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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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