Disposed

Naisam K.A. v. the Kottayam Co-Operative Urban Bank Ltd. NO.421

Kerala HC5 Jan 2024WP(C)/105/2024

Case brief

AI extract

What is this about?

Borrowers of an ₹8 lakh co-operative bank loan sought protection from SARFAESI coercive recovery proceedings, citing Covid-19-related default. The court disposed of the petition directing repayment of the overdue ₹7,72,059 in 12 equal monthly instalments with current EMIs; coercive proceedings deferred on compliance.

What did the court decide?

Overdue amount of ₹7,72,059 directed to be paid in 12 equal monthly instalments with current EMIs; coercive proceedings deferred subject to compliance.

Naisam K.A. Vs the Kottayam Co-Operative Urban Bank Ltd… — Banking and Recovery | Kerala HC (2024)

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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 5TH DAY OF JANUARY 2024 / 15TH POUSHA, 1945

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WP(C) NO. 105 OF 2024

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PETITIONERS:

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1 NAISAM K.A. AGED 53 YEARS S/O.ABDUL AZEEZ, RESIDING AT KARATHRA HOUSE, VELOOR P.O, KOTTAYAM, PIN - 686003

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2 SHEEBA AGED 43 YEARS W/O.NAISAM K.A., RESIDING AT KARATHRA HOUSE, VELOOR P.O., KOTTAYAM, PIN – 686003

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BY ADVS.
 C.S.MANILAL
 S.NIDHEESH

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RESPONDENTS:

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1 THE KOTTAYAM CO-OPERATIVE URBAN BANK LTD. NO.421 THIRUNAKKARA, KOTTAYAM, REP. BY ITS MANAGING DIRECTOR., PIN - 686001

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2 THE AUTHORIZED OFFICER, THE KOTTAYAM CO-OPERATIVE URBAN BANK LTD. NO.421 THIRUNAKKARA, KOTTAYAM, PIN – 686001

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SRI.SURIN GEORGE IPE

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 05.01.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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WP(C) No.105 of 2024

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JUDGMENT

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Dated this the 5^th day of January, 2024

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The petitioners have approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Kottayam Co-operative Urban Bank Limited to the petitioners, 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 ₹8 lakhs to the petitioners as Ordinary Loan in the year 2019. The petitioners state that though the petitioners made remittances promptly during the initial repayment period of the financial advance, they 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 petitioners.

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WP(C) No.105 of 2024

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Though the petitioners requested the Bank to permit the petitioners to repay the overdue amounts in easy monthly instalments, 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 Exts.P1 and P2.

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The petitioners state that they are 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 petitioners, they will be put to untold hardship and loss.

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Standing Counsel entered appearance on behalf of

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the Bank and denied all the statements made by the petitioners. On behalf of the respondents, it is submitted that

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WP(C) No.105 of 2024

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the loan was given to the petitioners in the year 2019. The petitioners committed default in repaying the loan.

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The Bank repeatedly reminded the petitioners and

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required them to clear the dues. The petitioners deliberately omitted to do so. In the circumstances, the Bank had no other go than to proceed against the petitioners invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The impugned Exts.P1 and P2 were issued in these circumstances. The petitioners have 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

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the petitioners are 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 petitioners to clear the dues. The Standing Counsel

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WP(C) No.105 of 2024

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submitted that the outstanding amount due to the Bank from the petitioners as on 05.01.2024 is ₹12,18,708/- and the overdue amount as on 05.01.2024 is ₹7,72,059/-.

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

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The specific case of the petitioners is that the petitioners have 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 petitioners. The petitioners have 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 petitioners to clear off the liability.

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

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WP(C) No.105 of 2024

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(i) The petitioners shall remit the overdue amount of ₹7,72,059/- in 12 consecutive and equal monthly instalments. First of such instalments shall be paid on or before 05.02.2024.

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(ii) The petitioners shall remit the balance overdue amount in subsequent consecutive 11 equal monthly instalments thereafter, along with accruing interest and other Bank charges, if any.

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(iii) If the petitioners commit 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 petitioners in accordance with law.

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

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WP(C) No.105 of 2024

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(v) If the petitioners make payments as directed above, coercive proceedings, if any,

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against the petitioners shall stand deferred.

Sd/-

N.NAGARESH

JUDGE

spk

WP(C) No.105 of 2024

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APPENDIX OF WP(C) 105/2024

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PETITIONER EXHIBITS

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Exhibit- P1TRUE COPY OF THE NOTICE DATED
2/11/2022,ISSUEDBYTHE2ND
RESPONDENT
Exhibit- P2TRUE COPY OF THE NOTICE DTD.
5/12/2023, ISSUED BY THE ADVOCATE
COMMISSIONER, ON THE BASIS OF THE
INSTRUCTIONS OF THE BANK, BASED ON THE
ORDERSOFTHECHIEFJUDICIAL
MAGISTRATE IN M.C NO.611/2023

Naisam K.A. v. the Kottayam Co-Operative Urban Bank Ltd. NO.421

Case brief

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What did the court decide?

Naisam K.A. v. the Kottayam Co-Operative Urban Bank Ltd. NO.421

Case brief

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What did the court decide?

What the court decided

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