IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.02.2017 CORAM:
THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE M.GOVINDARAJ
Writ Petition No.1682 of 2017 W.M.P.No.1650 of 2017
K.Natarajan Petitioner vs.
The Branch Manager, Canara Bank, Karumathampatti Branch, Coimbatore. Respondent Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Mandamus, directing the respondent to release the petitioner's vehicles, (1) Renault Duster, bearing Registration No.TN 38 BW 1444 and (2) Mahindra Bolero Pick Up Van, bearing Registration No.TN 38 BW 2535.
For Petitioner : Mr.J.Pothiraj For Respondent : Mr.Sethuraman for M/s.T.S.Gopalan
ORDER
[Order of the Court was made by S.MANIKUMAR, J] The petitioner has sought for a Mandamus, directing the respondent to release their vehicles, (1) Renault Duster, bearing Registration No.TN 38 BW 1444 and (2) Mahindra Bolero Pick Up Van, bearing Registration No.TN 38 BW 2535.
2. On 09.02.2017, we passed the following orders: "Material on record discloses that N.Manimegalai, W/o.K.Natarajan, has availed a vehicle loan Account No.3437768000008, for a sum of Rs.5,60,000/-, on 12/12/2013, as Term Loan facility, for the purpose of purchase of vehicle, viz., Mahindra Bolero Pickup vehicle, bearing Registration No.TN38BW-2535 and stated to have committed default.
2. Canara Bank, Coimbatore, has issued a notice, dated 22/12/2016, to Manimegalai/borrower, to pay a sum of Rs.3,50,221/- as on 21/12/2016, with further interest, incidental expenses, legal charges etc, on or before 30/12/2016, failing which the Bank would proceed with the sale of the said vehicle by private treaty or by public auction towards realisation of the said dues.
3. Material on record further discloses that Natarajan/borrower, has availed a vehicle loan Account No.3437604000053 for a sum of Rs.8,50,000/- on 31/12/2013, as Term Loan facility, for the purpose of purchase of vehicle viz., Renault Duster car, bearing Registration No.TN38BW-1444 and stated to have committed default.
4. Canara Bank, Coimbatore, has issued another notice, dated 22/12/2016, to Natarajan/borrower, to pay a sum of Rs.5,70,266/- as on 21/12/2016, with further interest, incidental expenses, legal charges etc, on or before 30/12/2016, failing which the Bank would proceed with the sale of the said vehicle by private treaty or by public auction towards realisation of the said dues.
5. Mr.Natarajan, as Proprietor of M/s. Sri Krishna Food Products, Coimbatore, has availed loan from Canara Bank, Coimbatore District, by mortgaging properties. As on 15/9/2016, a sum of Rs.2,04,51,268.71 was not paid. Hence, on 30/6/2016, Loan Account Nos.3437768000008 and 3437604000053 have been declared as Non-Performing Assets (NPA). Bank has issued a Notice under Section 13 (2) of the SARFAESI Act, 2002, demanding payment of Rs.2,04,51,268.71, with further interest and incidental expenses and costs, to be paid within sixty days, from the date of notice, failing which action under Section 13 (4) (a) of the SARFAESI Act, would be taken.
6. On behalf of Mr.K.Natarajan, reply dated 4/11/2016, is stated to have been sent under Section 13 (3) (A) of the SARFAESI Act, 2002. According to Mr.K.Natarajan/writ petitioner, there is no response from the Bank.
7. In the supporting affidavit to the instant writ petition, contention has been made that for the default in making payment of Rs.2,04,51,268.71, for which a Notice, dated 17/8/2016, under Section 13 (2) of the SARFAESI Act, 2002 has been issued, Canara Bank, Coimbatore, is now attempting to bring the vehicles for auction. Further contention has been made that the bank, vide Notice, dated 22/12/2016, has informed Mr.Natarajan/writ petitioner that the vehicle bearing Registration No.TN38BW-1444, is in constructive possession and therefore, they have a right to sell. On the very same lines, Manimegalai has been issued with a Notice, dated 22/12/2016.
8. According to Mr.J.Pothiraj, learned counsel for the writ petitioner, in as much as the vehicles are in Hypothecation, it is a secured asset and therefore, the secured creditor Canara Bank, Coimbatore, can take recourse to any action, only by invoking the provisions of the said Act and cannot sell the vehicles on their own. Placing reliance on the decision of the Hon'ble Supreme Court in ICICI Bank Ltd., Vs. Prakash Kaur and Others {(2007) 2 Supreme Court Cases 711}, further contention has been made that recourse of the Banks by seizure and sale, have been held as impermissible.
