Gopinath P., J.

1. The petitioners have approached this Court challenging the proceedings initiated by the Recovery Officer attached to the Debts Recovery Tribunal-II, Ernakulam bringing certain properties which are now in the ownership of the petitioners (by virtue of Exts. P1 to P4 sale deeds) to sale, for recovery of amounts due from respondents 3 to 10. It is the case of the petitioners that the steps taken to bring the properties to sale without considering the request made by the petitioners for one-time settlement are bad in law.

2. The facts which are to be noted for the adjudication of this case may be briefly noticed. The petitioners purchased 29.35 acres of land from M/s. Eden Cardamom Estate, a partnership firm of which respondents 3 to 10 were partners. On 28.06.2011, the date on which Exts. P1 to P4 sale deeds were executed, the petitioners also entered into an agreement undertaking to repay the liability of Rs. 2,14,86,060/- due from M/s. Eden Cardamom Estate and its partners, to the UCO Bank along with future interest and costs etc. It is not in dispute before this Court that though the petitioners made some payments to clear the liabilities to the UCO Bank, they did not pay the entire amount due to the UCO Bank and consequently the Bank initiated proceedings before the Debts Recovery Tribunal by filing O.A. No. 226/2015 for recovery of the sum of Rs. 2,74,85,532.77 due under one term loan account and Rs. 7,08,533/- due under another term loan account together with future interest at the rate of 16.50% per annum with monthly rests from defendants 1 to 9 in the Original Application, namely, M/s. Eden Cardamom Estate and its partners. The petitioners being purchasers of the property mortgaged with the respondent Bank were also made parties to the Original Application as respondents 10 to 13. It appears that sometime in the month of March 2019, the petitioners approached the Bank with an offer for a one-time settlement which was rejected by the Bank stating that the petitioners have to improve their offer. OA. No. 226/2015 was subsequently allowed, permitting the respondent Bank to recover the amounts claimed in the Original Application along with future interest from 18.3.2015 from defendants 1 to 9 in the Original Application. The Recovery Certificate issued in terms of the final order dated 20.09.2019 indicates that the respondent Bank is at liberty to proceed against the mortgaged properties, including the properties purchased by the petitioners. Though the petitioners filed an appeal against the order of the Tribunal, the same came to be dismissed on account of reasons which are not readily discernible from the record. The petitioners carried the matter to the Supreme Court of India by filing SLP (C) No. 4847-4848 of 2022. The Supreme Court vide Ext. P13 order permitted the petitioners to withdraw the Special Leave Petition and permitted them to approach the Bank for availing the benefit of one-time settlement. The petitioners filed a request for availing one-time settlement, pursuant to Ext. P13 order. The said request made by the petitioners for settlement is on record as Ext. P14. The Bank has rejected the application through Ext. P.15 communication stating that the petitioners who are neither the borrowers nor the guarantors in respect of the loan have no right to claim that their application for one-time settlement should be considered by the respondent Bank. This stand taken by the respondent Bank which was reiterated in Ext. P.18 is essentially under challenge in this Original Petition. It also appears that one of the partners of M/s. Eden Cardamom Estate has filed a complaint alleging that the petitioners have cheated the erstwhile partners by promising to pay a total sum of Rs. 2,14,86,060/- to the Bank and by not doing so.

3. The learned counsel appearing for the petitioners would contend that the stand taken by the respondent Bank in Ext. P14 letter is fundamentally different from the stand taken by the Bank in Ext. P12 where the Bank had only requested the petitioners to improve the offer for one-time settlement. It is submitted that in Exts. P15 & P.18, the stand taken by the Bank is that the petitioners are neither borrowers nor guarantors and they cannot apply for one-time settlement. It is submitted that this is clearly contrary to Ext. P13 order of the Supreme Court in SLP Nos. 4847-4848 of 2022. It is submitted that the Bank was well aware of the fact that the properties in question were sold to the petitioners. It is submitted that the petitioners were even made parties to the Original Application filed by the Bank before the Debts Recovery Tribunal and it is not open to the respondent Bank to now contend that the petitioners are not borrowers or guarantors and no offer for one-time settlement can be made by the petitioners. The learned counsel places reliance on the judgment of the Supreme Court in Narayan Deorao Javle (Deceased) through Lrs v. Krishna & Ors.; AIR 2021 SC 3920, to support her contention. It is submitted that the Supreme Court, in the aforesaid judgment, has taken the view that even subsequent purchasers of mortgaged properties have a right in the matter notwithstanding the fact that they are neither borrowers nor guarantors. It is submitted that in the light of the declaration of law in Javle (supra), the Bank is liable to be directed to consider the application of the petitioners for a one-time settlement.

