Kerala Plantations vs South Indian Bank Ltd

C.S.Dias, J

The original petition is filed to set aside Exts.P16 and P21 orders passed by the Debt Recovery Tribunal-II, Ernakulam (in short 'Tribunal').

The brief facts relevant for the determination of the original petition are:

(i) The petitioner is a firm engaged in export of spices. The first respondent – Bank had sanctioned credit facilities to the tune of Rs.760/- lakh, which was later enhanced from time to time.

(ii) Due to the Covid-19 pandemic, the petitioner's business got seriously affected. Although the petitioner requested the first respondent to renew the credit facility, the same was not considered. Instead, the second respondent issued Ext.P1 notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (in short, ‘Act’).

(iii) As the classification of the petitioner's loan accounts as 'Non Performing Asset' (NPA) is per se illegal, the petitioner filed S.A No.90/2022 before the Tribunal, challenging the notices issued under the Act.

(iv) The petitioner's specific case is that most of the properties are agricultural lands, which are exempted from the provisions of the Act under Section 31(i) of the Act.

(v) To prove the above aspect, the petitioner had filed an application to appoint an Advocate Commissioner. Then, the respondents 1 and 2 filed Exts.P10 and 10A declarations, purportedly signed by the borrowers/guarantors to prove that the properties are not agricultural land. Exts.P10 and P10A are the declarations signed by one of the guarantors named Meenakumari.R, who has emphatically denied her signatures on the said documents. The said guarantor has sworn in Ext.P13 affidavit stating that Exts.P10 and P10A are not executed by her.

(vi) In the above background, the petitioner filed I.A No.1094/2023 (Ext.P14) in S.A 90/2022 to forward the disputed documents and the specimen signatures of Meenakumari.R, for expert opinion. The application was opposed by the respondents 1 and 2 vide Ext.P15 counter affidavit. But, the Tribunal, by the impugned Ext.P16 order, rejected Ext.P14 application.

(vii) Shocked by the dismissal of the application, the petitioner had filed I.A No.1406/2023 (Ext.P17) to review Ext.P16 order. The said application was also objected by the respondents 1 and 2 through Ext.P18 counter affidavit.

(viii) Nonetheless,   the   Tribunal,   by   the impugned Ext.P21 order, rejected the review petition also.

(ix) Exts.P16 and P21 orders are patently erroneous and wrong and are liable to be set aside. Hence, the original petition.

Heard; Sri.George Thomas, the learned Senior Counsel appearing for the petitioner and Sri.Sunil Shanker, the learned Standing Counsel appearing for respondents 1 and 2.

The point is whether there is any error in Exts.P16 and P21 orders?

The second respondent has initiated proceedings against the collateral security offered by the petitioner and its guarantors, to avail financial assistance from the first respondent-Bank.

The petitioner has challenged the recovery proceedings by filing S.A No.90/2022 before the Tribunal, inter alia, contending that the larger extent of the properties are agricultural lands. To refute the allegations of the petitioner and its guarantors, the respondents 1 and 2 produced Exts.P10 and P10A declarations signed by Meenakumari.R, who has allegedly in unequivocal terms declared that the collateral security offered by her is not an agricultural land, that she would continue to use the said property as a non-agricultural land till the tenure of the loan is over and that she will not take a contrary stand, if proceedings are initiated for enforcement of the rights of the respondents 1 and 2 against the property, that the property is not a non-agricultural land.

The petitioner asserts that Meenakumari has bluntly denied the execution of Exts.P10 and P10A declarations by way of Ext.P13 affidavit. Furthermore, Ext.P12 document would establish that the signature of Meenakumari.R is forged.

To substantiate that the signatures of Meenakumari on Exts.P10 and P10A are forged, the petitioner filed Ext.P14 application to send the disputed declarations for expert opinion to the Forensic Scientific Laboratory, Thiruvananthapuram. The application was vehemently opposed by the respondents 1 and 2, inter alia, on the ground that the application is filed on an experimental basis with the sole intention to protract the recovery proceedings.