9. On 24/1/2007, we ordered notice to the respondent, through Court and privately returnable by 31/1/2017. Mr.J.Pothiraj, learned counsel for the writ petitioner, submitted that though private notice was taken, postal acknowledgement was yet to be received. Subsequently, on 9/2/2017, when the matter came up for further hearing, submission was made that private notice ordered, has been served, and time was granted to file proof. Accordingly, proof affidavit, dated 9/2/2017, has been filed. Though the name of the respondent Canara Bank, Branch Manager, Karumathampatti Branch, Coimbatore, has been shown in today's cause list, there is no appearance either in person or through pleader. As on today, there is no objection and being satisfied with the material on record, we are inclined to grant interim injunction, restraining Canara Bank from auctioning the vehicles, viz., Mahindra Bolero Pickup vehicle, bearing Registration No.TN38BW-2535 and Renault Duster car, bearing Registration No.TN38BW-1444, on condition to make payment of a sum of Rs.2,00,000/- (Rupees Two lakhs only) and Rs.1,00,000/- (Rupees One lakh only), within a period of two weeks, from today, in respect of loan account Nos.3437768000008 and 3437604000053, respectively, failing which, interim order granted today, shall stand vacated, automatically, without any further reference to this Court.
10. Post on 24/2/2017."
3. On this day, when the matter came up for further hearing, Mr.J.Pothiraj, learned counsel for the petitioner submitted that the conditional order has been complied with.
4. However, based on the plaint in O.S.No.1739 of 2016 and supporting affidavit in I.A.No.992 of 2016 in the said suit, Mr.Sethuraman, learned counsel appearing for the Canara Bank, Karumathampatti Branch, Coimbatore, submitted that for the very same relief sought for, in the instant writ petition, the petitioner has filed the above suit and failed to obtain any interim order. He further submitted that filing of the suit and interim application have been suppressed in this writ petition. He also submitted that the petitioner has approached this Court with unclean hands and hence, he is not entitled to any equity.
5. Submission of the learned counsel for the respondent, though not supported with any affidavit, is not disputed by Mr.J.Pothiraj, learned counsel for the petitioner. In the form of typed set of papers, copy of the plaint in O.S.No.1739 of 2016 and affidavit, in the interim application, have been filed.
6. Prayer made in the suit in O.S.No.1739 of 2016, on the file of the District Munsif Court, Coimbatore, reads as follows:
"(i) granting a permanent injunction restraining the Defendant not to bring the plaintiffs' vehicles for auction subsequent to the expiry of 15 days from 02.11.2016, the period given by the Defendant in the final reminder notice and in the future days to come;
(ii) granting a mandatory injunction for the re-delivery of the plaintiffs' vehicles on the payment of overdue amounts in the plaintiffs both the loan accounts till date;
(iii) granting a mandatory injunction for the return of jewels that has been released by the plaintiffs from pledge but not return to them by the Defenant;
(iv) directing the defendant to pay cost of the suit."
7. Prayer made in I.A.No.992 of 2016 in O.S.No.1739 of 2016, is extracted hereunder:
"...... to pass an order of temporary injunction, restraining the respondent/defendant from proceeding to bring the vehicles, namely, Renault Duster RxL B S IV and Mahindra Bolero Pick Up FB PS MH 2 WD BS III, purchased by us, by availing loan from the respondent, to public auction after the expiry of the notice period given by the respondent by virtue of final remainder notices dated 02.11.2016 sent by him, an exparte order of ad-interim injunction to the same effect without notice to the respondent till the disposal of the above petition"
8. Prayer in the instant writ petition is similar to the prayer made in I.A.No.992 of 2016 in O.S.No.1739 of 2016. As rightly contended by the learned counsel for the Bank, there is absolutely no averments, about the filing of the suit and the interim application, in the supporting affidavit to the writ petition.
9. In Prestige Lights Ltd., v. State Bank of India reported in 2007 (8) SCC 449, at Paragraphs 27, 33, 34 and 35, held as follows:
"26. In Gorden v. Gorden, (1904) 73 LJ 41 : 90 LT 597 : 16 Dig 90, 1128, Cozens Hardy, L.J. put the principle succinctly in the following words; "I desire expressly to limit my judgment to a case in which the [party in contempt] is saying that the order complained of is outside the jurisdiction of the court, as distinguished from the case of an order which, although it is within the jurisdiction of the court, ought not, it is said, to have been made.
........
33. It is thus clear that though the appellant- Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter.
34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136], in the following words: "(I)t has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should made a full and fair disclosure of all the material facts, not law. He must not misstate the law if he can help the Court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement". (emphasis supplied) 34. It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a Writ Court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the Court, the Court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of Court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible."
10. In Arunima Baruah v. Union of India reported in 2007 (6) SCC 120, the Hon'ble Supreme Court held as follows:
"12. .......It is also trite that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands. But even if the said dirt is removed and the hands become clean, whether the relief would still be denied is the question.
