Dismissed

Varghese.M.O v. Authorised Officer

Kerala HC10 Oct 2018WP(C)/11289/2017

Case brief

AI extract

What is this about?

The court dismissed two writ petitions filed by borrowers challenging recovery proceedings under the SARFAESI Act. The judge held that the petitioners abused the process of the court by remaining defaulters and failing to pay installments despite an interim order permitting the creditor to proceed.

What did the court decide?

The writ petitions were dismissed with a cost of Rs. 5,000/- each.

Varghese.M.O Vs Authorised Officer — Money Laundering | Kerala HC (2018)

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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 DAMA SESHADRI NAIDU WEDNESDAY, THE 10TH DAY OF OCTOBER 2018 / 18TH ASWINA, 1940

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WP(C).No. 11289 of 2017

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PETITIONER/S:

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VARGHESE.M.O

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AGED 51 YEARS, S/O OUSEPH, MONDEY HOUSE, KORATTY SOUTH P.O., CHIRANGARA, THRISSUR-680308.

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BY ADVS.

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SRI.K.K.CHANDRAN PILLAI (SR.) SRI.B.S.SURESH KUMAR SRI.GEORGE SEBASTIAN

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RESPONDENT/S:

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1 AUTHORISED OFFICER

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SUNDARAM BNP PARIBAS HOME FINANCE LIMITED,SUDARAM TOWERS, 46, WHITE ROAD, CHENNAI600014.HAVING ITS REGISTERED OFFICE AT 21,PATTULLOS ROAD, CHENNAI-600002.

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2 BRANCH MANAGER

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SUNDARAN BNP PARIBAS HOME FINANCE LIMITED,D.NO.11/3597, 2ND FLOOR, ELIZABETH ALEXANDER MEMORIAL BUILDING, MARINE DRIVE (OPP. RAINBOWBRIDGE), ERNAKULAM, KOCHI-682031.

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3 NATIONAL HOUSING BANK CORE-5A, INDIA HABITAT CENTRE, LODHI ROAD, NEW DELHI-10003, REPRESENTED BY ITS GENERALMANAGER.

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BY ADVS.

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SRI.VARGHESE C.KURIAKOSE SMT.JISEMOL THOMAS SRI.VIVEK VARGHESE P.J.

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10.10.2018, ALONG WITH WP(C).11843/2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).Nos. 11289 &.11843 of 2017 2

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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 DAMA SESHADRI NAIDU

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WEDNESDAY,THE 10TH DAY OF OCTOBER 2018 / 18TH ASWINA, 1940

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WP(C).No. 11843 of 2017

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PETITIONER/S:

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ANNAM KUTTY

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AGED 80 YEARS, W/O.MATHAI, PURUTHIKADAN HOUSE, PULLUVAZHI PO, PERUMBAVOOR, KOCHI 683 541.

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BY ADVS. SRI.K.K.CHANDRAN PILLAI (SR.) SRI.B.S.SURESH KUMAR SRI.GEORGE SEBASTIAN

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RESPONDENT/S:

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1 AUTHORISED OFFICER SUNDARAM BNP PARIBAS HOME FINANCE LIMITED, SUNDARAM TOWERS, 46, WHITE ROAD, CHENNAI 600014,HAVING ITS REGISTERED OFFICE AT21, PATTULOS ROAD, CHENNAI 600002.

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2 BRANCH MANAGER

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SUNDARAM BNP PARIBAS HOME FINANCE LIMITED, D.NO.11/3597, 2ND FLOOR, ELIZABETH ALEXANDER MEMORIAL BUILDING, MARINE DRIVE (OPP. RAINBOW BRIDGE), ERNAKULAM, KOCHI 682 031.

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3 NATIONAL HOUSING BANK CORE -5A, INDIA HABITATE CENTRE, LODHI ROAD, NEW DELHI 110003.REP. BY ITS GENERAL MANAGER

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BY ADV. SRI.VARGHESE C.KURIAKOSE

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10.10.2018, ALONG WITH WP(C).11289/2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).Nos. 11289 &.11843 of 2017 3

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JUDGMENT

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[ WP(C) 11289/2017 ,WP(C).11843/2017 ]

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The petitioners, as the borrowers, defaulted on repaying their housing loans. Faced with the recovery proceedings under the SARFAESI Act, they have filed these writ petitions.

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This Court on 11.04.2017 passed this order:

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The respondent Bank can proceed with the proceedings by taking symbolic possession of the property and also proceed with the sale, subject to the result of the writ petition.

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True, the writ petitions have been pending for over 18 months. Even if

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the petitioners disregarded the recovery proceedings, they ought to have paid their monthly installments. But they have not paid even a rupee to this day.

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With the pending litigation looming large, no prospective purchaser came forward. So the respondent creditor could not bring the properties for sale. Therefore, it sought the Court to vacate the interim order or dispose of the writ petitions, at the earliest.

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To examine the scope of the writ petitions, I may extract the reliefs the petitioners have sought. In W.P.(C) No.11289/2017, the petitioner seeks the following reliefs:

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WP(C).Nos. 11289 &.11843 of 2017 4

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i) Issue a writ, order declaring that the proceedings pursuant to Ext.P4 and P5 demand notices under section 13(2) of the SARFAESI Act 2002 issued by the 1^st respondent is illegal arbitrary and unsustainable in law and quash the same.

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ii) Issue a writ, order or direction, directing the 3^rd respondent to take disciplinary action against the 1^st and 2^nd respondent in taking illegal steps to recover the amount against the clear direction issued as per Ext.P3 circular.

