Disposed

Shaijy Shibu v. State of Kerala

Kerala HC1 Sept 2022WP(C)/9870/2022

Case brief

AI extract

What is this about?

The High Court of Kerala disposed of a writ petition challenging SARFAESI proceedings initiated for recovery of term loans. Rejecting reliance on a newspaper report alleged to contain a Government order on property size, the Court directed the bank to accept repayment in 20 installments and regularize the account while keeping coercive proceedings in abeyance.

What did the court decide?

Directed the respondent bank to accept repayment of the overdue amount in 20 equated monthly installments and regularize the loan account; all coercive proceedings to be kept in abeyance.

Shaijy Shibu Vs State of Kerala — Banking and Recovery | Kerala HC (2022)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE GOPINATH P.

¶4

THURSDAY, THE 1ST DAY OF SEPTEMBER 2022 / 10 TH BHADRA, 1944
WP(C) NO. 9870 OF 2022

¶5

PETITIONER:

¶6

SHAIJY SHIBU

¶7

AGED 46 YEARS, W/O SHIBU,
KURUTHUKULANGARA KOOLA HOUSE, CHALAKUDY-680 307.

¶8

BY ADVS.

¶9

 JOHNSON JOSE PANJIKKARAN

¶10

 RIMJU P.H.

¶11

RESPONDENTS:

¶12

1 STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001.

¶13

2AUTHORISED OFFICER,
KERALA STATE CO-OPERATIVE BANK LTD, KOVILAKATHUMPADAM,
THIRUVAMBADY P.O.,THIRSSUR-680 022.
(ERSTWHILE THRISSUR DISTRICT CO-OPERATIVE BANK)

¶14

3 BRANCH MANAGER,

¶15

CHALAKUDY BRANCH, KERALA STATE CO-OPERATIVE BANK LTD,
CHALAKUDY-680 307,
(ERSTWHILE THRISSUR DISTRICT CO-OPERATIVE BANK)

¶16

OTHER PRESENT:

¶17

ADV. P.C.SASIDHARAN (SC), ADV. K.B. SONY (GP)

¶18

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
01.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶19

WP(C) NO. 9870 OF 2022 2

¶20

JUDGMENT

¶21

Petitioner has approached this Court challenging proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) for recovery of the amounts due upon two term loans availed by the petitioner.

¶22

The learned counsel for the petitioner states that in terms of Ext.P5 that there was a decision by the Government of Kerala that SARFAESI proceedings shall not be initiated in respect of properties which have an extent of less than 5 cents with residential house. It is submitted that since the Kerala Bank functions directly under the control of the Government of Kerala, they are bound by the terms of the said decision and proceedings initiated against the petitioner under the provisions of the SARFAESI Act are not maintainable. It is submitted that the petitioner had suffered huge loss in 2018 flood and as a result of which the petitioner was unable to pay

¶23

WP(C) NO. 9870 OF 2022 3

¶24

off the liability. It is submitted that the subsequent lockdown during Covid-19 pandemic resulted in further default being committed by the petitioner.

¶25

The learned counsel appearing for the respondent Bank states that there is no decision by the Government of Kerala regarding SARFAESI proceedings against the residential properties which have an extent of less than 5 cents. It is pointed out that Ext.P5 is only a newspaper report and the same cannot be relied upon in these proceedings. It was submitted on behalf of the respondent Bank that the petitioner committed default in repayment and the overdue amount as on 31-07-2922 is Rs.10,28,620/- (Rupees Ten Lakhs Twenty Eight Thousand Six Hundred and Twenty only). It was further submitted that though proceedings for recovery have been initiated, as a matter of indulgence, the respondent bank is willing to accept repayment of the overdue amount in limited installments and regularize the loan account.

¶26

WP(C) NO. 9870 OF 2022 4

¶27

The learned Government Pleader also submits

¶28

on instructions that there is no decision by the Government of Kerala as is reflected in Ext.P5.

¶29

I have heard Adv.Johnson Jose Panjikkaran, learned counsel for the petitioner, Adv.P.C.Sasidharan, the learned counsel for the respondent Bank and the learned Government Pleader for the State.

¶30

Having heard the learned counsel for the petitioner, learned counsel appearing for the respondent Bank and the learned Government Pleader, I am of the view that the petitioner is not entitled to any relief on account of Ext.P5. Even if the facts set out in Ext.P5 newspaper report were correct and the Government of Kerala had passed an order regarding initiation of SARFAESI proceedings by the respondent Bank, I am clearly of the view that the said decision cannot bind the respondent Bank as banking is exclusively a Central subject and it is settled law that the executive power of State is coextensive with that of its legislative power. Therefore no order issued by the Government of Kerala

¶31

WP(C) NO. 9870 OF 2022 5

¶32

can have any effect on SARFAESI proceedings initiated under the provisions of the SARFAESI Act. Having regard to the circumstances of the case and the situation now prevailing, apart from the submissions made as recorded above, I am of the view that the petitioner can be granted an opportunity to repay the overdue amount in 20 installments and thereafter, if the amount so directed is repaid within the time as directed above, to have the loan account regularized.

¶33

Accordingly, there will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.10,28,620/- (Rupees Ten Lakhs Twenty Eight Thousand Six Hundred and Twenty only) along with bank charges from the petitioner and regularize the loan account of the petitioner on the following conditions:

¶34

(i) The overdue amount of Rs.10,28,620/- (Rupees Ten Lakhs Twenty Eight Thousand Six Hundred and Twenty only) shall be repaid in 20 equated monthly installments along with any accrued interest and costs;

¶35

WP(C) NO. 9870 OF 2022 6

¶36

(ii) The first installment shall be paid on or before 30-09-2022. The subsequent installments shall be paid

¶37

on or before the last working day of the succeeding months;

¶38

(iii) Petitioner shall continue to pay the regular EMI’s along with the installments as directed above;

¶39

(iv) In the event of default of any one installment,

¶40

the respondent bank shall be entitled to proceed in accordance with law.

¶41

(v) In order to enable the petitioner to repay the entire amounts, all coercive proceedings shall be kept in abeyance.

¶42

The writ petition is disposed of as above.

¶43

Sd/GOPINATH P. JUDGE

¶44

ats

¶45

WP(C) NO. 9870 OF 2022 7

¶46

APPENDIX OF WP(C) 9870/2022

¶47

PETITIONER EXHIBITS

¶48

Exhibit P1TRUE COPY OF RELEVANT PAGES OF THE PASSBOOK OF THE
PETITIONER

¶49

Exhibit P2TRUE COPY OF THE RECEIPT DATED 23.3.2020

¶50

Exhibit P3TRUE COPY OF RECEIPT DATED 23.3.2020

¶51

Exhibit P4TRUE COPY OF 13(40 NOTICE DATED 7.3.2022

¶52

Exhibit P5TRUE COPY OF THE ARTICLE APPEARED IN DECCAN CHRONICLE
E-PAPER DATED 22.8.2017

Shaijy Shibu v. State of Kerala

Case brief

What is this about?

What did the court decide?

Shaijy Shibu v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Sundaram Home Finance Limited, Vs Sub Registrar

Shajahan Kunjumarakkar Vs South Indian Bank Ltd. Represented by Authorised Officer or Chief Manager

M/S Brothers Engineering Contractors Vs Union of India

Sabu Thomas, Vs Union of India

Diwaniya Furnishings Vs the GST Council

Alungal Chozhikutty Premanandan, Vs Authorized Officer