Disposed

Kunhipocker v. the Manjeri Urban Co-Operative Bank Limited

Kerala HC4 Jan 2024WP(C)/109/2024

Case brief

AI extract

What is this about?

Borrower challenged coercive recovery proceedings by a co-operative bank under the SARFAESI Act for an overdraft facility that fell into arrears. The court disposed of the petition directing payment of ₹12 lakhs by a fixed date and the balance in eleven equal monthly instalments, deferring coercive proceedings on compliance.

What did the court decide?

Time granted: ₹12 lakhs by 31.01.2024 and balance in 11 equal monthly instalments; coercive proceedings deferred on compliance.

Kunhipocker Vs the Manjeri Urban Co-Operative Bank Limited — 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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THURSDAY, THE 4TH DAY OF JANUARY 2024 / 14TH POUSHA, 1945
WP(C) NO. 109 OF 2024

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PETITIONER:

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KUNHIPOCKER
AGED 62 YEARS
S/O. MAYINKUTTY HAJI, MAZHAKKOTTIL HOUSE,
KAVANOOR POST, MALAPPURAM DISTRICT, PIN – 673639

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BY ADV E.C.AHAMED FAZIL

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RESPONDENT:

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THE MANJERI URBAN CO-OPERATIVE BANK LIMITED
COURT ROAD, KACHERIPADI, MANJERI
REPRESENTED BY ITS AUTHORIZED OFFICER,
PIN – 676121

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SRI.K. VIDYASAGAR, STANDING COUNSEL

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 04.01.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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WP(C) No.109 of 2024

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JUDGMENT

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Dated this the 4^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 Manjeri Urban Co-operative Bank Limited to the petitioner, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of

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Security Interest Act, 2002.

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The Bank paid ₹35 lakhs to the petitioner as Over Draft / Cash Credit facility in the year 2017. 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 severe financial issues. The repayment of advance fell into arrears later. It happened due to reasons beyond the control of the petitioner.

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WP(C) No.109 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 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 Ext.P1 notice.

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The petitioner states that he is still in a position to clear the overdue amounts towards the advance, if sufficient

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time is given to clear the dues in easy monthly instalments. If

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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 advance was given to the petitioner in the year 2017. The

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WP(C) No.109 of 2024

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petitioner committed default in maintaining the advance.

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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 classified as NPA in the year 2017. 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 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 outstanding 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.109 of 2024

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the petitioner as on 04.01.2024 is ₹74,56,780/-.

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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 advance 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 an amount of ₹12 lakhs on or before 31.01.2024.

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(ii) The petitioner shall remit the balance outstanding amount in subsequent

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WP(C) No.109 of 2024

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consecutive 11 equal monthly instalments thereafter, along with accruing interest and other Bank charges, if any.

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(iii) If the petitioner commits any 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. (iv) If the petitioner makes payments as directed above, coercive proceedings, if any, against the petitioner shall stand deferred.

Sd/-

N.NAGARESH

JUDGE

spk

WP(C) No.109 of 2024

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APPENDIX OF WP(C) 109/2024

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PETITIONER EXHIBITS

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Exhibit P1TRUE COPY OF THE NOTICE DATED
18.12.2023 ISSUED BY THE ADVOCATE
COMMISSIONER IN CMP NO. 2120 OF 2019
ON THE FILES OF CHIEF JUDICIAL
MAGISTRATE COURT, MANJERI

Kunhipocker v. the Manjeri Urban Co-Operative Bank Limited

Case brief

What is this about?

What did the court decide?

Kunhipocker v. the Manjeri Urban Co-Operative Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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