The court order declares the auction sale of the property void and asked Preetha to pay money to the bank to get back the land worth Rs 2 crore.

Relief after many years HC orders recovery of Preetha Shajis land
news Court Wednesday, February 20, 2019 - 10:47

Preetha and Shaji, the Ernakulam-based couple who had gone through a lot in the last 25 years in the name of a property they had pledged at a bank as guarantee, are finally relieved. The Kerala High Court has ordered that the property sold in an auction sale be recovered back and the couple pay an amount of Rs 43.5 lakh (4351362.85) to the bank within a month (by March 15), and an amount of Rs 1,89,000 to the party that purchased it. 

The couple have been protesting with the support of activists and members of the Anti-Sarfaesi People’s Movement for 600 days, to avoid the takeover of the 18 and a half cents of land they had and their eviction from the house, that had been attached by the bank. The land worth Rs 2 crore was sold in auction by the bank for Rs 37 lakh to a man called Ratheesh. The High Court has in its order declared this sale as void citing a period of more than three years having passed between the date of the recovery certificate (2009) and the sale (2014).

“I am happy about the verdict. We will somehow raise the amount to be paid to the bank and the auction purchaser and get our property back,” Preetha tells TNM. “We have gone through too much just for standing surety for a relative to get a loan of Rs 2 lakh from a bank. In the 25 years that passed, the education of my kids suffered, our family situation deteriorated, and my mother passed away, unable to bear the pain we went through. Those who supported us also suffered when 14 of them were remanded in custody for 22 days,” she says.

It is in 1994 that Sajan, a relative of the family, took a loan from the Lord Krishna Bank and Shaji had acted as surety, providing his property document as proof. But when Sajan didn’t return the loan, the couple landed in trouble. Shaji sold four cents of his land and paid half the loan amount – Rs 1 lakh – back. But the remaining amount kept piling up with interest in the years that passed. The Lord Krishna Bank merged with the Centurion Bank and later with the HDFC Bank. The amount swelled to Rs 20 lakh in 2005. But it is in 2014 that the auction sale happened and Ratheesh bought the property. Preethi has earlier told TNM that they were not even informed of the sale.

Also read: Forced eviction of a Kerala couple by bank rekindles fight against Sarfaesi Act

“The problem here is that the reason of making the sale void is because of three years having elapsed (in between the recovery certificate date and sale). But look at the interest that the bank had asked for, how quickly the original amount was piling up to several lakhs. The debtors (or in this case, guarantors) would not be able to return it. And since civil courts could not be approached in such cases, one is forced to go to the District Recovery Tribunal,” says Manuel, activist and office bearer of the Anti-Sarfaesi People’s Movement.

The DRTs were established under the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI Act), 1993, to facilitate the recovery of debts due to banks and financial institutions. Manuel and others believe that the DRT and the Sarfaesi Act are not going to help people like Preetha and Shaji. Preetha’s case had also rekindled the debate around the controversial Sarfaesi Act - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

Political parties should also do more than just visit the venue of protest and make empty promises, Manuel says. “Because we need more permanent solutions. As of now though, we could call this court order a people’s victory.”

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