Remanded

Radhakrishnan Nair T.P. v. State Bank of India

Kerala HC4 Dec 2023WP(C)/3440/2020

Case brief

AI extract

What is this about?

Justice Devan Ramachandran ordered the State Bank of India to hear the petitioner and make a fresh decision on claims regarding the loan account's NPA classification and validity of a settlement payment, pending which recovery actions are stayed.

What did the court decide?

Petitioner to be heard by Bank; fresh decision on loan status required; recovery action stayed pending outcome.

Radhakrishnan Nair T.P. Vs State Bank of India — Banking and Recovery | 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 DEVAN RAMACHANDRAN

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MONDAY, THE 4TH DAY OF DECEMBER 2023 / 13TH AGRAHAYANA, 1945
WP(C) NO. 3440 OF 2020

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PETITIONER:

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RADHAKRISHNAN NAIR T.P., AGED 56 YEARS
S/O.PARAMESWARAN NAIR, THENGNAMANNIL HOUSE,
VAZHOOR P.O., KOTTAYAM DISTRICT, PIN-686504.

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BY ADVS.
P.M.JOSHI
SMT.SIJI K.PAUL

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RESPONDENTS:

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1 STATE BANK OF INDIA, KODUNGOOR BRANCH, KOTTAYAM DISTRICT, PIN- 686504.

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2 DEPUTY TAHASILDAR, CHANGANACHERRY TALUK, KOTTAYAM DISTRICT, PIN-686101.

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3 THE VILLAGE OFFICER, VAZHOOR VILLAGE, VAZHOOR P.O., VAZHOOR, PIN-686001.

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4 STATE OF KERALA, REPRESENTED BY ADDITIONAL CHIEF SECRETARY, FINANCE DEPARTMENT, GOVT. OF KERALA, THIRUVANANTHAPURAM-1.

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BY ADVS.
SRI.T.SETHUMADHAVAN (SR.)
SMT.DEEPA NARAYANAN
SMT.PREETHI. P.V.
SRI.M.V.BALAGOPAL
SRI. RAJEEV JYOTHISH GEORGE , GP

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
04.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WPC 3440/20

JUDGMENT

U nder the Educational Loan Repayment Support Scheme (hereinafter referred to as ‘ELRSS’ for short), propounded by the Government of Kerala through their order G.O.(P)No.65/2017/Fin., dated 16.05.2017, all educational loans which had become NonPerforming Asset (NPA) as on 31.03.2016 would be entitled to certain reductions; while those accounts which had not so become ‘NPA’ would attract certain other benefits.

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2 . The petitioner in this case asserts that his daughter had availed of an educational loan in the year 2009, the repayment of which was to commence in 2014; and that since he was unable to make any repayment thereafter, it must have become an ‘NPA’ within a period of one year or so thereafter. He says that when he came to be aware that the loan facility had become irregular, he applied to the Bank, by paying Rs.1,33,602/-, under the ‘ELRSS’; but that instead of writing off the loan account, with the assistance of Government, construing the account as ‘NPA’ as on 31.03.2016, the Bank appears to have adjusted this money into the said account

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WPC 3440/20

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and regularised it, thus denying benefits under the said Scheme. He says that, thereafter, the Bank mischievously again classified the account as an ‘NPA’ on 09.01.2018, thus frustrating the benefit of the ‘ELRSS’ to him and his daughter; and hence that he has been constrained to approach this Court through this Writ Petition.

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3 . Sri.P.M.Joshi – learned counsel for the petitioner, argued that the actions of the Bank in this case are extremely confutative because, even though the loan account had turned ‘NPA’ much earlier than 31.03.2016, they appear to have refused to declare it so and to have waited until 31.07.2017. He submitted that his client was under the bonafide impression that the account had become an ‘NPA’; and that, hence he paid an amount of Rs.1,33,602/-, believing it to be under the ‘ELRSS’, but instead of granting such benefit, said sum is stated to have been adjusted into the loan account, apparently regularising the same on 02.08.2017. He says that since no further amounts were thereafter be paid by his client, the account is stated to have been classified as ‘NPA’ on 09.01.2018 and that his client has been now subjected to great prejudice. He added that, these assertions of the Bank are wholly incorrect and

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WPC 3440/20

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baseless since, when his client paid Rs.1,33,602/-, the loan

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documents were returned to his client, clearly establishing that the

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Bank also knew this payment was under the ‘ELRSS’ and that with

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the support of the Government, the account stood closed. He thus prayed that the reliefs sought for in this Writ Petition be granted.

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4 . Smt.Deepa Narayan – learned Standing Counsel for the

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Bank, however, submitted that a Statement has been filed by her client, wherein, two facts have been explained. She affirmed that the term for repayment of the loan commenced on 05.01.2014 and that

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it became an ‘NPA’ only on 31.07.2017. She added that, since, as

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on 31.06.2016, the account had not become an ‘NPA’, the Government released only an amount of Rs.65,403/-, being the

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support in such cases and that this was credited to the loan account on 12.11.2020. She submitted that, in fact, the account became

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‘NPA’ only on 31.07.2017; and that when the petitioner paid the amount of Rs.1,33,602/-, it was adjusted against repayment and reversal of ‘entry of unrealised interest’, to a component of Rs.33,602/-, thus it being regularised on 02.08.2017. She added that, after this, when no other payments were made, the account was

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WPC 3440/20

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classified as ‘NPA’ on 09.01.2018; and therefore, that the petitioner was not entitled to the benefits under the ‘ELRSS’, construing her loan as an ‘NPA’; but only as a ‘Performing Asset’, as on 31.03.2016. She thus prayed that this Writ Petition be dismissed. 5 . Sri.Rajeev Jyothish George – learned Government Pleader, affirmed that the Government has released an amount of Rs.65,403/-, which was the eligible support to the petitioner, because the account was not classified as ‘NPA’ by the Bank on 31.03.2016 as per the ‘ELRSS’. He submitted that the Government has no other role to play in this case.

