and physical possession is scheduled to be taken today (13.01.2023). It is

W.P. (C) No. 1131 of 2023 ..4.. submitted that there is absolutely no defect in the proceedings initiated by the bank. It is submitted that notwithstanding the above, if the petitioner pays a sum of Rs.5 crores towards the loan liability within a period of one week from today, the steps for taking physical possession can be adjourned.

The learned counsel appearing for the petitioner would submit that the bar license of the petitioner is due for renewal by March of 2023 and a huge amount will have to be paid to the government as license fee. It is submitted that the petitioner will be in a position to pay a sum of Rs.10,00,000/- immediately and a further sum of Rs.50,00,000/- by the first week of April.

Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent bank, I am of the opinion that the petitioner has not made out any case for interference under Article 226 of the Constitution of India. The liabilities of the petitioner are huge. The account has been in the NPA Status since the year

W.P. (C) No. 1131 of 2023 ..5.. 2016. Proceedings before the Magistrate for taking physical possession under Section 14 of the SARFAESI Act have been pending since 2019. The petitioner is also not in a position to pay a substantial amount immediately to avert taking of the physical possession. In such circumstances, it should not be proper for this court to exercise its juri iction under Article 226 of the Constitution of India in matters arising under the SARFAESI Act. The writ petition fails. It is accordingly, dismissed. GOPINATH P. JUDGE RMV

W.P. (C) No. 1131 of 2023 ..6.. APPENDIX OF WP(C) 1131/2023 PETITIONER EXHIBITS Exhibit P1OF THE PETITION FILED BY THE RESPONDENTS UNDER SECTION 14 OF THE SARFAESI ACT NUMBERED AS MC 169/2019 BEFORE THE ADDITIONAL CJM ,SPECIAL COURT FOR MP AND MLAS Exhibit2OF THE REPRESENTATION DATED 25/11/2022 REQUESTING FOR THE SETTLEMENT OF LIABILITIES UNDER A ONE-TIME SETTLEMENT SCHEME SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT BANK Exhibit P3OF THE RECEIPT EVIDENCING PAYMENT OF RS 40,00,000 Exhibit4 AOF THE RECEIPT EVIDENCING PAYMENT OF RS 10,00,000/- Exhibit5OF THE RECEIPT EVIDENCING PAYMENT OF RS 15,00,000/- Exhibit P6OF THE ORDER DATED 25/5/2022 IN OA 597/2018 Exhibit P7 AOF THE PROCEEDINGS DATED 17/11/2022 OF THE ADDITIONAL CJM, SPECIAL COURT FOR MP AND MLAS IN MC 169/2019 Exhibit P8OF THE ORDER PASSED BY THE STATE GOODS AND SERVICES TAX DEPT DATED 20/9/2022 Exhibit P9 AOF THE BANK STATEMENT DATED 31/12/2022 EVIDENCING PAYMENT OF RS 15,36,147/- Exhibit P10OF THE BANK STATEMENT DATED 10/1/2023 EVIDENCING PAYMENT OF RS 5,12,050/- Exhibit P11 AOF THE PROCEEDINGS DATED 6/1 2023 IN MC 169/2019 OF THE ADDITIONAL CJM, SPECIAL COURT FOR MP AND MLAS RESPONDENTS' EXHIBITS:NILP.A.TO JUDGE