The Tribunal, after appreciating the rival pleadings by the impugned Ext.P16 order has held thus:-

“5. In this particular case the availing of loan and execution of the documents by the borrower and the guarantor is not at all disputed. Now the applicant alleged that one of the declarations produced by the defendants was not executed by Smt.Meenakumari.R and her signature is fabricated.The said guarantor Smt.Meenakumari.R has not disputed her signature appearing in the document filed by the defendants. All these questions would be considered at the time of hearing the SA on merit. As discussed earlier the scope of adjudication before this Tribunal is very limited. Therefore, there is absolutely no necessity in sending any document to Forensic Scientific Laboratory for examination by the hand writing expert. In view of the forgoing reason the I.A No.1094/2023, having no merit, is hereby rejected.”

Dis-satisfied with Ext.P16 order, the petitioner filed a review petition which was also resisted  by  the respondents  1  and  2  and  the Tribunal by Ext.P21 order held thus:

“5. This Tribunal is conscious of its confines and also the permissible Scope of enquiry under S.17(1) of the SARFAESI Act, wherein it is required to determine as to the legality or otherwise of the measures taken by the secured creditor under S.13(4) of the Act. After careful consideration of the submissions and perusing the materials available on record, the Tribunal had come to a conclusion that the Guarantor Smt. Meenakumari.R has not disputed her signature appearing on the documents filed by the defendants. All these questions would be considered at the time of hearing of the SA. The question raised by the applicant was not decided conclusively at the stage of hearing of the IA which would be considered at the time of hearing of the SA on merit. Accordingly it was held that there is no merit in the contentions put forth by the applicant in IA No.1094/2023 and hence the same was rejected as per the impugned order dated 11.04.2023. Merely because some additional documents filed with a memo dated 10.04.2023 were not referred; it cannot be said that there is apparent error in the impugned order to invoke the power of review.

(emphasis given)

On an analysis of the findings of the Tribunal in Exts.P16 and P21 orders, it undoubtedly establishes that the Tribunal has only deferred the question regarding the genuineness of Exts.P10 and P10A declarations purportedly signed by Meenakumari.R with the determination of the securitisation application. The Tribunal has in unequivocal terms held that it would consider the said question at the time of consideration of S.A.

In addition to the above, I also find sufficient force in the contention of Sri.Sunil Shanker that, if Meenakumari.R has a case that her signatures are forged on Exts.P10 and P10A, it is for her  to  come  forward  and  put  up  such  a  plea.

Nonetheless, I am of the view that the petitioner can always raise the said contention, so far as when recovery proceedings are initiated against the properties covered by the alleged forged declarations, but subject to the condition that Meenakumari establishing and proving that she has not executed the declarations as sworn by her in Ext.P13 affidavit. If the petitioner can shift the initial onus of proof and prima facie prove its case on the said point then Tribunal would be at liberty to exercise its powers under Section 73 of the Indian Evidence Act, 1872 and compare the signatures on Exts.P10, P10A and P12. If the Tribunal is convinced and satisfied of the case putforth by the petitioner, then the Tribunal may, in its discretion, refer the disputed document for expert opinion.

It is to be remembered that the expert opinion is one of the weakest forms of evidence, which is only to be accepted with due care and circumspection.

It is trite; that the supervisory powers of this Court is not to correct every error of fact or even a legal flaw. The power under Article 227 of the Constitution of India is to be exercised sparingly and only in appropriate cases, to keep the Courts/Tribunals within their bounds of its authority and avoid miscarriage of justice.

As already observed, since the Tribunal has only deferred the decision to consider the question as to whether Exts.P10 and P10A declarations are forged or not, I do not find any error or illegality in the in the impugned orders warranting interference by this Court under Article 227 of the Constitution of India.

Resultantly, the original petition is disposed of, directing the Tribunal to consider the dispute raised by the petitioner regarding the signatures of Meenakumari.R on Exts.P10 and P10A declarations, at the appropriate stage and at the discretion of the Tribunal.