UCO BANK, TRIVANDRUM BRANCH v. STATE OF KERALA

WP(C).No. 6820 of 2012 (B) -2-*6.WILLS RAJ S., VALIYAVILAVEEDU,KATTACHALKUZHI P.O.,THIRUVANANTHAPURAM DISTRICT.*7.SANALKUMAR K.K.,MITHANATHUPUTHEN VEEDU,T.C. 4/1480, KAVIDIYAR P.O., THIRUVANANTHAPURAM.*8.MADHUSOODANAN NAIR A.,KANIYAMVILAKATHUVEEDU,PACHALLOOR P.O., THIRUVANANTHAPURAM - 695 021.*9.BALAKRISHNAN NAIR K.K., CHEMPAKAMANDIRAM, THOZHUVANKODE LANE,VATTIYOORKAVU P.O., THIRUVANANTHAPURAM - 695 013.*ADDL. R4 TO R9 ARE IMPLEADED AS PER ORDER DATED 3/7/2012 IN IA NO. 8812/2012. R1 & R2 BY GOVT. PLEADER SRI. P.P. PADMALAYAN R4 TO R9 BY ADV. SRI.T.RAJASEKHARAN NAIR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-11-2012, ALONG WITH COC NO. 1345/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:Mn...3/- WP(C).No. 6820 of 2012 (B) APPENDIX PETITIONERS' EXHIBITS : EXT.P1 : TRUE COPY OF THE LOAN AGREEMENT DTD.11.1.2007 EXECUTED BY THE RESPONDENT NO.3.EXT.P2 : A TRUE COPY OF THE HYPOTHECATION AGREEMENT DTD. 27.3.08 IS EXECUTED BY THE RESPONDENT NO.3.EXT.P3 : A TRUE COPY OF HYPOTHECATION AGREEMENT DTD. 29.3.08 EXECUTED BY THE RESPONDENT NO.3 FOR RS.75 LAKHS.EXT.P4 : A TRUE COPY OF THE CONFIRMATION LETTER DTD.30.12.06 CONFIRMING THE DEPOSIT OF TITLE DEEDS WITH THE INTENTION TO CREATE EQUITABLE MORTGAGE IN FAVOUR OF THE PETITIONER BANK.EXT.P5 : A TRUE COPY OF THE RELEVANT PAGES OF EQUITABLE MORTGAGE REGISTER MAINTAINED BY THE PETITIONER BANK WITH MEMORANDUM OF DEPOSIT OF TITLE DEEDS.EXT.P6 : A TRUE COPY OF THE TITLE DEED OF THE 3RD RESPONDENT, SALE DEED NO.2622/1995, DTD.3.7.1995 OF SUB REGISTRAR OFFICE, BALARAMAPURAM.EXT.P7 : TRUE COPY OF THE POSSESSION CERTIFICATE DTD.4.11.2006 ISSUED BY THE VILLAGE OFFICER, ATHIYANNUR.EXT.P8 : TRUE COPY OF THE LOCATION CERTIFICATE ALONG WITH LOCATION SKETCH DTD.4.11.2006 ISSUED BY THE VILLAGE OFFICER, ATHIYANNUR.EXT.P9 : A TRUE COPY OF THE AGREEMENT ON RESCHEDULING/REPHRASING THE LOAN DTD.31.3.09.EXT.P10: A TRUE COPY OF THE NOTICE UNDER RULE 8(1) OF THE SECURITY INTEREST ENFORCEMENT RULES DTD.29.1.2011 TAKING POSSESSION OF THE SECURED ASSET.EXT.P11: A TRUE COPY OF THE PUBLICATION OF EXT.P10 NOTICE IN THE HINDU DAILY DTD.1.2.2011.EXT.P12: A TRUE COPY OF THE PUBLICATION OF EXT.P10 NOTICE IN THE KERALA KAUMUDI DAILY, DTD. 1.2.2011.EXT.P13: A TRUE COPY OF THE AFORESAID PROCLAMATION DTD.13.3.2012 PUBLISHED IN THE KERALA KAUMUDI DAILY, DTD.15.3.2012.EXT.P14: A TRUE COPY OF THE CLAIM PETITION DTD.16.3.2012 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.(Contd...) WP(C).No. 6820 of 2012 (B) RESPONDENTS' EXHIBITS :EXT.R2(a)PHOTOCOPY OF THE JUDGMENT IN WPC NO. 22182/2010.EXT.R5(a)PHOTOCOPY OF THE ORDER IN C.P. NO. 58/2007 ISSUED BY THE LABOURCOURT, KOLLAM.EXT.R5(b)COPY OF THE COMMUNICATION TO THAT EFFECT ISSUED TO THE 2ND RESPONDENT.EXT.R5(c)PHOTOCOPY OF THE JUDGMENT WP(C) 22182/2010 PASSE BY THIS COURT. //TRUE COPY// P.A. TO JUDGEMn C.T.RAVIKUMAR,J.-------------------------------------W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No.22182 of 2010-----------------------------------------Dated this the 15th day of November, 2012JUDGMENTThe petitioners in the captioned Contempt Petitionwere the petitioners in W.P.C. No.22182/2010. They are theworkers of the first respondent company in that writ petition viz.,Continental Publishers. They were dismissed from the service andthereafter they got registered a dispute as I.D.No.45/2005, andthat ultimately culminated in Ext.P1 award. As per Ext.P1 award,the said petitioners were directed to be reinstated in service withcontinuity in service and also with back wages and all furtherwage oriented benefits. However, the first respondent did notreinstate them in service and no back wages and other wageoriented benefits were given. The petitioners in the contemptpetition thereupon filed a Claim Petition No.58/2007 underSection 33C (2) of the Industrial Disputes Act. Ext.P2 in the saidwrit petition was thereupon passed after quantifying the amountdue. The Labour Court directed the first respondent in the said W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20102writ petition to pay the amount within two months from the dateof the said order. Upon his failure to pay the amount in terms ofthe directions in Ext.P2, revenue recovery steps were initiatedagainst him to recover the amount due as per Ext.P2 as arrearsof land Revenue by resorting to the proceedings under theRevenue Recovery Act. However, no effective steps were takento realise the amount. It was in the said circumstances, that thesaid writ petition viz., W.P.