Disposed

Dhanesh O.K, v. the Kerala State Co-Operative Bank Ltd.

Kerala HC22 Dec 2023WP(C)/43821/2023

Case brief

AI extract

What is this about?

In a writ petition under Article 226, the High Court of Kerala directed the respondent Bank to grant a short breathing time to the petitioner for clearing loan dues via monthly instalments. The coercive proceedings were deferred pending compliance, with the provision that they would resume in case of default.

What did the court decide?

Petitioner given 13 months to clear overdue amount in instalments; current EMIs also payable. Coercive proceedings deferred if payments are made as directed.

Dhanesh O.K, 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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FRIDAY, THE 22ND DAY OF DECEMBER 2023 / 1ST POUSHA, 1945
WP(C) NO. 43821 OF 2023

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PETITIONER:

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DHANESH O.K,
AGED 41 YEARS
S/O. ACHUTHAN, KALLEN VEEDU,
PERUVALATHUPARAMBA P.O, IRIKKUR,
KANNUR DISTRICT, PIN – 670593

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BY ADVS.
SRAVAN M.S.
SRIKANTH THAMBAN

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RESPONDENTS:

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1 THE KERALA STATE CO-OPERATIVE BANK LTD, REPRESENTED BY ITS MANAGER, IRIKKUR BRANCH, IRIKKUR P.O., KANNUR DISTRICT, PIN - 670593

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2THE MANAGER,
THE KERALA STATE CO-OPERATIVE BANK LTD,
IRIKKUR BRANCH, IRIKKUR P.O.,
KANNUR DISTRICT, PIN - 670593

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3 THE AUTHORIZED OFFICER, THE KERALA STATE CO-OPERATIVE BANK LTD, KANNUR REGIONAL OFFICE, KANNUR, KANNUR DISTRICT, PIN – 670001

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SRI.M. SASINDRAN, R1

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 22.12.2023, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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WP(C) No.43821 of 2023

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JUDGMENT

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Dated this the 22^nd 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 ₹18 lakhs to the petitioner as Personal Loan in the year 2018. 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 instalments promptly later due to Covid-19 pandemic. The repayment of loan fell into arrears later. 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 instalments, the Bank authorities were not yielding. The

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WP(C) No.43821 of 2023

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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.P6 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 instalments. If the respondents 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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Standing Counsel entered appearance on behalf of the Bank and denied all the statements made by the petitioner. On behalf of the respondents, it is submitted that the loan was given to the petitioner in the year 2018. The petitioner committed default in repaying the loan.

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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

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WP(C) No.43821 of 2023

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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.P6 was issued in these circumstances. The petitioner 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 soon and remit the balance overdue amount immediately thereafter, a short breathing time can be granted

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to the petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount due to the Bank from the petitioner as on 21.12.2023 is ₹16,43,541/- and the overdue amount as on 21.12.2023 is ₹4,53,243/-.

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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

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WP(C) No.43821 of 2023

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the loan account initially. The default in repayment of the loan occurred lately due to reasons beyond the control of the petitioner. The petitioner has provided substantial security which will safeguard the interest of the Bank.

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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 overdue amount of ₹4,53,243/- in 13 consecutive and equal monthly instalments. First of such instalments shall be paid on or before 22.01.2024.

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(ii) The petitioner shall remit the balance overdue amount in subsequent consecutive 12 equal monthly instalments thereafter, along with accruing interest and other Bank

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WP(C) No.43821 of 2023

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charges, if any.

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(iii) If the petitioner commits any default in making payments as directed above, the respondents will be at liberty to continue with

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the coercive proceedings against the petitioner in accordance with law.

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(iv) The petitioner shall also pay current EMIs along with the aforesaid payments.

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(v) If the petitioner makes payments as directed above, coercive proceedings, if any,

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against the petitioner shall stand deferred.

Sd/-

N.NAGARESH

JUDGE

spk

WP(C) No.43821 of 2023

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APPENDIX OF WP(C) 43821/2023

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PETITIONER EXHIBITS

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Exhibit P1A TRUE COPY OF THE NOTICE ISSUED BY
THE RESPONDENT BANK DATED 06.07.2023
Exhibit P2A TRUE COPY OF THE PAYMENT RECEIPT
DATED 25.05.2023
Exhibit P3A TRUE COPY OF THE PAYMENT RECEIPT
DATED 15.06.2023
Exhibit P4A TRUE COPY OF THE PAYMENT RECEIPT
DATED 03.07.2023
Exhibit P5A TRUE COPY OF THE DEMAND NOTICE
ISSUED BY THE AUTHORIZED OFFICER OF
THE RESPONDENT BANK DATED 10.08.2023
Exhibit P6THE TRUE COPY OF THE POSSESSION NOTICE
ISSUED BY THE 3RD RESPONDENT DATED
12.12.2023

Dhanesh O.K, v. the Kerala State Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Dhanesh O.K, v. the Kerala State Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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