The High Court permitted petitioners to pay loan dues in monthly installments to keep bank recovery proceedings under the SARFAESI Act in abeyance, finding the Banking Ombudsman wrongly refused jurisdiction.
Permission to pay loan dues in ten equal monthly installments starting 10.03.2016 to keep bank recovery proceedings in abeyance.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
FRIDAY, THE 26TH DAY OF FEBRUARY 2016/7TH PHALGUNA, 1937
WP(C).No. 4350 of 2016 (P)
PETITIONER(S):
1. RENJU SEBASTIAN, AGED 41 YEARS, S/O. SEBASTIAN, PEEDIKAYIL HOUSE, CHETHIMATTOM, PALA P.O., KOTTAYAM-686 575.
2. MARYKUTTY SEBASTIAN, AGED 62 YEARS, W/O. SEBASTIAN, RESIDING AT PEEDIKAYIL HOUSE, CHETHIMATTOM, PALA P.O., KOTTAYAM-686 575.
BY ADVS.SRI.V.S.BABU GIREESAN SRI.BENHUR JOSEPH MANAYANI
RESPONDENT(S):
1. BANKING OMBUDSMAN, C/O. RESERVE BANK OF INDIA, BAKERY JUNCTION, THIRUVANANTHAPURAM-695 033.
2. THE MANAGER,
BY SRI.PAULY MATHEW MURICKEN,SC
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
PJ
WP(C).No. 4350 of 2016 (P)
APPENDIX
PETITIONER(S)' EXHIBITS
RESPONDENT(S)' EXHIBITS
NIL.
/ TRUE COPY /
P.S. TO JUDGE
PJ
A.K.JAYASANKARAN NAMBIAR, J.
W.P.(C) No.4350 of 2016
JUDGMENT
The petitioners, who had availed a cash credit facility as also a term loan from the respondent bank, defaulted in repayment of the same. Consequently, the respondent bank initiated proceedings under the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter referred to as the 'SARFAESI Act', to recover the loan amounts. The petitioners approached the banking Ombudsman with a prayer for the extension of an instalment facility, to discharge their liability. By Ext.P3 order, the banking Ombudsman, refused to act on the complaint citing clause 9(3)(d) of the Banking Ombudsman scheme 2006, which states that 'no complaint to the Banking Ombudsman shall lie if it pertains to the same cause of action, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or Award or order has been passed by an such forum'. It is the case of the petitioners that since no proceedings are pending before any court, tribunal or arbitrator or any other forum and the respondent bank had only issued a 13(2) notice, and subsequently a S.13(4) notice, Ext.P3
W.P.(c).No.4350 of 2016
: 2 :
order is vitiated on an erroneous reasoning given by the Banking Ombudsman.
(i) The total outstanding amount, in respect of the cash credit facility, is stated to be Rs.17,90,229/- together with accrued interest. Similarly, the overdue amount in the term loan account is stated to be Rs.77,893/-. Accordingly, if the petitioner remits the total amount of
W.P.(c).No.4350 of 2016
: 3 :
Rs.18,68,122/- together with accrued interest from 01.02.2016 and other charges in ten equal and successive monthly installments commencing from 10.03.2016, and continues to keep up the regular installment payments as per the original loan schedule in the term loan account, then the recovery steps initiated against them by the respondent bank shall be kept in abeyance.
(iii)The respondent bank shall furnish the petitioners with an up-to-date statement of the dues position, within 10 days from today, so as to enable the petitioners to effect repayment as per the directions in this judgment.
Sd/-
A.K.JAYASANKARAN NAMBIAR JUDGE
sm/
2 issues framed by the court
Whether the Banking Ombudsman order refusing to entertain the complaint under clause 9(3)(d) of the scheme was sustainable in the absence of pending court proceedings.
Whether the banking recovery proceedings can be kept in abeyance if the petitioners remit dues in monthly installments.
2 provisions across 2 enactments
Renju Sebastian
Marykutty Sebastian
Banking Ombudsman
The Manager, Canara Bank, Pala
A.K.Jayasankaran Nambiar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