(C) No.22182/2010 was filed and thesame was disposed of as per Annexure A judgment. The fifthrespondent therein viz., the District Collector,Thiruvananthapuram, had issued Revenue Recovery Certificatesby directing respondents 2 and 3 to take appropriate steps basedon the Revenue Recovery Certificates issued by him. It is thedelay in complying with the said directions that constrained thepetitioners in W.P.(C) No.22182/2010 to file the captionedcontempt petition. In purported compliance with the same, thethird respondent in the said writ petition issued proclamationdated 13.03.2012 published in Kerala Koumudi daily dated15.3.2012 and, in fact, it is its issuance that led to the filing of W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20103Writ Petition No.6820/2012. The writ petitioner in WPC6820/2012 viz., UCO Bank contends that the property covered byExts.P4 to P8 in that writ petition belongs to the 3rd respondent,in the said writ petition and he has created equitable mortgage ofthat property with the petitioner-Bank as is obvious from Ext.P1.The chronic default committed by the 3rd respondent therein inthe matter of repayment constrained the said writ petitioner toresort to legal steps for recovering the amount due from the 3rdrespondent. In fact, for that purpose UCO Bank filedO.A.No.2/2011 before the Debt Recovery Tribunal, Ernakulam forrecovering an amount of Rs.1,06,21,824.75/-. Besides the same,appropriate steps under the Securitization and Reconstruction ofFinancial Asset and Enforcement of Security Interests Act (forshort the 'SARFAESI Act') were also taken by the Bank as isevident from Exts.P10 to P12 in W.P.(C) No.6820/2012. WhenWP(C). No.6820/2012 came up for consideration before thisCourt, this Court passed an interim order staying further actionbased on Ext.P13 on 19.3.2012. The facts explained above wouldreveal that the issues in these two cases are virtually W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20104interconnected and intertwined and a joint consideration of boththe matters are required. Therefore, the Contempt Petition andWP(C). No. 6820/2012 are simultaneously heard and taken upfor joint disposal. In the peculiar circumstances, even thequestion of prima facie satisfaction or otherwise of thecommission of contempt of this court cannot be considered inisolation without taking into account the contentions raised bythe petitioner in WP(C). No.6820/2012.2.The 3rd respondent in WP(C) No.6820/2012 wasthe first respondent in WP(C) No. 22182/2010. In fact, it is hisfailure to comply with orders in Ext.P2 in WP(C).No.22182/2010that constrained the petitioners in the said Writ Petition to filethe captioned Contempt Petition. As noticed hereinbefore, it wasin purported compliance with the directions in Annexure Ajudgment in CC(C) No.1345/2011 that Ext.P13 in WP(C) No.6820/2012 viz., proclamation was issued by the secondrespondent in WP(C) No.6820/2012. This Court issued notice tothe 3rd respondent in WP(C) No.6820/2012. Despite the receipt ofnotice in the said writ petition he has not chosen to enter W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20105appearance and contest the matter. The fact that he has createdequitable mortgage of the property covered by Exts.P4 to P8 inWP(C). No. 6820/2012 is therefore remains undisputed. In thesaid circumstances, the learned counsel for the petitioner in WP(C). No.6820/2012 contended that in view of the undisputed factof creation of equitable mortgage of the property covered byExts.P4 to P8 with the petitioner and in the light of the decision ofthis Court reported in Baby V. State of Kerala (1981 KLT510), the Recovery Officer cannot claim priority or in otherwords Ext.P13 cannot pursued with ignoring the rightful claim ofthe petitioner in WP(C). No.6820/2012.3.The learned counsel for the petitioner in WP(C)No. 6820/2012 relied on the decision in Baby's case (supra) tocontend that though amount due by virtue of an order underSection 33C (2) is recoverable by resorting the proceedings underthe Revenue Recovery Act, the said amount recoverable cannotbe said to be arrears of Public Revenue due on land or LandRevenue and therefore, the petitioner in WP(C). No.6820/2012 inwhose favour the 3rd respondent created equitable mortgage is W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20106having the first charge over the properties mortgaged to it. Thepetitioners in the contempt petition got themselves impleaded inW.P.