Disposed

Mohammad. v. K. v Nilambur Co-Operative Urban Bank Ltd. No. F-1043

Kerala HC12 Jan 2024WP(C)/1108/2024

Case brief

AI extract

What is this about?

A borrower facing coercive SARFAESI recovery proceedings for an overdue ₹17 lakh overdraft sought time to pay in installments. The court disposed of the petition directing payment of the outstanding amount in six equal monthly installments, with coercive proceedings deferred unless the petitioner defaulted.

What did the court decide?

Payment of ₹22,56,570/- in six equal monthly installments permitted; coercive proceedings deferred if paid as directed.

Mohammad. v. K. Vs Nilambur 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 12TH DAY OF JANUARY 2024 / 22ND POUSHA, 1945

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WP(C) NO. 1108 OF 2024

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PETITIONER:

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MOHAMMAD. V. K.
AGED 59 YEARS
S/O MUHAMMAD, VADAKEKKARA HOUSE,
CHANTHAKUNNU P.O., NILAMBUR,
MALAPPURAM DISTRICT., PIN – 679329

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BY ADVS.
P.SAMSUDIN
A.M.BABU
MILAN RACHEL MATHEW
LIRA A.B.
NASRIN WAHAB

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RESPONDENTS:

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1NILAMBUR CO-OPERATIVE URBAN BANK LTD. NO. F-1043
NILAMBUR P.O., MALAPPURAM DISTRICT,
REPRESENTED BY ITS AUTHORISED OFFICER.,
PIN - 679329

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2THE AUTHORISED OFFICER
NILAMBUR CO-OPERATIVE URBAN BANK LTD. NO. F-1043,
NILAMBUR P.O., MALAPPURAM DISTRICT.,
PIN – 679329

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BY ADVS.
RAMESH BABU T
C.K.SREEJITH(K/2048/1999)
KOZHITURATH PRASEETHA GOPALAKRISHNAN(K/706/2005)
RANI N.(K/3598/2023)
S.VEENA(K/2403-A/2019)
SHIJU AUGUSTINE(K/3586/2023)

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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.1108 OF 2024
 2

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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 Nilambur Co-operative Urban 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 ₹17 lakhs to the petitioner as Over Draft in the year 2022. 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 financial constraints. 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.1108 OF 2024

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Though the petitioner requested the Bank to permit 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 Exts.P1 and P2 notices.

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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 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

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

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WP(C) NO.1108 OF 2024

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4

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the Over Draft was given to the petitioner in the year 2022. The 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. 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 Exts.P1 and P2 notices were 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 total outstanding amount immediately thereafter, a short breathing time can be granted to the petitioner to clear the dues. The Standing Counsel

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WP(C) NO.1108 OF 2024

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5

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submitted that the outstanding amount due to the Bank from the petitioner as on 10.01.2024 is ₹22,56,570/-

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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 outstanding amount of ₹22,56,570/- in six

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WP(C) NO.1108 OF 2024

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consecutive and equal monthly installments along with 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) 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.1108 OF 2024

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APPENDIX OF WP(C) 1108/2024

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PETITIONER EXHIBITS

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Exhibit P1TRUE COPY OF THE DEMAND NOTICE DATED
29-09-2023 ISSUED BY THE BANK TO THE
PETITIONER
Exhibit P2TRUE COPY OF THE POSSESSION NOTICE
DATED 22-12-2023 ISSUED BY THE BANK TO
THE PETITIONER

Mohammad. v. K. v Nilambur Co-Operative Urban Bank Ltd. No. F-1043

Case brief

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Mohammad. v. K. v Nilambur Co-Operative Urban Bank Ltd. No. F-1043

Case brief

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