STATE BANK OF TRAVANCORE Vs R.SOBHANA .
Bench: ANIL R. DAVE,L. NAGESWARA RAO
Case number: C.A. No.-008625-008625 / 2016
Diary number: 35627 / 2012
Advocates: A. V. RANGAM Vs
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Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
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)
J U D G M E N T
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
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payment of instalments as a result of which the loan
account became irregular. The Bank filed O. S. No.500 of
1983 in the Court of Subordinate Judge,
Thiruvananthapuram for recovery of an amount of
Rs.19,500/- together with interest 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)
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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 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
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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 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
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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 right to
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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
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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 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
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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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