Disposed

Lasitha. K. v. the Authorized Officer

Kerala HC29 May 2024WP(C)/16296/2024

Case brief

AI extract

What is this about?

Borrowers challenged coercive SARFAESI recovery proceedings over a business loan, seeking instalment payment of arrears. The court disposed of the writ petition directing payment of Rs.1 lakh within two weeks and the balance overdue amount in five equal monthly instalments, deferring coercive proceedings on compliance.

What did the court decide?

Petitioners to pay ₹1 lakh within two weeks plus balance overdue in five equal monthly instalments with interest/charges and current EMIs; coercive proceedings deferred on compliance.

Lasitha. K. Vs the Authorized Officer — 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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WEDNESDAY, THE 29TH DAY OF MAY 2024 / 8TH JYAISHTA, 1946

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WP(C) NO. 16296 OF 2024

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PETITIONERS:

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1 LASITHA. K. AGED 46 YEARS

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W/O. SURESH BABU KARAYIL, KANNADIPOYIL P.O., BALUSSERY,
KOZHIKODE, PIN – 673 612.

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2 SURESH BABU

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AGED 51 YEARS

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S/O. BALAN, KARAYIL, KANNADIPOYIL P.O., BALUSSERY,
KOZHIKODE, PIN – 673 612.

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BY ADVS.

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LUIZ GODWIN D COUTH
JOSE KURIAKOSE (VILANGATTIL)
BIJO FRANCIS

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RESPONDENTS:

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1 THE AUTHORIZED OFFICER BALUSSERY CO-OPERATIVE URBAN BANK, BALUSSERY P.O., KOZHIKODE, PIN – 673 612.

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2 THE BRANCH MANAGER BALUSSERY CO-OERATIVE URBAN BANK, BALUSSERY P.O., KOZHIKODE, PIN – 673 612.

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BY ADVS.
M.VIVEK RABINDRANATH
V.T.MADHAVANUNNI(K/000329/1983)

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
29.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No. 16296 of 2024

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JUDGMENT

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Dated this the 29^th day of May, 2024

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The petitioners have approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Balussery Co-opertive Urban Bank 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 4.5 lakhs to the petitioners as₹ Business Loan in the year 2021. 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 installments promptly later due to financial crisis. The repayment of loan fell into arrears. It happened due to reasons beyond the control of the petitioners.

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W.P.(C) No. 16296 of 2024

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Though the petitioners requested the Bank to

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permit the petitioners 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.P2 notice.

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

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W.P.(C) No. 16296 of 2024

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the loan was given to the petitioners in the year 2021. The petitioners committed default in repaying the loan.

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The Bank repeatedly reminded the petitioners and required him 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 Ext.P2 notice was 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 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 submitted that the outstanding amount due to the Bank from

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W.P.(C) No. 16296 of 2024

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the petitioners as on 29.05.2024 is ₹6,69,100/- and the overdue amount as on 29.05.2024 is 3,57,000/-.₹

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I have heard the counsel for the petitioners and the

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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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(i) The petitioners shall remit an amount of

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₹1 lakh within a period of two weeks and the

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balance overdue amount in subsequent

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W.P.(C) No. 16296 of 2024

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6

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

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(ii) If the petitioners commit default in making payments as directed above, the respondents will be at liberty to continue with the coercive proceedings against the petitioners in accordance with law.

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

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

Sd/-

N.NAGARESH

JUDGE

W.P.(C) No. 16296 of 2024

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APPENDIX OF WP(C) 16296/2024

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PETITIONERS EXHIBITS

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Exhibit P1THE TRUE COPY OF THE EXTRACT OF
THE PASSBOOK ISSUED BY THE
BALUSSERYCO-OPERATIVEBANK
MENTIONING THE LOAN AMOUNT.
Exhibit P2THE TRUE COPY OF THE NOTICE DATED
22-03-2024 ISSUED BY THE ADVOCATE
COMMISSIONER.

Lasitha. K. v. the Authorized Officer

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Lasitha. K. v. the Authorized Officer

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