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iii) Issue a writ, order or direction, directing the 2^nd respondent to issue an account statement to the petitioner.

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Indeed, the Exts.P4 and P5 are the demand notices. Under Section

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13(2) of the SARFAESI Act, the petitioners seem to have replied to them. But that explanation failed to convince the creditor, so it went ahead. In fact, this Court, in its order, dated 11th April 2017, permitted the respondent financier to proceed further. At no point in time have the petitioners chosen to question before a competent forum any of the creditor's actions. On the contrary, ensconced with an interim order from this Court, the petitioners have blissfully ignored their obligation to pay even the monthly instalments.

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At any rate, the petitioners' counsel has taken two pleas: first, the respondent financier’s classifying the petitioners' account as NPA is illegal; second, by the Ext.P3 circular the respondent ought not to have proceeded with its recovery proceedings. To put the petitioners’ concerns in perspective, I may extract the Ext.P3 circular:

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WP(C).Nos. 11289 &.11843 of 2017 5

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It has been represented to us that consequent upon withdrawal of the legal tender status of the existing Rs.500 and Rs.1,000 notes (SBN) small borrowers may need some more time to repay their loan dues. Taking these representations into consideration, it has been decided to provide an additional 60 days beyond what is applicable for the Housing Finance Companies (HFCs) for recognition of a loan account as substandard in the case of :

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“Term loans(including the one granted to an agriculturist or to a person whose income is dependent on the harvest of crops). Whether business or personal, secured or otherwise, the original sanctioned amount whereof is Rs.1 crore or less, on books of Housing Finance Companies (HFCs).”

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The above dispensation will be subject to the following conditions:

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(I) It applies to dues payable between November 1, 2016 and December 31, 2016. HFCs shall note to ensure that this is a short-term determent of classification as substandard due to delay in payment of dues arising during the period specified above and does not result in restructuring of the loans.

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(ii) Dues payable before November 1 and after December 31, 2016, will be covered by the extant instruction with regard to recognition of NPAs.

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(iii) The additional time given shall only apply to defer the classification of an existing standard asset as substandard and not for delaying the migration of an account across subcategories of NPA.

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Evidently, the cricular refers to debtors representations and provides

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‘‘an additional 60 days beyond what is applicable for the Housing Finance Companies (HFCs) for recognition of a loan account as substandard’’. And that relief has been hedged with specific conditions. The creditor’s counsel contends that the petitioners' accounts were declared NPA long before the NHB issued the

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WP(C).Nos. 11289 &.11843 of 2017 6 Ext.P3 circular. At any rate, the period would last only 60 days, and that was over long back.

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As to the alleged illegal loan-classification, the petitioners have not sought any relief in these writ petitions.

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Under these circumstances, I reckon that the petitioners have abused the process and have remained defaulters without any justification.

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So I dismiss both the writ petitions, with a cost of Rs. 5,000/- each.

Sd/-

DAMA SESHADRI NAIDU

JUDGE

hmh

WP(C).Nos. 11289 &.11843 of 2017 7

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APPENDIX OF WP(C) 11289/2017

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1: TRUE COPY OF AWARENESS NOTICE DATED 7.11.2017 IN LOAN ACCOUNT NO.70007728 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P2: TRUE COPY OF AWARENESS NOTICE DATED 7.11.2017 IN LOAN ACCOUNT NO.70007308 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P3: TRUE COPY OF THE SAID CIRCULAR DATED 21.11.2016 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P4: TRUE COPY OF THE S.13(2) DEMAND NOTICE DATED 1.12.2016 IN LOAN ACCOUNT NO.70007728. EXHIBIT P5: TRUE COPY OF THE S.13(2) DEMAND NOTICE DATED 1.12.2016 IN LOAN ACCOUNT NO.70007308. EXHIBIT P6: TRUE COPY OF THE REPRESENTATION/OBJECTION ISSUED BY THE PETITIONER IN LOAN ACCOUNT NO.70007728. EXHIBIT P7: TRUE COPY OF THE REPRESENTATION/OBJECTION ISSUED BY THE PETITIONER IN LOAN ACCOUNT NO.70007308. EXHIBIT P8: TRUE COPY OF THE REPLY ISSUED BY THE IST RESPONDENT IN LOAN ACCOUNT NO.70007728. EXHIBIT P9: TRUE COPY OF THE REPLY ISSUED BY THE IST RESPONDENT IN LOAN ACCOUNT NO.70007308. EXHIBIT P10 : TRUE COPY OF AWARENESS NOTICE DATED 13.09.2017 IN LOAN ACCOUNT NO. 70007728 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P11 : TRUE COPY OF AWARENESS NOTICE DATED 13.09.2017 IN LOAN ACCOUNT NO.70007308 ISSUED BY THE 2ND RESPONDENT.

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WP(C).Nos. 11289 &.11843 of 2017 8

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APPENDIX OF WP(C) 11843/2017

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF SAID CIRCULAR DATED 21.11.2016 ISSUED BY THE 3RD RESPNDENT

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EXHIBIT P2 TRUE COPY OF THE S.13(2) DEMAND NOTICE DATED 1.12.2016 IN LOAN ACCOUNT NO. 70005768

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EXHIBIT P3 TRUE COPY OF THE REPRESENTATION/OBJECTION ISSUED BY THE PETITIONER IN LOAN ACCOUNT NO. 70005768 RESPONDENT'S NIL EXHIBITS

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//True copy//

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PA to Judge

Varghese.M.O v. Authorised Officer

Case brief

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Varghese.M.O v. Authorised Officer

Case brief

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