The petitioner is aggrieved with the proceedings initiated by the 1st respondent-Bank against the property belonging to the respondents 3 to 6, a portion of which the petitioner claims to have purchased. 2. The brief facts are that, the 3rd respondent was the original borrower. Respondents 3 to 6, co-owners, together mortgaged the property to the 1st respondent and the loan was defaulted, pursuant to which recovery proceedings were initiated. In the meanwhile, it is stated that respondents 4 to 6 entered into an agreement with the petitioner to sell the property. The petitioner also approached the civil Court for specific performance. O.S.No.967 of 2008 filed against respondents 4 to 6 was decreed by Exhibit P2. The petitioner has also obtained the said property. But, however, the 7½ cents kept apart, as the share of the 3rd respondent, was not conveyed to the petitioner, since the 3rd respondent was not a party to the agreement. The petitioner prays WP(C).No.10827 of 2013 - 2 -
that the Bank may be directed to convey the property which is set apart for the 3rd respondent. The petitioner contends that by Rule 85 of the Kerala Co-operative Societies Rules, the Sale Officer could sell only that portion of the immovable property which would satisfy the debt.
3. That definitely is a discretion left with the Sale Officer, which discretion has to be exercised properly after judicious consideration of the facts. It is not clear as to whether the 7½ cents property belonging to the 3rd respondent is saleable and whether the same would satisfy the debt.
4. In the above circumstances, if sale proceedings are initiated, definitely the petitioner can raise such objection before the Sale Officer and the decision of the Sale Officer would govern the matter. However, it is made clear that an agreement entered into with the petitioner by respondents 4 to 6 or the petitioner having obtained conveyance of the property through a valid decree of specific performance cannot stand against the 1st respondent-Bank, since admittedly the 1st respondent-Bank is a prior mortgagee. That would not be extinguished and the liability WP(C).No.10827 of 2013 - 3 -
would definitely run with the property. The purchase of the petitioner would be subject to such mortgage. The petitioner would be entitled to satisfy the entire debt and then proceed for recovery from the original borrower or respondents 4 to 6 or even against the property which is set apart for the 3rd respondent.
5. The writ petition as of now is found to be devoid of merit. The Bank's interest in the property cannot be extinguished by the subsequent transaction. Any objection to the sale of the entire property could be made before the Sale Officer at the appropriate time; which he is bound to consider. A rejection of such prayer should be supported by reasons too. When the sale is proposed, the petitioner shall also be issued with a notice.
The writ petition would stand closed, with the above observation.
vku/-
Sd/- K.Vinod Chandran Judge ( true copy )