Disposed

Ayyappan, v. Manjeri Co-Operative Urban Bank Limited

Kerala HC5 Feb 2024WP(C)/1247/2024

Case brief

AI extract

What is this about?

The court disposed of a writ petition challenging coercive proceedings by a co-operative bank for loan default under the SARFAESI Act, granting the petitioner time to repay the outstanding amount in instalments.

What did the court decide?

Petitioner directed to pay Rs. 3 lakhs within one month and balance in 8 equal monthly instalments; coercive proceedings deferred if payments are made.

Ayyappan, Vs Manjeri Co-Operative Urban 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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MONDAY, THE 5^TH DAY OF FEBRUARY 2024 / 16TH MAGHA, 1945

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WP(C) NO. 1247 OF 2024

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PETITIONER:

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AYYAPPAN, AGED 59 YEARS, S/O. CHERIYATHAN, CHOLAYIL HOUSE, KOOTTAVIL,PULPATTA P.O., MALAPPURAM DISTRICT, PIN – 676123.

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BY ADV C.M.MOHAMMED IQUABAL

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RESPONDENT:

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MANJERI CO-OPERATIVE URBAN BANK LIMITED, REPRESENTED BY ITS MANAGER, TRIPPANACHI BRANCH, O.P.COMPLEX, TRIPPANACHI P.O., KUZHIMANNA, MALAPPURAM DISTRICT – 673641.

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BY ADV.SRI.K.VIDYASAGAR

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.1247 of 2024

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J U D G M E N T

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Dated this the 5^th day of February, 2024

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The petitioner has approached this Court aggrieved by

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the coercive proceedings for recovery of financial advance made by the Manjeri Co-operative Urban 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 ₹5 lakhs to the petitioner as Mortgage 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 instalments promptly later due to financial difficulties. The repayment of loan fell into arrears.

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W.P.(C) No.1247 of 2024

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It happened due to reasons beyond the control of the petitioner.

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Though the petitioner requested the Bank to permit the petitioner to repay the overdue amounts in easy monthly instalments, the Bank authorities were not yielding.

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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.P2 notice.

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The petitioner states that he is still in a position to

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clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly instalments. 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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W.P.(C) No.1247 of 2024

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Standing Counsel entered appearance on behalf

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of 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 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. 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.P2 notice was issued in these circumstances. The petitioner has not advanced any legal reasons to thwart the coercive proceedings initiated by the

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Bank.

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W.P.(C) No.1247 of 2024

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The Standing Counsel, however, submitted that if

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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 the petitioner as on 05.02.2024 is ₹10,98,707/-.

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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 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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W.P.(C) No.1247 of 2024

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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 ₹3 lakhs within a period of one month from today.

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

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(iii) If the petitioner commits default in making payments as directed above, the respondent will be at liberty to continue with

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W.P.(C) No.1247 of 2024

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coercive proceedings against the petitioner in accordance with law.

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

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(v) The petitioner will be at liberty to approach the Bank for availing One time Settlement in the meanwhile, without violating the payment schedule as directed above.

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(vi) The petitioner may also approach the Bank for possession of the secured asset.

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Sd/-

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N. NAGARESH JUDGE

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ams

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W.P.(C) No.1247 of 2024

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APPENDIX OF WP(C) 1247/2024

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PETITIONER EXHIBITS

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Exhibit P1 THE TRUE COPY OF THE RELEVANT PAGE OF THE PASSBOOK OF THE SAVINGS BANK ACCOUNT OF THE PETITIONER DATED NIL Exhibit P2 THE TRUE COPY OF THE NOTICE ISSUED BY THE ADVOCATE COMMISSIONER IN C.M.P.NO. 2449/2018 OF THE CJM COURT, MANJERI DATED 05.09.2023

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Exhibit P3 THE TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT BANK DATED 01.01.2024

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Exhibit P4 THE TRUE COPY OF THE RECEIPT ISSUED BY THE RESPONDENT BANK DATED 23.01.2024

Ayyappan, v. Manjeri Co-Operative Urban Bank Limited

Case brief

What is this about?

What did the court decide?

Ayyappan, v. Manjeri Co-Operative Urban Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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