State Bank Of Travancore vs R.Sobhana .

CIVIL APPEAL No.8625 of 2016 (Arising out of SLP (C) No.34536 of 2012)

STATE BANK OF TRAVANCORE & ORS. .... Appellant(s) Versus

R. SOBHANA & ORS.

…. Respondent(s)

JUDGMENT

L. NAGESWARA RAO, J.

Leave granted.

The first respondent and her husband late Sh.P. K. Thampi

Raj availed a loan of Rs.15,000/- from the first appellant-Bank

on 04.07.1981 by creating an equitable mortgage by deposit of

title deeds in respect of 1.800 sq. links in Survey No.1073 of

2001 of Vanchiyoor village, District Thiruvananthapuram. There

was a default in payment of instalments as a result of which the

loan account became irregular. The Bank filed O. S. No.500 of Signature Not Verified

1983 in the Court of Subordinate Judge, Thiruvananthapuram Digitally signed by SARITA PUROHIT Date: 2016.09.03 10:42:45 IST Reason:

for recovery of an amount of Rs.19,500/- together with interest

1 at 13.5 per cent per annum. The suit was decreed on

25.08.1994. The property was put to auction in the execution

petition filed by the Bank. As none came forward, the Bank bid

for the property in the auction. A sale certificate was issued in

favour of the Bank on 22.02.1994.

2. The Bank sold the said property in 2007 by inviting tenders

for Rs.10,10,001/-. The first respondent along with her husband

approached the Bank with a request to return the excess amount

which the Bank secured by way of sale of the property. They also

sought for payment of rent that the Bank earned by letting out

the property for the period 08.07.1996 to May, 2006. It was

quantified at Rs.1,41,600/-. As the Bank did not respond

favourably, respondent No.1 along with her husband filed W.P.

(C) No.32911 of 2011 in the High Court of Kerala seeking a

Mandamus to the Bank to return the excess sale amount in

respect of the property along with the rent collected by the Bank

for the property from 08.07.1996 to May, 2006. A counter

affidavit was filed on behalf of the appellants in which it was

stated that the Bank became the absolute owner of the property

after a sale certificate was issued on 22.02.1994. The Bank

relied upon Section 65 of the Code of Civil Procedure to plead

that it had perfected its right, title, interest and possession over

2 the property covered by the sale certificate. The Bank also

pleaded that the Writ Petitioners did not have any right over the

property which was purchased by it in the auction conducted by

Court.

3. By a judgment dated 28.02.2012, a learned Single Judge of

the High Court of Kerala dismissed the writ petition (C) No.32911

of 2011 by holding that the petitioners did not have any right in

the property after the title had passed on to the Bank in 1994

and they cannot have any claim in respect of the rent received for

the property or the proceeds of the sale conducted by the Bank.

4. Aggrieved by the judgment of the learned Single Judge, the

first respondent along with her husband filed writ appeal

No.1077 of 2012. During the pendency of the appeal, the first

respondent’s husband died. The first respondent’s children were

impleaded as appellants in the appeal. By an order dated

15.06.2012, a Division Bench of the High Court of Kerala took

note of the fact that the first respondent was paralyzed on

account of meningitis, one daughter was mentally retarded and

another son was a psychiatric patient. In view of the misery faced

by the respondent’s family the Managing Director of the Bank

was directed to consider sharing of a substantial amount of profit

accrued to the Bank by way of sale of the property with the

3 respondents.

5. On being informed that the Bank was not willing to pay the

respondents a part of the sale proceeds, another interim order

was passed on 19.07.2012 asking the Board of the Bank to

consider the directions given by the Court by its earlier order

dated 15.06.2012. The Board in its meeting dated 10.09.2012

decided that the respondents are not entitled for any payment

from the proceeds of the sale of the property.

6. Writ Appeal No.1077 of 2012 was finally heard and allowed

on 25.09.2012 by directing refund of Rs.6.5 lakhs to the

respondents within a period of two weeks from the date of

production of copy of the judgment. Assailing the legality and

validity of the said judgment, the Appellants have filed the above

appeal.