13. In Moody v. Cox [(1917) 2 Ch. 71: (1916-17)
All ER Rep 548 (CA)], it was held: (All ER pp. 555 I-556 D) "When one asks on what principle this
is supposed to be based, one receives in answer the maxim that anyone coming to equity must come with clean hands. I think the expression “clean hands” is used more often in the textbooks than it is in the judgments, though it is occasionally used in the judgments, but I was very much surprised to hear that when a contract, obtained by the giving of a bribe, had been affirmed by the person who had a primary right to affirm it, not being an illegal contract, the courts of equity could be so scrupulous that they would refuse any relief not connected at all with the bribe. I was glad to find that it was not the case, because I think it is quite clear that the passage in Dering v. Earl of Winchelsea [(1787) 1 Cox Eq Cas 318: 2 Bos & P 270], which has been referred to, shows that equity will not apply the principle about clean hands unless the depravity, the dirt in question on the hand, has an immediate and necessary relation to the equity sued for."
14. In Halsbury’s Laws of England, 4th Edn., Vol. 16, pp. 874-76, the law is stated in the following terms: “1303. He who seeks equity must do equity.—In granting relief peculiar to its own jurisdiction a court of equity acts upon the rule that he who seeks equity must do equity. By this it is not meant that the court can impose arbitrary conditions upon a plaintiff simply because he stands in that position on the record. The rule means that a man who comes to seek the aid of a court of equity to enforce a claim must be prepared to submit in such proceedings to any directions which the known principles of a court of equity may make it proper to give; he must do justice as to the matters in respect of which the assistance of equity is asked. In a court of law it is otherwise: when the plaintiff is found to be entitled to judgment, the law must take its course; no terms can be imposed.
* * * 1305. He who comes into equity must come with clean hands.—A court of equity refuses relief to a plaintiff whose conduct in regard to the subject-matter of the litigation has been improper. This was formerly expressed by the maxim ‘he who has committed iniquity shall not have equity’, and relief was refused where a transaction was based on the plaintiff’s fraud or misrepresentation, or where the plaintiff sought to enforce a security improperly obtained, or where he claimed a remedy for a breach of trust which he had himself procured and whereby he had obtained money. Later it was said that the plaintiff in equity must come with perfect propriety of conduct, or with clean hands. In application of the principle a person will not be allowed to assert his title to property which he has dealt with so as to defeat his creditors or evade tax, for he may not maintain an action by setting up his own fraudulent design.
The maxim does not, however, mean that equity strikes at depravity in a general way; the cleanliness required is to be judged in relation to the relief sought, and the conduct complained of must have an immediate and necessary relation to the equity sued for; it must be depravity in a legal as well as in a moral sense. Thus, fraud on the part of a minor deprives him of his right to equitable relief notwithstanding his disability. Where the transaction is itself unlawful it is not necessary to have recourse to this principle. In equity, just as at law, no suit lies in general in respect of an illegal transaction, but this is on the ground of its illegality, not by reason of the plaintiff’s demerits.”
11. In T.Vijendra Doss v. M.Subramaniam reported in 2008 (1) LW 1 (SC), the Hon'ble Supreme Court held as follows:
"appellants and their predecessors, are also guilty of suppressio veri. Ordinarily, a statute shall prevail over the common law principle. However, in a case of this nature, in the event of any conflicting interest, this Court in exercise of its equity jurisdiction under Article 142 of the Constitution is to weigh the effect of a fraud and the consequences of non- impleadment of a necessary party. We would hold that the scale of justice weighs in favour of the person, who is a victim of fraud and thus, we should not refuse any relief in his favour, only because he might have been wrongly advised."
12. In Udayami Evan Khadi Gramodyog Welfare Sanstha v.
State of U.P., reported in 2008 (1) SCC 560, at Paragraph 16, the Hon'ble Supreme Court held as follows:
"15. A writ remedy is an equitable one. A person approaching a superior court must come with a pair of clean hands. It not only should not suppress any material fact, but also should not take recourse to the legal proceedings over and over again which amounts to abuse of the process of law. In Advocate General, State of Bihar v. M/s.Madhya Death Khair Industries and Anr. [1980 (3) SC 311, this Court was of the opinion that such a repeated filing of writ petitions amounts to criminal contempt."
13. Taking note of the conduct and attitude of the writ petitioner, in not furnishing true and proper facts to this Court, he is not entitled to any equity. Hence, the writ petition is dismissed. Consequently, the order of interim injunction is vacated. For the reasons stated supra the writ petitioner deserves costs, which is quantified at Rs.10,000/- to be paid, for the welfare of the children who require care and protection under the Juvenile Justice Act, 2015.
S. MANIKUMAR, J.
AND M.GOVINDARAJ, J.
skm
14. A sum of Rs.10,000/- is directed to be paid as Costs to the Director of Social Defence, Chennai, who shall deposit the same in appropriate account and expend the same for the welfare of the children. Costs to be paid within 10 days, from the date of receipt of a copy of this order, failing which, the Director of Social Defence, can take recourse under the Tamilnadu Revenue Recovery Act. Writ Miscellaneous Petition is also dismissed. Post this writ petition after 10 days, for compliance.
[S.M.K., J.] [M.G.R., J.] 24.02.2017 Index: Yes Internet: Yes skm