4. The learned counsel appearing for the respondent Bank would submit that the petitioners clearly have no right to request for one-time settlement. It is submitted that the original borrowers were found to be willful defaulters and therefore, the account cannot be settled under onetime settlement in terms of guidelines issued by the Reserve Bank of India on 3.9.2005. The judgment of a learned single Judge of Delhi High Court in Babusha International v. Canara Bank; 2008 KHC 7636 has been placed to contend that no borrower or other person can insist that the Bank should accept one-time settlement. The judgment of the Supreme Court in Indian Bank v. M/s. Blue Jaggers Estates Ltd. And others; 2010 KHC 4544 has been placed to contend that the Bank is a trustee of public funds and it cannot compromise public interest for benefiting private individuals. It is pointed out that the said decision is authority for the proposition that the Bank is bound to recover the amount due from borrowers by adopting all legally permissible methods. The judgment of the Supreme Court in Bijnor Urban Co-operative Bank Limited, Bijnor and others v. Meenal Agarwal and others; 2021 KHC 6846 is pressed into service to contend that there cannot be a direction to consider the grant of one-time settlement and if the borrower or any other person, who seeks the benefit of one-time settlement has the capacity to repay the amount due in full, the Bank would be justified in refusing to grant the benefit under the Scheme. It is submitted that the decision as to whether one-time settlement should be granted or not should be left to the commercial wisdom of the Bank and it should always be presumed that the Bank/Financial Institution will take a prudent decision in the matter of considering an application for one-time settlement.

5. Considering the issues raised in the writ petition, this Court had requested Adv. K.K. Chandran Pillai, Senior Advocate of this Court to assist the Court as Amicus Curiae. The learned Senior Counsel submits that the stand taken by the Bank in Ext. P15/P.18 communications that the petitioners cannot be considered eligible to apply for a one-time settlement cannot be sustained in law. He points out, with reference to the provisions of Sections 91 and 92 of the Transfer of Property Act, 1882 that the right of redemption is not restricted to the mortgagor alone and any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or any charge upon, the property mortgaged has a right to redeem the mortgage. It is submitted that the provisions of Section 92 of the Transfer of Property Act make it clear that any of the persons referred to in Section 91 (other than the mortgagor) on redeeming the property subject to the mortgage has the right of subrogation as provided for in Section 92. It is submitted that the provisions of Order XXXIV Rule 1 of the Code of Civil Procedure also make it clear that even subsequent purchasers of mortgaged properties have to be made parties in a suit for foreclosure sale and redemption. It is submitted that the question as to whether a subsequent purchaser has the right to redeem the mortgage has been considered by this Court in Muhammed Sherieff K.S. v. Registrar of Co-operative Societies and others; 2016 (2) KHC 665 [LQ/KerHC/2016/554] and it has been held that the absence of privity of contract in the person seeking to redeem the mortgage cannot be a ground to hold that the persons other than the borrower/mortgagor/guarantor cannot seek to settle the liability and redeem the mortgage. It is submitted that the question as to whether any one-time settlement should be extended to persons like the petitioners, in this case, is a matter for consideration by the Bank, it cannot be said that they have no right to seek one-time settlement especially, taking into consideration the fact that the Supreme Court in Ext. P13 order in SLP(C) Nos. 4847-4848 of 2022 had permitted them to approach the Bank for one-time settlement.

6. The learned counsel appearing for the respondent Bank would submit that the decision of this Court in Muhammed Sherieff (supra), was rendered on a completely different set of facts and the law laid down cannot apply to the facts of the present case. He also adds that the reliefs sought in the present petition cannot be granted in the exercise of jurisdiction of this Court under Article 227 of the Constitution of India.

