JAFRED NETTO Vs. STATE OF KERALA

JUDGEMENT

(1.) Sebastian, the 4th respondent, in 2012, availed himself of a cash credit facility for 15 lakh rupees. He mortgaged one acre of his property then as security. Now, the entire debt stands at about 18 lakh rupees. After invoking Section 13 (4) of the SARFAESI Act, on 11.01.2018, the respondent Co-operative Bank took symbolic possession of the secured asset.

(2.) Pending the recovery proceedings, Jafred Netto and Jobin V. James, the petitioners, purchased 15 cents out of one acre the secured asset from Sebastian. They bought that extent as two items through two sale deeds, dated 4.4.2017 and 30.6.2017. After purchasing the property, the petitioners represented to the respondent bank that if at all it brought the secured asset to sale, it must exclude the extent the petitioners purchased. The respondent bank rejected that request.

(3.) Aggrieved, the petitioners filed this writ petition. The petitioners' counsel strenuously contends that Rule 8(5) of the Security Interest (Enforcement) Rules ("the Rules") is similar to Order XXI Rule 64 of the Code of Civil Procedure. According to him, the rule mandates that the bank should sell only that portion of property enough to discharge the debt. And nothing more. For this, he relies on Ambati Narasayya v Subba Rao, (1990) AIR SC 119 , Mariyappa (Dead) by Lrs. v Siddappa, (2005) 10 SCC 235 and Swastik Agency v State Bank of India, (2009) AIR Orissa 147.