(Prayer: This writ petition is filed under Article 227 of the Constitution of India, with a prayer to quash the order dt.13.08.08, of the Learned Judge of the Family Court at Mysore on IA.Nos.1 and 2 in OS.No.30/08, as at Ann-A and issue a writ of mandamus or any other appropriate writ or order or direction directing rejection of IA.Nos.1 and 2 filed under Order 39 Rule 1 and 2 of CPC., in OS.No.30/08, on the file of Learned Judge Family Court, Mysore.
These writ petitions are filed under Articles 226 and 227 of the Constitution of India, with a prayer to quash the order dt. 13.08.2008 passed on I.A.Nos. I and II in O.S.No.30 of 2008 in the court of the Family Court at Mysore as per Annexure-K.)
1. The petitioners in both these petitions are assailing the order dated 13.08.2008 passed by the Family Court, Mysuru on I.A.Nos.1 and 2 in O.S.No.30/2008. The petitioner- State Bank of Mysuru in W.P.No.2739/2009 is the second defendant and the petitioner - Sri. K.Govindaraju in W.P.Nos.2998 and 4410/2009 is the first defendant in the suit, while the respondent No. 1 in these petitions is the plaintiff in the said suit, being the wife of Sri. K. Govindaraju.
2. Since they are differently arrayed in these petitions, they will be referred as 'Bank', 'Wife' and 'Husband' respectively wherever context requires, for the purpose of convenience and clarity.
3. The husband and the wife got married to each other at Mysuru on 08.06.2001 and have a son born on 06.03.2003 out of their wedlock. However, due to marital discord, they have been residing separately. The wife in fact is residing in the matrimonial house which is owned by the husband since he has moved out of the same and is residing elsewhere. The said matrimonial house is the schedule property in the suit in question. Since according to the wife, she and their son was not being maintained by the husband, she filed a petition under Section 125 of the Criminal Procedure Code in C.Misc No.01/2005. The petition was disposed on 31.05.2008 granting the maintenance of Rs.2000/- to the son while the claim of the wife was rejected. In that regard, one of the consideration was also that the wife is in possession of the suit schedule property and the contention of the husband was that the wife can retain the property by repaying the loan to the bank as he does not have the means to do so. The said order is interse between the husband and wife, to which proceedings the bank is not a party.
4. When this was the position, the bank claiming that the loan amount had not been repaid by the husband who was its former employee, in exercise of its right under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short) published a paper notification dated 10.07. 2008 proposing to auction the suit schedule property on 13.08.2008. The wife claiming to be aggrieved by the same as she would be denied of her right of residence and terming it as a collusive action filed the suit on 21.07.2008 and the ex parte status quo/injunction order granted has been confirmed by the impugned order dated 13.08. 2008. It is in that view the husband as well as the bank have assailed the order.
5. The case of the bank is that the husband had joined its service on 18.11.1976 but as he was convicted and sentenced in a criminal case he was dismissed from service on 26.04.2003. However, when he was in service he had availed loan from the bank and had offered the suit schedule property as the security. Since the loan of Rs.9,33,899.50 paise was outstanding, the security interest was brought to auction as per law so as to recover the amount. The husband does not have objection for recovering the amount from the said property as he is otherwise unable to repay the amount due. In that light, a threshold contention that a suit of the present nature is not maintainable due to the bar contained in Section 34 of SARFAESI Act is urged before the Family Court and is re-asserted herein.
6. These petitions were at an earlier point disposed of by the order dated 25.06.2010 on taking note of the submission on behalf of the wife that she is agreeable to discharge the loan and retain the property and in that regard, a direction was issued to the bank to return the title documents deposited by the husband, to the wife after the loan is settled as per the statement of account to be furnished. Though that was the position, the wife is stated to have disputed the dues as claimed by the bank and the issue was prolonged. The bank therefore being deprived of their right to recover, filed review petitions in R.P.Nos.210-211/ 2013. This Court by the order dated 16.06.2016 has restored these petitions for consideration.
7. In the above backdrop, I have heard Sri Puttige Ramesh, learned counsel for the bank, Sri Y.K.Narayana Sharma, learned counsel for the husband and the wife who appeared in person. I have perused the petition papers in that background.
8. From the above noticed facts, it is seen that there is competing interest between the bank and the wife in respect of the same property which is the suit schedule property. The owner of the property who is the husband does not have objection for the bank to proceed to auction the property as otherwise he is not in a position to liquidate the loan. In that circumstance, when the bank has a prior charge over the property and the right available under the SARFAESI Act is exercised, whether the Family Court can exercise jurisdiction to restrain such action is the issue at the outset. The next issue is; if the Family Court cannot exercise jurisdiction will the wife be denied of a forum to claim her right to retain the property by putting forth the contentions relating to the property or to enter into settlement on having her grievance relating to the accounting being redressed.