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6 . When I evaluate and consider the afore rival submissions,

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it is clear that the factual disputations between the parties are essentially as to when the account became ‘NPA’.

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7 . While the petitioner asserts that the account should have been classified as ‘NPA’ much before 31.03.2016, since he or his daughter has not paid any amount after 05.01.2014 - when the repayment started; the Bank takes the stand that it was classified as such only on 31.07.2017. Further, it is the case of the petitioner, as

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I have already said above, that he paid Rs.1,33,602/- under the

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WPC 3440/20

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impression that he was paying it under the ‘ELRSS’, while the Bank says that this was paid towards repayment of the loan account and

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reversal of realised interest and thus that the account had been regularised.

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8 . Pertinently, the petitioner has a specific case that the loan documents were returned to him on payment of Rs.1,33,602/-,

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but this has not been controverted in any manner in the Statement filed on behalf of the Bank.

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9 . I am, therefore, of the firm view that, before the Bank

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can continue with any further recovery, they have to hear the petitioner and take a fresh decision on his claims, particularly that the account had been, or ought to have been, classified as an ‘NPA’ on or before 31.03.2016; and that on payment of Rs.1,33,602/- the loan documents had been released to him, clearly indicating that the loan was then closed.

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10. The afore shall be done by the competent Authority of the Bank, as expeditiously as is possible; thus culminating in an . appropriate order and necessary action thereon

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11. Needless to say, until such time as the afore exercise is

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WPC 3440/20

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completed and the resultant order communicated to the petitioner,

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no action for recovery against him or his daughter, based on the

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loan in question, shall be initiated or continued.

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This Writ Petition is thus ordered.

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RR

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Sd/-
 DEVAN RAMACHANDRAN

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JUDGE

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WPC 3440/20

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APPENDIX OF WP(C) 3440/2020

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RESPONDENT EXHIBITS
Exhibit R4(a)-True
copy of the G.O.
(P).No.65/2017/Fin
dated 16.05.2017
Exhibit R4(b)-True
copy of G.O.
(P)No.85/2018/Fin
dated 07.06.2018
Exhibit R4(c)-True
copy of letter
No.PLG-A2/4/2019-FIN
dated 27/07/2019
PETITIONER EXHIBITS
EXHIBIT P4THE TRUE COPY OF GUIDE LINES ON
EDUCATIONAL LOAN REPAYMENT SUPPORT
SCHEME.
EXHIBIT P5THE TRUE COPY OF THE GOVT.ORDER
NO.G.O(P)NO.65/2017 DATED 16.05.2017.
EXHIBIT P6THE TRUE COPY OF THE LETTER DATED
28.07.2017 ISSUED BY THE 1ST RESPONDENT
TO THE PETITIONER.
EXHIBIT P7THE TRUE COPY OF THE INCOME CERTIFICATE
ISSUED BY THE 3RD RESPONDENT.
EXHIBIT P8THE TRUE COPY OF THE CERTIFICATE OF
ELIGIBILITY ISSUED BY THE VILLAGE OFFICER
VAZHOOR.
EXHIBIT P1THE TRUE COPY OF THE COURSE COMPLETION
CERTIFICATE DATED 04.01.2013.
EXHIBIT P10THE TRUE COPY OF THE STATEMENT OF
TRANSACTIONS OF LOAN AMOUNT HAVING
NO.30896826374.
EXHIBIT P11THE TRUE COPY OF THE NOTICE DATED
07.11.2019.
EXHIBIT P12THE TRUE COPY OF THE REQUEST DATED
19.11.2019 TO THE CHIEF MINISTER OF
KERALA.
EXHIBIT P13THE TRUE COPY OF THE EMAIL DATED
20.11.2019.
EXHIBIT P14THE TRUE COPY OF THE LETTER DATED
30.01.2020 ISSUED BY 1ST RESPONDENT TO
THE 3RD RESPONDENT.
EXHIBIT P9THE TRUE COPY OF THE APPLICATION DATED
30.10.2017 FOR LOAN REPAYMENT SUPPORT

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WPC 3440/20

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SCHEME.
EXHIBIT P2THE TRUE COPY OF THE SAID NOTICE DATED
01.08.2016 ISSUED BY THE 1ST RESPONDENT
TO THE PETITIONER.
EXHIBIT P3THE TRUE COPY OF THE LETTER DATED
19.07.2017 ISSUED BY THE 1ST RESPONDENT
DEMANDING TO PAY THE ARREARS OF THE LOAN
AMOUNT.

Radhakrishnan Nair T.P. v. State Bank of India

Case brief

What is this about?

What did the court decide?

Radhakrishnan Nair T.P. v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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