(C) No. 6820/2012 as respondents 4 to 9. In fact, thatposition is not seriously disputed by the petitioners/ respondents4 to 9 in the writ petition. I find no reason to disagree with thedictum laid down by this Court in Baby's case (supra) andtherefore it can only hold that the Recovery Officer who issuedExt.P13 cannot claim any property over the claim made by thepetitioner in WP(C). No.6820/2012 based on the equitablemortgage created on the property belonging to the 3rd respondentby the 3rd respondent. Evidently, for recovering the amount dueunder Ext.P2 and also for recovering the amount due to thepetitioner Bank in WP(C). No.6820/2012, steps are beinginitiated under different Acts against the same propertiesbelonging to the 3rd respondent. The learned counsel forrespondents 4 to 9 contented that this Court considered all theaspects in Annexure A judgment, that is, inaction on the part ofthe authorities in effectively executing the Recovery Certificateissued by the District Collector, Thiruvananthapuram. This Court W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20107issued directions in Annexure A judgment to respondents 2 and 3in WP(C) No.22182/2012 to take effective steps based on theRevenue Recovery Certificate issued by the 5th respondent thereinto recover the amount due in terms of Ext.P2 award. In the lightof the judgment in Baby's Case (supra), there can be no doubtwith respect to the position while taking appropriate steps forrecovering the amount due under Ext.P2 the Revenue RecoveryOfficer cannot legally take anything which would defeat therightful claims of the petitioners in WP(C) No.6820/2012 as theyare having first charge over the properties covered by Ext.P13.When this be the position, no willful disobedience can beattributed against the respondents in CC(C) No.1435/2011 fornot proceeding with Ext.P13 to comply with the directions inAnnexure A judgment firstly for the reason that they havealready issued proclamation as is obvious from Ext.P13 in WP(C)No.6820/2012 and secondly they were incapacitated fromproceeding with Ext.P13 by the interim stay passed by this Courtin WP(C)No.6820/2012. In the said circumstances, CC(C)No.1345/2011 in WP(C) No.22182/2010 is closed. W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 201084.As noticed hereinbefore, petitioners in the abovecontempt petition got themselves impleaded in WP(C)No.6820/2012 as respondents 4 to 9. In view of the decision inBaby's case (supra) they cannot claim a preferential right overthe petitioner in WP(C) No.6820/2012 in respect of propertiesbelonging to the 3rd respondent which are mortgaged with thepetitioner in WP(C) No.6820/2012. At the same time, by virtueof Annexure A judgment respondents 2 and 3 in WP(C)No.22182/2010 are bound to take appropriate steps under theRevenue Recovery Act against properties which are notmortgaged with the petitioner in WP(C)No.6820/2012 andtherefore they are bound to take appropriate steps,expeditiously, to recover the amount due to respondents 4 to 9 inWPC No.6820/2012, who are the petitioners in WP(C)No.22182/2010.5.By virtue of the admitted position that theproperties covered by Exts.P4 to P8 have already beenmortgaged by the 3rd respondent with the petitioner in WP(C)No.6820/2012 the petitioner therein will be at liberty to take all W.P. (c). No. 6820 of 2012andContempt Case (Civil) No. 1345 of 2011inW.P.(c). No. 22182 of 20109steps for recovering the amount due to said petitioner inaccordance with law. To enable such steps Ext.P13 is set aside.At the same time, if ultimately the property is auctioned and ifthe proceeds is in excess of the amount actually due to them,the balance amount shall be deposited with the Labour Court.That will not stand in the way of the respondents 2 and 3 inproceeding with the steps which they are bound to take tocomply with the directions in Annexure A judgment. Since thisCourt set aside Ext.P13, respondents 2 and 3 shall takeappropriate steps including issuance of proclamation for thepurpose of ensuring recovery of amount due under Ext.P2 in WP(C)No.22182/2010, if the 3rd respondent in WP(C) No.6820/2012the first respondent in WP(C) 12282/2010 is in possession of anyproperty which are not mortgaged with the petitioner in WP(C)No.6820/2012. WP(C) No. 6820/2012 is disposed of accordingly.Sd/- C.T.RAVIKUMAR,JUDGE.dlk