HDFC BANK LTD Vs. REMADEVI SRINIKETHAN

JUDGEMENT

(1.) Heard learned Standing Counsel for the HDFC Bank and learned counsel appearing for the writ petitioner. 2. The writ petitioner in W.P(C).No. 28624 of 2011 was the plaintiff in O.S.No.400 of 2007 on the file of the Additional Sub Court, Kollam for recovery of a sum of Rs.21,46,000/ - with cost etc. against the defendants. Item No.3 of the plaint schedule property was attached before judgment for the suit claim. As a matter of fact, item No.3 property in the plaint schedule was mortgaged by the first defendant principal debtor at the time of borrowing loan from the Lord Krishna Bank. The said Bank subsequently came to be merged with HDFC Bank Limited, who is before us in the appeal. 3. Apparently, the Lord Krishna Bank was a party to the Original Suit and not HDFC Bank initially.

(2.) When the things stood as stated above, the HDFC Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and published sale notice declaring the intention to auction the properties including item No.3 of the plaint schedule property. Exhibit P6 came to be challenged in the Writ Petition, wherein there was an interim prayer seeking deposit of Rs.38,35,560/ - from the sale proceeds or to produce fixed deposit certificate for the said amount. Meanwhile, the writ petitioner, who was the plaintiff in the Original Suit filed an application before the trial court in the Original Suit directing the Bank to deposit Rs.38,35,560/ -. According to the writ petitioner, since the Sub Judge was on leave, no orders came to be passed on the interim application, therefore, he approached the learned Single Judge in the Writ Petition. However, the fact remains, at the stage of admission, the impugned order dated 28.10.2011 came to be passed directing the Bank to deposit entire sale proceeds or to furnish security by the appellant Bank. 4. Admittedly, sale came to be conducted on 23.1.2012 by the appellant -Bank and the auction purchaser was successful in bidding the same at Rs.90.25 lakhs. 25% of the auction amount came to be deposited with the authorised officer and the sale came to be confirmed on 4.7.2012 and the balance amount of auction amount came to be deposited only on 7.7.2012. Thereafter, the Bank filed a counter affidavit in I.A.No.10073 of 2012 seeking modification of the interim order dated 21.7.2012. However, contempt proceedings came to be initiated much earlier to the deposit of the entire amount, i.e., on 29.3.2012. Now the appeal is filed challenging the interim order dated 28.10.2011. The Writ Petition, as already stated above, is filed seeking a direction to the Bank to deposit a sum of Rs.38,35,560/ - and the contempt proceedings are filed again for non compliance of order dated 28.10.2011. As on today, the Original Suit is still pending before the trial court and it is at the stage of trial. Ultimately, whether the plaintiff -writ petitioner is entitled for attachment before judgment against a property, which was already secured to the Bank by the principal debtor the owner of the property, it has to be considered. Whether sale is confirmed or not and whether possession of the property is taken away by the plaintiff -Bank or not, as long as order of attachment is in force, this would go along with the property unless the order of attachment is raised by a competent court. The fact remains, under altogether a different proceedings property came to be sold in a public auction under the SARFAESI Act by the appellant Bank, which also cannot be find fault with, as the Bank has taken over assets and liabilities of the Lord Krishna Bank and for all practical purposes the appellant Bank becomes the creditor. In that view of the matter, we cannot find fault with the initiation of proceedings under the SARFAESI Act seeking sale of the property in a public auction, which was already secured to the Bank. 5. Now the question is whether the writ petitioner is entitled for a direction for deposit of entire sale amount, i.e., Rs.90.25 lakhs. Apparently, the suit claim is about Rs.21,46,000/ - in the Writ Petition the amount became Rs.38,35,560/ -, which includes interest at 18% per annum and cost as well. As already stated above, whether the writ petitioner is entitled for this money as of right has to be decided in the Original Suit. The only direction we are now concerned is with the interim order directing the Bank to deposit entire sale proceeds into the court. We are dealing with the appellant Bank, who was the respondent before the learned Single Judge, having its business in various places of Kerala and also throughout the country. It is not the case of the writ petitioner that the Bank is closing its business.

(3.) It is not the case of the writ petitioner that the present appellant Bank is at the verge of closure for some serious financial crisis. In that view of the matter, question of depositing money into the court would not arise. Attachment under Order XXVIII Rule 5 of the Code of Civil Procedure passed by the trial court would remain and once the plaintiff is successful in the relief sought against the defendants and if that decision reaches finality, they can always execute the decree against the property by bringing the property for sale. It is needless to say that secured creditor's right and privilege takes first priority. 6. In that view of the matter, so far as property in question is concerned, if it is sold in public auction, after satisfying the dues of the Bank if any amount is left over, that should be paid to the person, who would entitle for such amount in the suit, provided he is able to succeed in his endeavour that the main relief decreeing the suit claim is passed in his favour. In view of the above observations, we are of the opinion, there is no need to keep the contempt proceedings pending, as the very date of sale and payment of amounts and later confirmation of sale would indicate, there was no intentional disobedience of any order by the officers of the appellant Bank or the authorised officer. 4. So far as the Writ Petition and the Writ Appeal are concerned, they are disposed of in the light of the above observations and the appellant -Bank need not deposit the balance amount. Further the amount already deposited, i.e., Rs.21,46,000/ - shall be returned to the appellant Bank. None of the observations made above would come in the way of disposal of the suit and the trial court shall dispose of the suit in accordance with law untrammelled by any observations made in this judgment. The suit shall be disposed of as expeditiously as possible, at any rate, within six months from the date of receipt of a copy of this judgment. MANJULA CHELLUR, CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE vgs07.12