G.SUBHULAKSHMI Vs. UCO BANK,QUILON BRANCH

JUDGEMENT

(1.) The petitioner in W.P.(C)No.15236 of 2025 filed this writ appeal under Sec. 5(i) of the Kerala High Court Act 1958, against the judgment dtd. 25/6/2025 passed by the learned Single Judge, dismissing that writ petition filed by the appellant/petitioner challenging Ext.P7 order dtd. 28/3/2025 of the Debts Recovery Appellate Tribunal, Chennai, which confirmed Ext.P3 order dtd. 27/11/2024 in S.A. No.618 of 2024 of the Debts Recovery Tribunal-II, Ernakulam.

(2.) The appellant obtained the entire ground floor and two shop rooms on the southern side of the upstairs portion of a two storey building bearing No. AMCW-33/803 situated in 10.09 Ares of property in resurvey No.28 (old survey No.598/8/A/16, 8/A/18) Block No.46 of Alappuzha West Village, from the 2nd respondent for conducting a Scanning and Diagnostic Centre for a period of seven years, i.e., from 1/5/2023 to 30/4/2030, with a stipulation to pay a monthly rent of Rs.30,000.00, on the strength of Ext.P1 registered rent agreement bearing No.1648 of 2023 of SRO Alappuzha dtd. 29/4/2023. While the appellant was continuing as a tenant, she understood that the 1st respondent Bank proceeded against the property, including the building, which was offered as security by the 2nd respondent as a guarantor to the loan availed by M/s. Arafa Gold and Diamonds Private Ltd. from the 1st respondent Bank. Pursuant to the proceedings initiated by the 1st respondent under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act for short), the Chief Judicial Magistrate, Alappuzha, appointed an Advocate Commissioner in M.C.No.327 of 2024. The Advocate Commissioner intimated to the appellant to vacate the premises and to hand over the physical possession of the secured asset to the 1st respondent Bank. Challenging the securitisation measures initiated by the 1st respondent Bank, the appellant filed S.A. No.618 of 2024 before the Debts Recovery Tribunal, Ernakulam. By Ext.P3 order dtd. 27/11/2024, the Debts Recovery Tribunal dismissed the securitisation application filed by the appellant. Though the appellant preferred an appeal before the Debts Recovery Appellate Tribunal, Chennai, as AIR (SA) No.1923 of 2024, by Ext.P7 order dtd. 28/3/2025, the appeal was dismissed. Challenging Ext.P7, the appellant preferred the writ petition under Article 226 of the Constitution of India seeking the following reliefs;

(3.) The 1st respondent Bank had filed a counter affidavit dtd. 20/6/2025 opposing the reliefs sought in the writ petition and producing therewith Exts.R1(A) to R1(E) documents. It is contended in the counter affidavit filed by the 1st respondent that the 2nd respondent stood as guarantor to the credit facilities availed by the partnership firm M/s. Arafa Gold and Diamonds Private Ltd., by a sanction letter dtd. 14/3/2014 and had created an equitable mortgage of the subject properties in favour of the 1st respondent Bank. Subsequently, the very same borrower was sanctioned another cash credit facility to the limit of Rs.17.00 Crores. The equitable mortgage already created by the 2nd respondent was extended to the credit facilities sanctioned on 13/11/2019 in respect of the properties covered by the sale deed No.1729 of 2005 dtd. 29/3/2025 of SRO Alappuzha, and the release deed No.168 of 2009 dtd. 13/1/2009. Later, the partnership firm was constituted as a company in the name of M/s.Arafa Gold and Diamonds Private Ltd., with the 2nd respondent as the Managing Director in the name of M/s.Arafa Gold and Diamonds Private Ltd. The credit facilities to the limit of Rs.17.00 Crores already sanctioned were renewed by the sanction letter dtd. 29/6/2022. It is further contended by the 1st respondent that the lease was created in collusion between the appellant and the 2nd respondent in order to defraud the 1st respondent Bank. The lease is against the provisions in Sec. 65A of the Transfer of property Act, 1882 (T.P Act for short), read with Sec. 17(4-A) of the SARFAESI Act. It is also stated in the counter affidavit of the 1st respondent that the loan account was classified as a Non-Performing Asset (NPA for short) and notice under Sec. 13(2) of the SARFAESI Act was issued to the 2nd respondent which ended up in the issuance of notice under Sec. 13(4) and filing of application before the Chief Judicial Magistrate, Alappuzha, under Sec. 14 of that Act. The appellant, during the pendency of her appeal before the Debts Recovery Appellate Tribunal, Chennai, moved this Court by filing OP(DRT) No.398 of 2024 praying for disposal of the appeal and the stay petition pending before the Debts Recovery Appellate Tribunal, Chennai, within a time frame and for the further direction to the 1st respondent Bank not to take any coercive steps to dispossess the appellant from the premises till the disposal of the OP(DRT). Some other persons who are similarly situated to that of the appellant also filed OP(DRTs) before this Court. By Ext.R1(C) common judgment dtd. 20/12/2024, this Court dismissed the OP(DRTs), holding that the petitioners therein have not made out a prima facie case for an interim protection. However, the learned Single Judge directed the Debts Recovery Appellate Tribunal to consider the appeal untrammelled by the observations contained in that judgment. In the writ petition, the appellant did not disclose the filing of the OP(DRT) before this Court and the adverse observations made in Ext.R1(C) judgment. The appellant did not approach this Court with clean hands.