Whether recovery proceedings in a co-owned property can be initiated against defaulter’s share in such property?

Admittedly, the property against which attachment proceedings is initiated by the 4th respondent is a co-ownership property belonging to the petitioner and her husband. No doubt, as per the provisions of Transfer of Property Act, 1882, (hereinafter called Act, 1882), against the share of the property of the defaulter proceedings can be initiated since the respective sharers are entitled to transfer their shares without specifying that the transfer is to take effect on any particular share or shares of the transferor as guided by Section 47 of Act, 1882. Therefore the contention advanced by learned counsel for the petitioner that a co-ownership property cannot be sold without effecting partition cannot be sustained under law. The share is also not specifically mentioned in Ext. P2 document, therefore it is clear that, the parties have got equal share over the property in question in accordance with the provisions of Section 45 of the Transfer of Property Act.

IN THE HIGH COURT OF KERALA

W.P.(C) No. 39599 of 2018

Decided On: 25.03.2019

 Shakeela C.K. Vs.  Tahsildar, Thamarassery and Ors.

Hon'ble Judges/Coram:

S.P. Chaly, J.

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Whether There Can Be Simultaneous Proceedings Under SARFAESI And Arbitration Act For Recovery Of Loan Arrears?

The only twist in the present case is that, instead of the recovery process under the RDDB Act, we are concerned with an arbitration proceeding. It is trite to say that arbitration is an alternative to the civil proceedings. In fact, when a question was raised as to whether the matters which came within the scope and jurisdiction of the Debt Recovery Tribunal under the RDDB Act, could still be referred to arbitration when both parties have incorporated such a clause, the answer was given in the affirmative.13 That being the position, the appellants can hardly be permitted to contend that the initiation of arbitration proceedings would, in any manner, prejudice their rights to seek relief under theSARFAESI Act.

31. The discussion in the impugned order refers to a judgment of the Full Bench of the Delhi High Court in HDFC Bank Limited vs. Satpal Singh Bakshi14 opining that an arbitration is an alternative to the RDDB Act. In that context, the learned Single Judge has rightly held that this Full Bench judgment does not, in any manner, help the appellants but, in fact, supports the case of the respondent. The jurisdiction of the Civil Court is barred for matters covered by the RDDB Act, but the parties still have freedom to choose a forum, alternate to, and in place of the regular courts or judicial system for deciding their inter se disputes. All disputes relating to the “right in personam” are arbitrable and, therefore, the choice is given to the parties to choose this alternative forum. A claim of money by a bank or a financial institution cannot be treated as a “right in rem”, which has an inherent public interest and would thus not be arbitrable.

32. The aforesaid is not a case of election of remedies as was sought to be canvassed by learned senior counsel for the appellants, since the alternatives are between a Civil Court, Arbitral Tribunal or a Debt Recovery Tribunal constituted under the RDDB Act. Insofar as that election is concerned, the mode of settlement of disputes to an arbitral tribunal has been elected. The provisions of the SARFAESI Act are thus, a remedy in addition to the provisions of the Arbitration Act. In Transcore vs. Union of India & Anr. (supra) it was clearly observed that the SARFAESI Act was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith. Liquidation of secured interest through a more expeditious procedure is what has been envisaged under the SARFAESI Act and the two Acts 13 HDFC Bank Limited v. Satpal Singh Bakshi- 2013 (134) DRJ 566 (FB) 14 2013 (134) DRJ 566 (FB) are cumulative remedies to the secured creditors.

33. SARFAESI proceedings are in the nature of enforcement proceedings, while arbitration is an adjudicatory process. In the event that the secured assets are insufficient to satisfy the debts, the secured creditor can proceed against other assets in execution against the debtor, after determination of the pending outstanding amount by a competent forum.

34. We are, thus, unequivocally of the view that the judgments of the Full Bench of the Orissa High Court in Sarthak Builders Pvt. Ltd. vs. Orissa Rural Development Corporation Limited15, the Full Bench of the Delhi High Court in HDFC Bank Limited vs. Satpal Singh Bakshi (supra) and the Division Bench of the Allahabad High Court in Pradeep Kumar Gupta vs. State of U.P16 lay down the correct proposition of law and the view expressed by the Andhra Pradesh High Court in M/s. Deccan Chronicles Holdings Limited vs. Union of India17 following the overruled decision of the Orissa High Court in Subash Chandra Panda vs. State of Orissa18 does not set forth the correct position in law. SARFAESI proceedings and arbitration proceedings, thus, can go hand in hand.

Reportable

Supreme Court - Daily Orders

M.D. Frozen Foods Exports Pvt. ... vs Hero Fincorp Ltd. on 21 September, 2017
Citation: AIR 2017 SC 4481,(2017) 16 SCC741

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Whether suit for recovery of loan which was advanced by cheque is maintainable as summary suit?

In such a case, the suit must be for recovery of money on a cheque drawn in favour of or endorsed to the plaintiff. A suit, however for recovery of a loan which was advanced by the plaintiff by a cheque is not a suit upon a cheque or a bill of exchange and as such is not maintainable as a summary suit. The contention of the Plaintiff that the suit is upon a bill of exchange was rejected.

Civil - Maintainability of Summary Suit - Order 37, Rule 2 of Code of Civil Procedure, 1908 - Hon’ble Chief Justice placed present Reference, pursuant to conflicting views of Single Judges and Division Benches - “Whether Summary Suit under Order 37, Rule 2 lies on (i) a settled account duly confirmed by Defendants; (ii) On a settled account which is not confirmed by Defendants; (iii) On an acknowledgment of liability; (iv) On honoured cheque; and (v) On a mere writing or a receipt - Held, summary suit would not lie on ‘a settled account’, which is not confirmed by Defendant and "on honoured cheque" - Summary suit lies where concluded contract exist in writing containing express or implied promise to pay - Written contract as contemplated in Order 37 need not be signed by both parties but then writing between parties must be such that certain agreement has been brought into existence and that claim made under such agreement to be indisputable - Where document is not duly stamped and defect is curable, summary suit will be maintainable - To imply a term, in contract as implied term, test laid down by Kim Lewison in 'Interpretation of Contract" is relevant, however, Court must take note that general presumption is, against implying of terms into written contract - Issue of implied promise to pay, necessarily depend on facts of each case - Summary suit lie on 'Settled accounts duly confirmed by Defendants in view of observations of Apex Court in Hiralal and Ors. v. Badkulal and Ors - Not possible to lay down any precise test as to when Summary Suit would lie on an acknowledgement, writing or receipt, which depend firstly on document itself, practice, usage and customs of trade as also facts of each case - By so holding it is not as if Defendant is denuded of his defences when he applies for leave to defend in view of judgments of Apex Court in Machalec Engineering and Manufacturers v. Basic Equipment Corporation and Sunil Enterprises v. S.B.I. Commercial and International Bank Ltd 

IN THE HIGH COURT OF BOMBAY

Summons for Judgment No. 1117 of 2003 in Summary Suit No. 1551 of 2003 

Decided On: 26.04.2007

Jyotsna K. Valia Vs. T.S. Parekh and Co.

Coram:

F.I. Rebello, V.K. Tahilramani and Abhay Shreeniwas Oka, JJ.

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