K ANANDAN Vs. STATE OF KERALA

JUDGEMENT

(1.) THE issues involved in both these cases are closely interconnected and hence dealt with together. THE grievance projected by the petitioner in the former case is against the coercive steps taken by the respondents for realisation of huge amounts from him stating that, pursuant to the default of the petitioner in completing the works awarded to him, the same had to be re-scheduled and re-allotted at the cost of the petitioner, in view of the loss to the 5th respondent/Block Panchayat. THE case of the said petitioner is that, the termination of the contract itself is wrong; particularly when cancellation of the work order vide Ext. P2 was without any prior notice and hence in violation of Rule 4 of the Kerala Panchayat Raj (Contract) Rules, 1996. It is also contended that, no coercive proceedings will lie, since there is no quantification of the liability by issuing any notice to the petitioner giving an opportunity of hearing and that the liability has been fixed unilaterally by the Government.

(2.) WP (C) No. 33943/2007 has been filed by the secured creditor against the lethargy of the authorities under the Government in taking proper steps to implement Ext. P5 order passed by the District Magistrate under Section 14 of the SARFAESI Act, for realisation of the amount due from the 6th respondent therein, who is none other than the petitioner in the former case. The reason for the alleged inaction, as pointed out by the second respondent in the counter-affidavit is that, no further act could be pursued in view of the steps being taken against the 6th respondent for realisation of the amount mainly due to the 5th respondent (Block Panchayat) in WP (C) No. 34242/2006 and under other heads. It is also pointed out that, the said liability to the Block Panchayat; the amounts due to the Toddy Workers' Welfare Fund and the amount liable to be paid in a Criminal case involving the offence under Section 138 of the Negotiable Instruments Act will have to be satisfied first, in view of the 'prior charge' as provided under Section 3 of the Kerala Revenue Recovery Act and in the said circumstance, the claim put forth by the petitioner in WP (C) No. 33943/2007 (Secured creditor) stands far behind in the queue.

(3.) WITH regard to the case of the petitioner in WP (C) No. 33943/2007, the 6th respondent therein (who is the petitioner in the other Writ Petition) had availed a 'housing loan', pursuant to the application dated 30/11/2001 and the agreement dated 02/03/2002; whereby a sum of Rs.25,00,000/-was given to him, upon creating security interest over the property in question. However, the borrower was not at all eager to discharge the liability by remitting the instalments on time; under which circumstance, the secured creditor had no other alternative but to pursue further steps under the SARFAESI Act, after declaring the account as 'NPA. Ext. P1 is the notice issued under Section 13(2), which was served upon the borrower, as borne by Ext. P2 postal acknowledgment card. Pursuant to Ext. P3 application preferred under Section 14 of the Act, the District Magistrate passed Ext. P4 order, providing necessary assistance to take physical possession of the property, authorising the concerned officers to take consequential steps. However, there occurred a mistake in Ext. P3 application, insofar as the actual extent of land having 13.86 'ares' was wrongly described as 13.86 'cents'; which accordingly was got corrected vide Ext. P5 issued by the District Magistrate. Despite the issuance of the said specific order, the concerned respondent did not pursue any further steps to give effect to Ext. P5 which hence is sought to be redressed in the said Writ Petition.