Allowed

Halim.a.K v. Housing Development Financial Corporation Ltd.

Kerala HC11 Aug 2014WP(C)/1142/2014

Case brief

AI extract

What is this about?

Pertaining to recovery proceedings under the SARFAESI Act for a dispute over a home loan, the Court directed the petitioner to pay outstanding dues and future interest. The Bank was directed to provide a statement of accounts, and the winding-up of the writ petition was allowed.

What did the court decide?

Petitioner directed to pay Rs.1,13,442 plus subsequent interest within two months; Bank directed to issue statement of accounts.

Halim.a.K Vs Housing Development Financial… — Contract and Commercial Disputes | Kerala HC (2014)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

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MONDAY, THE 11TH DAY OF AUGUST 2014/20TH SRAVANA, 1936

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WP(C).No. 1142 of 2014 (P)

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PETITIONERS:

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HALIM.A.K, S/O.LATE A.K.KHALID, AGED 64, RESIDING AT SOUDA MANZIL, EROOR NORTH, TRIPUNITHURA - 682 306.

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BY ADVS.SRI.P.R.RAJA, SRI.P.C.CHACKO.

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RESPONDENTS:

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1. HOUSING DEVELOPMENT FINANCIAL CORPORATION LTD., H.D.F.C HOUSE, RAVIPURAM, M.G.ROAD, ERNAKULAM, REPRESENTED BY ITS GENERAL MANAGER - 682 016.

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2. THE MANAGER (OPERATIONS), HOUSING DEVELOPMENT FINANCIAL CORPORATION LTD., H.D.F.C HOUSE, RAVIPURAM, M.G.ROAD, ERNAKULAM - 682 016.

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3. THE AUTHORISED OFFICER, HOUSING DEVELOPMENT FINANCIAL CORPORATION LTD., H.D.F.C HOUSE, RAVIPURAM, M.G.ROAD, ERNAKULAM - 682 016.

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*ADDL. R.4. IMPLEADED:

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4. PRESTIGE ESTATE PROJECTS PVT. LTD., NO.32, BAY PRIDE MALL, MARINE DRIVE, KOCHI - 682 031, REPRESENTED BY ITS SENIOR VICE PRESIDENT, KERALA OPERATIONS.

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*IMPLEADED AS PER ORDER DTD. 22/01/2014 IN I.A. NO.1136/14.

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R1 TO R3 BY SRI.K.K.CHANDRAN PILLAI, SENIOR ADVOCATE, ADVS.SRI.THOMAS JAMES MUNDACKAL, ADDL.R4 BY ADVS.SRI.V.ABRAHAM MARKOS, SRI.BINU MATHEW SRI.TOM THOMAS (KAKKUZHIYIL) SRI.ABRAHAM JOSEPH MARKOS SRI.ABRAHAM VARGHESE THARAKAN

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Prv.

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W.P.(C).NO.1142/2014 - P:

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXHIBIT P1: COPY OF THE LOAN AGREEMENT DATED 31//3/2008 ENTERED INTO BETWEEN THE PETITIONER AND 2ND RESPONDENT.

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EXHIBIT P2: COPY OF THE REPRESENTATION DATED 31/7/2013 SENT BY THE PETITIONER TO THE 1ST RESPONDENT.

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EXHIBIT P3: COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 3/9/2013.

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EXHIBIT P4: COPY OF THE LAWYER NOTICE DATED 11/10/2013 ISSUED BY ADVOCATE CARLTON THOMAS TO THE PETITIONER.

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EXHIBIT P5: COPY OF THE DEMAND NOTICE UNDER SECTION 13(2) OF THE S.A.R.F.A.E.S.I ACT PUBLISHED IN MATHRUBHUMI DAILY DATED 20/11/2013.

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EXHIBIT P6: COPY OF THE REPRESENTATION DATED 25/11/2013 SUBMITTED BY THE PETITIONER TO THE 3RD RESPONDENT.

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EXHIBIT P7: COPY OF THE REPLY GIVEN BY THE 3RD RESPONDENT TO THE PETITIONER DATED 2/12/2013.

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EXHIBIT P8: COPY OF THE CHEQUE DTD. 27/03/2014 ISSUED BY THE PETITIONER TO THE RESPONDENT.

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EXHIBIT P9: COPY OF THE STATEMENT OF ACCOUNT FOR THE PERIOD 1.4.2013 TO 27.3.2014 OF THE PETITIONER.

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EXHIBIT P10: COPY OF THE E-MAIL COMMUNICATION ISSUED BY THE SAID SYAM K. MOHAN DTD. NIL TO THE PETITIONER.

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EXHIBIT P11: COPY OF THE E-MAIL COMMUNICATION ISSUED TO THE PETITIONER.

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EXHIBIT P12: COPY OF THE E.M.I CALCULATOR FOR THE LOAN IN INDIA INTEREST AT THE RATE OF 13.25%.

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EXHIBIT P13: COPY OF THE LETTER ISSUED BY THE AUTHORISED SIGNATORY OF THE 1ST RESPONDENT DTD. 02/05/2014.

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EXHIBIT P14: COPY OF THE CHEQUE FOR AN AMOUNT OF RS.54,109/DTD. 19/05/2014 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT.

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EXHIBIT P15: COPY OF THE CHEQUE FOR AN AMOUNT OF RS.1,36,106/DTD. 30/05/2014 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT.

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RESPONDENTS' EXHIBITS: NIL.

//TRUE COPY//

P.A. TO JUDGE.

Prv.

