Allowed

Babu v. Esaf Small Finance Bank

Kerala HC11 Dec 2023WP(C)/6453/2023

Case brief

AI extract

What is this about?

In this single-judge writ petition, the High Court disposed of a petition by a loan defaulter aggrieved by SARFAESI Act coercive proceedings. The petitioner requested time to repay due to pandemic hardships and offered security. The Court granted a moratorium, directing payment of overdue dues in monthly installments with deferred coercive proceedings pending compliance.

What did the court decide?

Coercive proceedings deferred; direction to pay overdue dues of ₹4,49,483.08 in 12 equal monthly installments starting 11.01.2024, along with current EMIs, interest, and administrative charges.

Babu Vs Esaf Small Finance Bank — Banking and Recovery | Kerala HC (2023)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶4

MONDAY, THE 11TH DAY OF DECEMBER 2023 / 20TH AGRAHAYANA, 1945
WP(C) NO. 6453 OF 2023

¶5

PETITIONER:

¶6

BABU

¶7

AGED 43 YEARS
S/O MANIYAN, NEDUNGOTTUKONAM, VARAVUKOTTA,
VATTAVILA, CHENKAL, THIRUVANANTHAPURAM, PIN – 695132

¶8

BY ADV LATHEESH SEBASTIAN

¶9

RESPONDENTS:

¶10

1 ESAF SMALL FINANCE BANK, REPRESENTED BY ITS MANAGING DIRECTOR, ESAF BHAVAN, MANNOOTHY, THRISSUR, PIN - 680651

¶11

2 THE AUTHORIZED OFFICER UNDER THE SARFAESI ACT, ESAF SMALL FINANCE BANK, HEAD COLLECTION & RECOVERY DEPARTMENT, ESAF BHAVAN, MANNOOTHY, THRISSUR, PIN - 680651

¶12

3 THE BRANCH MANAGER ESAF SMALL FINANCE BANK, THIRUVANANTHAPURAM BRANCH, MARVALLIL DR.KOSHY BUILDING, PANAVILA, THIRUVANANTHAPURAM, PIN – 695014

¶13

BY ADV RASHMI.K.V

¶14

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
11.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶15

¶16

WP(C) No.6453 of 2023

¶17

JUDGMENT

¶18

Dated this the 11^th day of December, 2023

¶19

The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the ESAF Small Finance Bank to the petitioner, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

¶20

The respondents paid ₹4 lakhs to the petitioner and his wife as Housing 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.

¶21

Though the petitioner requested the respondents to

¶22

permit the petitioner to repay the overdue amounts in easy monthly instalments, the respondents were not yielding. The

¶23

WP(C) No.6453 of 2023

¶24

¶25

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 Exts.P1 to P3 notices.

¶26

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.

¶27

Standing Counsel entered appearance on behalf of the respondents 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 and his wife in the year 2018. The petitioner committed default in repaying the loan.

¶28

The respondents repeatedly reminded the petitioner

¶29

and required him to clear the dues. The petitioner deliberately

¶30

¶31

WP(C) No.6453 of 2023

¶32

omitted to do so. In the circumstances, the respondents 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 Exts.P1 to P3 were issued in these circumstances. The petitioner has not advanced any legal reasons to thwart the coercive proceedings initiated by the respondents.

¶33

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 to the petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount due to the respondents from the petitioner is ₹8,82,666.08 and the overdue amount is ₹4,49,483.08.

¶34

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

¶35

¶36

WP(C) No.6453 of 2023

¶37

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 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 respondents.

¶38

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.

¶39

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

¶40

(i) The petitioner shall remit the overdue amount of ₹4,49,483.08 in 12 consecutive and equal monthly instalments. First of such instalments shall be paid on or before 11.01.2024.

¶41

(ii) The petitioner shall remit the balance overdue amount in subsequent consecutive 11

¶42

¶43

WP(C) No.6453 of 2023

¶44

equal monthly instalments thereafter, along with accruing interest and other Administrative charges, if any.

¶45

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

¶46

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

¶47

(v) If the petitioner makes payments as

¶48

directed above, coercive proceedings, if any, against the petitioner shall stand deferred.

Sd/-

N.NAGARESH

JUDGE

spk

WP(C) No.6453 of 2023

¶54

¶55

APPENDIX OF WP(C) 6453/2023

¶56

PETITIONER EXHIBITS

¶57

Exhibit P1TRUE COPY OF SECTION 13(2) NOTICE OF
THE 2ND RESPONDENT DATED 24.09.2021
Exhibit P2TRUE COPY OF THE POSSESSION NOTICE OF
THE 2ND RESPONDENT DATED 19.03.2022
Exhibit P3TRUE COPY OF THE NOTICE OF THE ADVOCATE
COMMISSIONER DATED 31.12.2022
Exhibit P4TRUE COPY OF THE REPRESENTATION OF THE
PETITIONER DATED 31.01.2023

Babu v. Esaf Small Finance Bank

Case brief

What is this about?

What did the court decide?

Babu v. Esaf Small Finance Bank

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

Coram

Case details

Similar cases

Manoj K.M. Vs State Bank of India

Dr. N.K. Viswanathan Vs Sugadhakumar

Vijayan.M.S Vs Ms. D Dharmalashri, IAS

Mayadevi. K Vs the Alleppey Urban Co-Operative Bank Ltd. NO.A-67

Naveen Mathew Philip Vs M/S. South Indian Bank Ltd., Represented by Its Chairman & Managing Director

Manoj Kunju Kunju, Vs the State of Kerala