Disposed

Shihab. K v. the Kerala State Co-Operative Bank Ltd.

Kerala HC12 Jan 2024WP(C)/1061/2024

Case brief

AI extract

What is this about?

A borrower facing SARFAESI coercive recovery of a defaulted home loan sought time to pay arrears in installments. The Bank opposed, citing default since 2021. The Court allowed the overdue amount of ₹4,93,478/- to be paid in 12 equal monthly installments, deferring coercive proceedings if payments are made; on single default the Bank may proceed.

What did the court decide?

Overdue ₹4,93,478/- payable in 12 monthly installments plus interest/charges and current EMIs; coercive proceedings deferred while payments continue.

Shihab. K Vs the Kerala State Co-Operative 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 12TH DAY OF JANUARY 2024 / 22ND POUSHA, 1945

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WP(C) NO. 1061 OF 2024

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PETITIONER:

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SHIHAB. K
AGED 44 YEARS
S/O. YOUSAF, SUFIYAN MANZIL, BADARIA NAGAR,
KUMBALA P.O, KASARAGOD DISTRICT,
PIN – 671321

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BY ADVS.
RESHMA E.
ANNA SONIE
ATHIRA V.M.

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RESPONDENT:

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THE KERALA STATE CO-OPERATIVE BANK LTD
REP.BY AUTHORIZED OFFICER REGIONAL OFFICE,
KANNUR P.O., KANNUR DISTRICT,
PIN – 670001

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BY ADV M.SASINDRAN

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
12.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO.1061 OF 2024

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JUDGMENT

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Dated this the 12^th day of January, 2024

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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 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 ₹6 lakhs to the petitioner as Home Loan in the year 2015. 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 job loss and unforeseen circumstances. The repayment of loan fell into arrears. It happened due to reasons beyond the control of the petitioner.

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WP(C) NO.1061 OF 2024

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Though the petitioner requested the Bank to permit

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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 respondent is 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

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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 2015. The

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WP(C) NO.1061 OF 2024

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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. The petitioner’s loan account was declared as NPA in the year 2021. 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 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 to the petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount due to the Bank from

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WP(C) NO.1061 OF 2024

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5

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the petitioner as on 12.01.2024 is ₹7,75,161/- and the overdue amount as on 12.01.2024 is ₹4,93,478/-.

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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 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 4,93,478/- in 12 consecutive and₹

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equal monthly installments along with

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WP(C) NO.1061 OF 2024

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6

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accruing interest and other Bank charges, if any. First of such installments shall be paid on or before 12.02.2024.

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

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(iv) 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.1061 OF 2024

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APPENDIX OF WP(C) 1061/2024

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PETITIONER EXHIBITS

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Exhibit P1THE TRUE COPY OF THE POSSESSION NOTICE
NO. KNR/KB/RO/SARFEASI/14/2023-24
DATED 22.12.2023 ISSUED BY THE
RESPONDENT BANK.

Shihab. K v. the Kerala State Co-Operative Bank Ltd.

Case brief

What is this about?

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Shihab. K v. the Kerala State Co-Operative Bank Ltd.

Case brief

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