K. VINOD CHANDRAN, J.

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=====================

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W.P.(C) No. 1142 of 2014 ====================== Dated this the 11^th day of August, 2014

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J U D G M E N T

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The petitioner is aggrieved by the recovery proceedings initiated under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002, which recovery was initiated under Section 13(2), notice evidenced by Ext.P5. In fact, what led to the issuance of the SARFAESI proceedings, was a dispute between the petitioner and the builder, who is the additional 4^th respondent herein.

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The respondent Bank, had sanctioned home loan for Rs.1,04,75,000/- to the petitioner herein, for purchase of an apartment, in a complex, which was being constructed by the additional 4^th respondent herein. The loan was sanctioned on the assurance of the petitioner and the additional 4^th respondent that on completion of the apartment and on execution of sale deed, in favour of the petitioner, mortgage would be created of the said property

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W.P.(C) No. 1142 of 2014

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with the respondent Bank.

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Dispute having arisen between the petitioner and the additional 4^th respondent; petitioner directed the Bank to stop payment to the additional 4^th respondent. At that point of time, already an amount of Rs.74,26,000/- was disbursed by the Bank, to the additional 4^th respondent for construction of the apartment complex. At the time of sanctioning of the loan, no security interest could be created on the property, in which the complex, and the apartment was intended to be constructed. Hence, the petitioner had offered a property at Pallikkara (Village), as collateral security for the loan availed. The Bank sanctioned the loan on such mortgage.

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4.The petitioner having interdicted disbursal of the loan amounts, which as per the agreement, were to he paid to the builder and the substitutional disbursals already made having not been cleared; the respondent Bank was constrained to proceed against the property mortgaged to the Bank. So much is indicated by Ext.P5. The petitioner then approached this Court and this Court made conditional

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W.P.(C) No. 1142 of 2014 3

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orders, which admittedly has been complied with by the petitioner by deposit of more than Rs.13,00,000/-. Subsequent to that, and when the Writ Petition was pending, the petitioner approached the respondent Bank to permit the petitioner to convert the pre-EMI paid, as equated monthly instalments (EMI) for the amounts disbursed till date, as also for continuing payment of the EMI. That was allowed by Ext.P13.

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The petitioner's submission is that, Ext.P13 was not in consonance with the request made by the petitioner. When the petitioner had sought for conversion of pre-EMI paid from 2013 onwards, the Bank has rejected the request and directed payment of the EMI from 01.04.2014. It may not be proper for this Court to interfere with the same since it is the financial wisdom of the Bank which regulates formulation of schemes in mitigation of hardship of the borrowers. In any circumstance, what has to be looked into is, whether Ext.P13 has been complied with. There is considerable dispute with respect to that. The petitioner asserts that as per the reply affidavit filed dated

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W.P.(C) No. 1142 of 2014 4

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27.06.2014, he had made considerable payments, which would clear the arrears due as on 30.06.2014. However, the learned Senior Counsel appearing for the respondent bank would dispute the same specifically pointing to paragraphs 3 and 4 of the statement filed by the respondent Bank dated 27.06.2014. As per the statement, the decision to permit the petitioner to pay EMI from 01.04.2014, was on condition of the arrears in the pre-EMI being settled before that. The pre-EMI amounts having not been paid in full, there was remaining due an amount of Rs.25,386/- along with EMI for the month of April and total arrears as on 30.04.2014, according to the Bank was Rs.1,65,776/-. The Bank in its statement also admits that the petitioner had made further payment in the Month of May, which was adjusted to the said arrears and there was remaining an excess amount of Rs.24,439/-, which could be adjusted in the EMI falling due on 31.05.2014. The petitioner having not remitted the balance amounts for May, again there was arrears due, which according to the Bank, payable as on 31.05.2014, was Rs.1,13,442/-. It is also submitted by the

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W.P.(C) No. 1142 of 2014

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learned Counsel for the petitioner that EMI for the future months have been remitted regularly.

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In such circumstance, the petitioner shall pay an amount of Rs.1,13,442/- plus the subsequent interest within a period of two months from today. The Bank shall within 15 days from the date of the receipt of a certified copy of this judgment issue a statement of accounts with respect to the total dues in the account showing credit of all the amounts paid by the petitioner and the appropriation made thereto as also the future interest on the arrears due. The petitioner shall make the deposit within two months and if petitioner has any dispute with respect to the computations made by the Bank in the statement issued to the petitioner, the petitioner shall take appropriate proceedings for the same. However, the dispute if at all raised; shall not deter the petitioner from making the deposit as directed by this Court as also satisfying the future EMI as agreed to by the petitioner.

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The learned Senior Counsel would submit that, in fact the sanction for payment of EMI was agreed with by

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W.P.(C) No. 1142 of 2014

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the respondent Bank only on the petitioner withdrawing its contention about the mortgaged property, being an agricultural property. The petitioner has filed I.A No.7987 of 2014, wherein, he has specifically withdrawn such contention. It is only proper that the said affidavit be recorded and this Court do so. The Bank hence will not be interdicted from proceeding against the property mortgaged, under the SARFAESI Act against the property mortgaged; especially in the circumstance of the Bank having not yet obtained security interest in the apartment for purchase of which the loan was sanctioned.

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The Writ Petition is disposed of, reserving the rights of both parties to proceed in accordance with law subject to the undertakings made by the petitioners and respondents herein.

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K. VINOD CHANDRAN, JUDGE

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Halim.a.K v. Housing Development Financial Corporation Ltd.

Case brief

What is this about?

What did the court decide?

Halim.a.K v. Housing Development Financial Corporation Ltd.

Case brief

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