7. The learned counsel for the petitioner states in reply that it is clear from the proceedings before this Court in O.P.(DRT) No. 146/2018 (Ext. P20 judgment) and subsequent proceedings before the Tribunal that there was a clear undertaking on the part of respondents 3 to 10 to clear the liability. It is submitted that though the order of the Tribunal requires the Bank to proceed against all properties, the Bank has chosen to proceed only against the properties purchased by the petitioners. It is submitted that the petitioners were purposefully not made parties to O.P.(DRT) No. 146/2018 and there is clear collusion between the officials of the Bank and the borrowers, to the detriment of the petitioners. It is submitted that the proceedings to bring the properties now belonging to the petitioners to sale is in violation of the procedure contemplated under the Second Schedule to the Income Tax Act, 1961. It is submitted that a petition was filed by the petitioners under Rule 11 of the Second Schedule to the Income Tax Act before the Recovery Officer but the same was arbitrarily and illegally rejected through Ext. P22 order. It is submitted that there is a clear failure to follow the procedure mandated by Rule 11 of the Second Schedule to the Income Tax Act.

8. I have considered the contentions raised. The first question to be considered is whether the reliefs sought in this Original Petition can be granted in a petition filed under Article 227 of the Constitution of India. The petitioners have essentially sought to set aside a sale proclamation made by the Recovery Officer. Proceedings of the Recovery Officer are to be challenged at least in the first instance by filing an appeal before the Debts Recovery Tribunal under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993. However, the petitioners have chosen to directly approach this Court by filing this Original Petition. The petitioners have also sought a direction to the respondent Bank to consider the grant of one-time settlement and for a declaration that the transaction entered into by the petitioners with respondents 3 to 10 with the knowledge of the respondent Bank is not a fraudulent transfer. Having regard to the above facts, I am clearly of the opinion that there is merit in the contention taken by the learned counsel for the respondent Bank that these reliefs are not those that can be granted in a petition under Article 227 of the Constitution of India. However, it settled law that mere nomenclature under which a petition is filed need not deter this Court from granting relief. In Pepsi Foods Ltd. and Another v. Special Judicial Magistrate and others, (1998) 5 SCC 749, [LQ/SC/1997/1443] the Supreme Court has held that nomenclature of petition or the provision of law quoted therein is not quite relevant and that does not debar the court from exercising jurisdiction otherwise possessed by it unless the procedure prescribed is mandatory. Therefore, I overrule the objection regarding maintainability and treat this petition as one filed invoking the jurisdiction of this Court under Article 226 of the Constitution of India.

9. The only question to be considered is whether the Bank was right in issuing Ext. P15/P18 communications refusing to consider the request made by the petitioners for one-time settlement, on the ground that the petitioners are neither the borrowers nor the guarantors and they have obtained the property by fraudulent means. On a reading of Section 91 of the Transfer of Property Act and Ext. P13 order of the Supreme Court and also taking into account the fact that the petitioners were parties to the Original Application filed by the Bank before the Debts Recovery Tribunal, I am of the view that the Bank is not right in taking the view that the petitioners are not entitled to apply for one-time settlement. It is clear that on an earlier occasion, the Bank had taken the stand that the offer for one-time settlement made by the petitioners could not be accepted as the offer was too low. There is a complete change of direction and the Bank has, in Ext. P15, taken the stand that the petitioners have no right whatsoever to apply for one-time settlement. I am fortified in taking the view that the petitioners can apply for one-time settlement in the light of the law laid down by the Supreme Court in Javle (supra) and by this Court in Muhammed Sherieff (supra). It needs to be clarified at this juncture that this Court has not rendered any finding that the petitioners are actually entitled to settle the liability under one-time settlement. As observed by the Supreme Court in Bijnor Urban Co-operative Bank Limited (supra), the question as to whether the one-time settlement has to be granted and whether the Bank must settle for an amount less than the amount that may be received by sale of the mortgaged assets etc., is a matter to be decided by the respondent Bank. Such a decision is entirely within the commercial wisdom of the respondent Bank and this Court cannot issue any direction to the respondent Bank to accept and grant to the petitioners a one-time settlement.