9. The paper notification indicates that the auction sale is proposed under the SARFAESI Act. Though the specific dates relating to the loan being advanced and the charge being created by its owner i.e., the husband is not available, it cannot be in dispute that it is prior to his dismissal on 26.04.2003. In that background, though the order dated 31.05.2008 in C.Misc. No.01/2005 refers to the concession of the husband that his wife can retain the property by repaying the loan and if the same has weighed in the mind of the Court to observe that since residence is available and the wife has her earning, no maintenance is required to be ordered for the wife against the husband and the maintenance for the son alone is provided, the same in any event cannot defeat the right of the bank, in law as against the security interest. Further, the bank was not a party to the proceedings nor has any novation of the contact taken place pursuant to such order with the consent of the bank.
10. In that light, when the suit schedule property continues to remain as the security interest, the provisions of the SARFAESI Act will apply and the bar contained in Section 34 of the SARFAESI Act will come into operation. That does not leave the aggrieved party without any remedy since against the action taken under Sections 13 and 14 of the SARFAESI Act, an appeal is provided to be filed before the Debts Recovery Tribunal ('DRT' for short). The position of law in that regard is no more res-integra in as much as the Hon'ble Supreme Court has laid down the same explicitly in the case of United Bank of India -vs- Satyawati Tandon and others (AIR 2010 SC 3413) relied on by the learned counsel for the bank and the said position has been repeatedly reiterated.
11. The Family Court however referring to the power of the Family Court and the right of residence as available under the PWDV Act has exercised the power. If the provisions of that Act is taken note, there can be no doubt that the wife can enforce her right against the husband in so far as the shared household even to the extent of securing same level of alternative accommodation. That right can still be exercised against the husband in the changed circumstances if the property is lost in the action initiated by the bank. However, such right cannot defeat the pre-existing right of the bank, if they bonafide exercise their right to recover the amount due but even in such case if the wife as the aggrieved person is to protect her right assailing the action of the bank, the remedy open is to file an appeal as provided under Section 17 of SARFAESI Act and the Civil Court cannot entertain a suit or such proceedings.
12. The wife, who is an advocate by profession while seeking to sustain the order of the Family Court sought to contend that she had right over her husband's property and in the proceedings seeking for maintenance she was denied maintenance because the house was available for her residence and her husband had also consented to her keeping the house by clearing the loan secured from the bank. She therefore contends that such right cannot be defeated by colluding with the bank. It is her further contention that as wife the property would be her absolute property as provided under Section 14 of the Hindu Succession Act. It is her further case that even though she is ready and had offered to pay the loan and retain the property, the outstanding as claimed is not justified. According to her, if all the service and terminal benefits payable by the bank to her husband is appropriated to the loan account as has already been done, she would not be liable for the amount as demanded.
13. The petitioner having become the absolute owner of the property on the right maturing to an absolute right under Section 14 of the Hindu Succession Act in the manner as claimed cannot be determined herein. In any event, no charge has been created over the property for the maintenance though the contentions are noticed in the maintenance proceedings. That apart the wife had even before this Court contended at the earlier instance that she is prepared to settle the loan repayable to the bank and the writ petitions had been disposed of in that light. However the reason to seek recall was that she was raising unwarranted dispute with regard to the quantum of the outstanding as claimed by the bank and in the review petition the error apparent noticed was with regard to the transfer of ownership. Further, the contention urged presently by the wife on that score is also about the account not being appropriately maintained by the bank.
14. Therefore, in the instant case, in the background of the contentions urged and the issues raised which are required to be redressed, certainly the wife herein will have the locus standi to file the appeal under Section 17 of SARFAESI Act, as she would qualify under the term "any person" contained therein. Further, when the action initiated by the bank is under that Act and the wife in the present context is contending the appropriate deduction has not been made by crediting the service and terminal benefits and the due as claimed is not justified and further when the husband who is the borrower is also a party to the litigation, the said contentions relating to procedure adopted by the bank for action under Section 13(4) can be examined by the DRT as it is within the scope of its consideration in an appeal under Section 17 as the scope thereof is reckoned by the Hon'ble Supreme Court in the case of Satyawati Tandon (supra).
15. In that view, since the suit of the present nature is not maintainable the wife will have to file the appeal under Section 17 of SARFAESI Act. Since at the first instance the Family Court had granted the benefit of the injunction which has continued ever since, the benefit will have to be extended in the interest of justice, though technically the order impugned is liable to be set aside. Further since the provision also provides the limitation for appeal, the period spent in alternate proceedings is to be noticed and the appeal should be directed to be entertained on merits for the reasons stated above.
16. For all the afore stated reasons, the following,
(i) The writ petitions are allowed in part with no order as to costs.
(ii) The order dated 13.08.2008 passed in O.S.No.30/2008 impugned in these petitions is set aside with liberty to the wife to file an appeal under Section 17 of the SARFAESI Act.
(iii) Notwithstanding the same, the parties are directed to maintain status quo relating to the property in question for the reasons stated above, till the appeal is considered by the DRT, subject to the appeal being filed within four weeks from the date of receipt of a copy of this order.
(iv) If the appeal is filed within the period indicated above, the DRT shall consider the same on merits without reference to the delay in the peculiar facts of this case.
(v) All contentions are left open to be urged before the DRT.