7. Mr. R.P. Bhatt, Senior Advocate appeared for the appellants

and submitted that the High Court erred in allowing the writ

appeal after recording a finding that the Bank did not indulge in

any illegality. According to him, the High Court ought not to

have made adverse remarks against the Bank in the matter of its

business transactions. Mr. Bhatt also submitted that the entire

transaction could not have been dubbed as unfair. In any event,

according to Mr. Bhatt, the respondents cannot assert any legal

4 right to claim a share in the proceeds of sale of the property by

the Bank.

8. Mr. Renjith B. Marar, Advocate appearing for the

respondents submitted that the respondents are not only in

financial distress but also are suffering from serious illness. He

was very fair in submitting that though the respondents are not

claiming any legal right over the property they are entitled for

some payment by taking into account the fact that they took a

loan of Rs.15,000/- and their property was sold by the Bank for

Rs.10 lakhs.

9. It is clear from the facts narrated above that the Bank has

not indulged in any illegality either in purchasing the property in

the auction conducted by the Court in 1992 or in the sale of the

property in the year 2007. The respondents have no right in

claiming any share in the proceeds of the sale of the property

after the Bank became the owner of the property in 1992. We

find substance in the submissions made by Mr. R. P. Bhatt that

the Division Bench of the High Court should not have made

scathing remarks about the conduct of the Bank. We are of the

opinion that the adverse comments made by the Division Bench

against the Bank are unwarranted and deserve to be expunged.

The High Court erred in directing payment of Rs.6.5 lakhs to the

5 respondents towards their share in the proceeds of sale of

property by the Bank in 2007.

10. Having dealt with the matter on merits in favour of the

appellant- Bank, we are of the opinion that in the peculiar facts

of the case the respondents are entitled for some relief. They

have availed a loan of Rs.15,000/- and due to the non payment

of the loan they have lost a property which was sold by the Bank

for Rs.10 lakhs in 2007. It is clear from the record that the

respondents are suffering from acute illness apart from severe

financial distress. Taking into account the extreme adversity

which the family of respondent is facing, we are of the opinion

that the respondents are entitled for a payment of Rs.5 lakh

(Rupees Five Lakh only) as ex-gratia. To do complete justice in

the matter, we direct the Bank to pay Rs.5 lakhs to the

respondents within a period of eight weeks.

11. The appeal is disposed of in terms of the above directions.

.…............................J. [ANIL R. DAVE]

...................................J. [L. NAGESWARA RAO]

New Delhi, September 2, 2016.

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ITEM NO.1A COURT NO.2 SECTION XIA (For Judgment)

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

C.A.No.8625/2016 @ SLP(C)No(s).34536/2012

(Arising out of impugned final judgment and order dated 25/09/2012 in WA No.1077/2012 passed by the High Court Of Kerala At Ernakulam)

STATE BANK OF TRAVANCORE & ORS. Petitioner(s)

VERSUS

R.SOBHANA & ORS. Respondent(s)

Date : 02/09/2016 This petition was called on pronouncement of Judgment today.

For Petitioner(s) Mr. A.V. Rangam,Adv.

Mr. Buddy A. Ranganadhan,Adv.

Mr. D.V. Raghu Vamsy,Adv.

For Respondent(s) Ms. Lakshmi N. Kaimal,Adv.

Mr. T.K. Babu,Adv.

for Mr. Renjith B. Marar,Adv.

Hon'ble Mr. Justice L. Nageswara Rao pronounced the Non-Reportable judgment of the Bench comprising Hon'ble Mr. Justice Anil R. Dave and His Lordship.

Leave granted.

The appeal is disposed of in terms of the signed Non-Reportable judgment.

Pending application, if any, stands disposed of.

(Sarita Purohit) (Sneh Bala Mehra) Court Master Assistant Registrar

(Signed Non-Reportable judgment is placed on the file)

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