Housing Development Finance vs Geethu Viswanath and N.C. Thomas

K.M. Joseph, J.—Petitioner is the plaintiff in O.S.207 of 2009. The prayers in the writ petition are as follows:

i) to declare that the petitioner a Non Banking Financial Institution does not come under the definition of Bank or Financial Institution as defined under 2(d) and 2(h) of the Recovery of Debts to Banks and Financial Institution Act, 1993.

ii) to declare that petitioner does not come under the purview of Financial Institution as defined u/s 2(h)(ia) of the Recovery of Debts Due to Banks & Financial Institution Act in view of Ext.P3.

iii) to issue a writ of certiorari or any other appropriate writs directions or orders to set aside Ext.P5.

Briefly put, the case of the petitioner is as follows. Petitioner is registered u/s 29A of National Housing Bank Act, 1987. It is not a Bank or financial institution as defined under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Petitioner is notified as a financial institution by virtue of Sub-clause (iv) of Clause (m) of Sub-section (1) of Section 2 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act for short) by Ext.P3 notification. Petitioner granted a loan to the Ist respondent to purchase immovable property from the 2nd respondent. After receipt of the loan amount a sale deed was executed by the 2nd respondent in favour of the Ist respondent and the title deed was deposited by way of equitable mortgage. Petitioner later came to know that the assignor of the 2nd respondent had created a mortgage by way of deposit of title deeds to Union Bank of India and Centurion Bank of Panjab Ltd, Ernkulam Branch. Proceedings are there under the Securitisation Act. Petitioner, however filed a civil suit as O.S. No. 207/2009 before the Principal Subordinate Judge, Ernakulam as evidenced from Ext.P4 plaint. It obtained a conditional attachment. A contention was taken by the Ist respondent regarding maintainability of the suit. The objection regarding the maintainability of the suit was considered by the Court and the Court passed Ext.P5 order. The Court has found that the objection regarding lack of jurisdiction raised by the Ist respondent is valid and the suit has been dismissed. However, petitioner filed Ext.P6 review petition and the same is posted for hearing. It is while so the petitioner has approached this Court seeking the above reliefs.

I heard the learned counsel for the petitioner and learned counsel for the 2nd respondent. Learned counsel for the petitioner would point out that Exts.P1, P2 and P3 were not actually produced at the time of hearing, but they were subsequently produced under a petition. According to him, petitioner is not a Bank. Petitioner is also not a financial institution as defined in the Recovery of Debts Due to Banks and Financial Institutions Act. All that happened was, a notification was issued under the Securitisation Act treating the petitioner as a financial institution.

I would notice that the Court below proceeded on the basis that the petitioner is a financial institution and since Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act creates a bar, the suit is barred. In this context it is the contention of the petitioner that while it may be true that the petitioner has been notified as a financial institution under the Securitisation Act, that would not make it a financial institution for the purpose of the Recovery of Debts Due to Banks and Financial Institutions Act. He would point out that Ext.P3 is a notification issued by the Central Government and it cannot be in the region of any doubt that it is issued under the Securitisation Act and the petitioner can be treated as a financial institution only for the purpose of Securitisation Act. It would appear that Exts.P1 to P3 as such were not before the learned Judge. The case of the petitioner in this regard is that petitioner had filed Exts.P1 to P3 as early as on 26.5.2010 along with I.A. No. 3437/2010 but I.A. No. 3437/2010 was closed on 28.5.2010 observing that dictation of the order has been complete and the document is produced later.

Learned counsel for the 2nd respondent would, however, point out that the petitioner has already approached the civil Court and filed a review petition it may not be appropriate for this Court to consider the matter under Article 226. Of course, learned counsel for the petitioner submits that it is a matter of jurisdiction. Since the petitioner has already approached the civil Court and purportedly invoked the jurisdiction under Order 47 of Code of Civil Procedure, it may not be appropriate for me to consider the question. Accordingly, I relegate the petitioner to pursue the remedy which he has already pursued, viz. the review petition. In the circumstances of the case I order that the interim order passed by this Court will continue till the disposal of the Review Petition.