10. The contention taken by the learned counsel for the petitioners that the proceedings of the Recovery Officer were contrary to the provisions of the Second Schedule to the Income Tax Act does not appeal to this Court. It is clear from Ext. P5 that the petitioners had purchased the properties being fully aware of the fact that the property was mortgaged with the respondent Bank and after undertaking to clear the liabilities due to the respondent Bank, they cannot be heard to contend that they were unaware of the proceedings. They were parties to the Original Application. However, they choose to remain ex-parte. They took no earnest efforts to pay the amount which they had promised to pay (in Ext. P5) to settle the liabilities of the respondent Bank. The contention regarding the failure to follow the mandate of Rule 11 of the Second Schedule to the Income Tax Act which has been made applicable to the Recovery of Debts and Bankruptcy Act is clearly untenable. It is clear from the provisions of Section 29 of the Recovery of Debts and Bankruptcy Act, 1993 that the provisions of the Second and the Third Schedules to the Income Tax Act, 1961 and Income Tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, 'as far as possible', apply with necessary modifications as if the said provisions and the rules refer to the amount of debt due as determined under the provisions of the Act (Recovery of Debts and Bankruptcy Act), instead of to the Income Tax Act. It is clear from a reading of Rule 11 that an enquiry as contemplated in Rule 11 can apply only to properties of defaulters under the Income Tax Act and does not apply in respect of property which is the subject matter of mortgage to a Bank and in respect of which proceedings are initiated following a recovery certificate issued by the Debts Recovery Tribunal. This is because the property of an Income Tax defaulter is never a subject matter of any mortgage and if a third party claims any interest in the property, it is necessary for the Tax Recovery Officer to conduct an enquiry as to whether the property in question can be proceeded against for recovery of the amount due towards the Income Tax Department. However, in the case of a property that is mortgaged to secure a debt, any transfer of property is always subject to the mortgage and an enquiry as contemplated under Rule 11 is not required. The contention of the petitioners that the proceedings of the Recovery Officer through which the properties in question have been brought to sale are in violation of the procedure contemplated by the Second Schedule of the Income Tax Act, 1961 is devoid of any merits. It is held that the proceedings initiated by the Recovery Officer to bring the properties in question to sale are in consonance with the provisions of Second Schedule to the Income Tax Act, 1961. This view draws sustenance from the law laid down by the Supreme Court in Paramsivan C.N. and anr. v. Sunrise Plaza Tr. Partner and Ors; (2013) 9 SCC 460 [LQ/SC/2013/49] .

11. I see no merit in the contention taken by the learned counsel for the respondent Bank that since the original borrowers have been declared as willful defaulters, the petitioners also cannot be considered for a one-time settlement as I have found that the petitioners being subsequent purchasers of the mortgaged properties also have the right to apply for one-time settlement. In other words, the fact that the original borrowers are treated as willful defaulters cannot take away the right of the petitioners who are subsequent purchasers of the mortgaged properties to apply for one-time settlement.

12. In the light of the above findings, this original petition will stand disposed of directing the competent authority of the respondent Bank to consider whether any one-time settlement is to be offered to the petitioners without considering the fact that they are not borrowers/mortgagors or guarantors. This shall be done within a period of one month from the date of receipt of a certified copy of this judgment. I make it clear that I have not expressed any opinion on the entitlement of the petitioners to settle the liability under one-time settlement and it is open to the respondent Bank to consider whether the petitioners are entitled to receive any consideration under any one-time settlement scheme now in operation or dehors any running scheme, at the discretion of the Bank. In order to enable the consideration of the application for one-time settlement by the Bank, as directed above, Exts. P15 and P18 are quashed. All proceedings to sell the properties now belonging to the petitioners shall stand deferred till a decision is taken on the application made by the petitioners for one-time settlement. In the event that the bank does not offer any one-time settlement to the petitioners, they may be allowed to redeem the mortgage by paying the entire mortgage debt, taking into account the provisions of Section 91 of the Transfer of Property Act. If the petitioners so wish to redeem the mortgage, the said right shall be exercised within one week of the Bank informing the petitioner the amount to be paid for such redemption.

13. The Original Petition (DRT) is allowed to the extent indicated above. The assistance rendered to this Court by Sr. K.K. Chandran Pillai, Senior Advocate is invaluable and this Court records its sincere appreciation for the same.