Disposed

Pothan Thomas v. the Kerala State Co-Operative Bank Ltd.

Kerala HC13 Dec 2023WP(C)/1495/2023

Case brief

AI extract

What is this about?

In a petition challenging coercive proceedings under SESA 2002 initiated by the Kerala State Co-operative Bank for non-payment of loan installments, the court disposed of the writ by ordering the petitioner to clear the dues in 15 monthly installments, deferring coercive actions pending compliance.

What did the court decide?

Petitioner directed to pay total outstanding Rs. 93,38,958/- in 15 monthly installments starting 15.01.2024; coercive proceedings deferred upon compliance, liable to resume on default.

Pothan Thomas Vs the Kerala State… — Contract and Commercial Disputes | Kerala HC (2023)

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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 N.NAGARESH

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WEDNESDAY, THE 13TH DAY OF DECEMBER 2023 / 22ND AGRAHAYANA, 1945
WP(C) NO. 1495 OF 2023

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PETITIONER:

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POTHAN THOMAS
AGED 56 YEARS
S/O THOMAS, MUNDANILKUNATHIL HOUSE, KUTTIKKANAM PO,
PEERUMED TALUK, IDUKKI., PIN – 685531

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BY ADVS.
P.ANOOP (MULAVANA)
THANIMA S.

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RESPONDENTS:

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1 THE KERALA STATE CO-OPERATIVE BANK LTD, REPRESENTED BY ITS MANAGER, PB NO. 2, IDUKKI COLONY PO, IDUKKI., PIN - 685602

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2 THE AUTHORIZED OFFICER THE KERALA STATE CO-OPERATIVE BANK LTD, PB NO. 2, IDUKKI COLONY PO, IDUKKI., PIN – 685602

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BY ADVS.

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SRI.GILBERT GEORGE CORREYA, SC,

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
13.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO.1495 Of 2023
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JUDGMENT

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Dated this the 13^th day of December, 2023

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The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Kerala State Co-operative Bank Limited to the petitioner, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

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The Bank paid ₹40 lakhs to the petitioner and his father towards Mortgage Loan in the year 2011 and ₹16,25,000/- towards Over Draft in the year 2017. The petitioner states that though the petitioner made remittances promptly during the initial repayment period of the financial advance, he could not pay the repayment installments promptly later due to financial constraints. The repayment of loan and

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WP(C) NO.1495 Of 2023
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advance fell into arrears. It happened due to reasons beyond the control of the petitioner.

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Though the petitioner requested the Bank to permit the petitioner to repay the overdue amounts in easy monthly installments, the Bank authorities were not yielding. The authorities, instead started coercive proceedings invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Security Interest (Enforcement) Rules, 2002 and issued Ext.P1 notice.

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The petitioner states that he is still in a position to clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly installments. If the respondents

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are permitted to continue with the coercive proceedings and auction the secured assets provided by the petitioner, he will be put to untold hardship and loss.

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WP(C) NO.1495 Of 2023

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Standing Counsel entered appearance on behalf of the Bank and denied all the statements made by the petitioner. On behalf of the respondent, it is submitted that the loan was given to the petitioner in the year 2011 and 2017. The petitioner committed default in repaying the loan and maintaining the advance.

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The Bank repeatedly reminded the petitioner and required him to clear the dues. The petitioner deliberately omitted to do so. In the circumstances, the Bank had no other go than to proceed against the petitioner invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The impugned Ext.P1 notice was issued in these circumstances. The petitioner

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has not advanced any legal reasons to thwart the coercive proceedings initiated by the Bank.

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The Standing Counsel, however, submitted that if the petitioner is ready and willing to make a substantial payment

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WP(C) NO.1495 Of 2023
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soon and remit the total outstanding amount immediately thereafter, a short breathing time can be granted to the petitioner to clear the dues. The Standing Counsel submitted that the Mortgage Loan outstanding amount due to the Bank from the petitioner as on 13.12.2023 is ₹65,70,957/- and the total outstanding amount towards the Overdraft as on 13.12.2023 is 27,68,001/-.₹

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I have heard the counsel for the petitioner and the Standing Counsel representing the Bank.

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The specific case of the petitioner is that the petitioner has been making the repayment and maintaining the loan account initially. The default in repayment and maintenance of the loan occurred lately due to reasons beyond

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the control of the petitioner. The petitioner has provided substantial security which will safeguard the interest of the Bank.

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WP(C) NO.1495 Of 2023
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In the facts and circumstances of the case, I am inclined to dispose of the writ petition giving a short and reasonable time to the petitioner to clear off the liability.

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The writ petition is therefore disposed of with the following directions:

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(i) The petitioner shall remit the total outstanding amount of ₹93,38,958/- in 15 consecutive and equal monthly installments along with accruing interest and other Bank charges, if any. First of such installments shall be paid on or before 15.01.2024.

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(ii) If the petitioner commits single default in making payments as directed above, the respondent will be at liberty to continue with the coercive proceedings against the petitioner in accordance with law.

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WP(C) NO.1495 Of 2023

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(iii) If the petitioner makes payments as directed above, coercive proceedings, if any, against the petitioner shall stand deferred.

Sd/-

N.NAGARESH JUDGE

hmh

WP(C) NO.1495 Of 2023

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APPENDIX OF WP(C) 1495/2023

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PETITIONER EXHIBITS

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Exhibit p1THE POSSESSION NOTICE ISSUED BY THE
BANK DATED 10.01.2023

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WP(C) NO.1495 Of 2023

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Pothan Thomas v. the Kerala State Co-Operative Bank Ltd.

Case brief

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Pothan Thomas v. the Kerala State Co-Operative Bank Ltd.

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