Allowed

Joys Enterprises Pvt. Limited, v. the Kerala State Co-Operative Bank

Kerala HC22 May 2024WP(C)/1879/2024

Case brief

AI extract

What is this about?

The High Court allowed a writ petition filed by a borrower aggrieved by coercive recovery proceedings initiated by a bank under the SARFAESI Act. The Court granted a moratorium, directing the petitioner to repay the outstanding amount in 12 monthly installments while deferring further coercive action.

What did the court decide?

The petitioner directed to remit the outstanding amount of ₹1,46,98,942 in 12 consecutive equal monthly installments including interest and charges; coercive proceedings to stand deferred subject to c

Joys Enterprises Pvt. Limited, Vs the Kerala… — Contract and Commercial Disputes | 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 22ND DAY OF MAY 2024 / 1ST JYAISHTA, 1946

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WP(C) NO. 1879 OF 2024

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PETITIONER:

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JOYS ENTERPRISES PVT. LIMITED
JOYS PALANCE, T.B.ROAD, THRISSUR - 680021,
REPRESENTED BY ITS MANAGER V.J. VINCENT,
PIN – 680021

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BY ADVS.
P.RAMAKRISHNAN
PREETHI RAMAKRISHNAN (P-212)
C.ANIL KUMAR
ASHA K.SHENOY
PRATAP ABRAHAM VARGHESE
GOKUL KRISHNA

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RESPONDENTS:

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1THE KERALA STATE CO-OPERATIVE BANK
SAHAKARANA SHADABDI MANDIRAM,
KOVILAKATHUPADAM, THIRUVAMBADY PO,
THRISSUR,
REPRESENTED BY ITS GENERAL MANAGER,
PIN - 680022

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2THE AUTHORIZED OFFICER
THE KERALA STATE CO-OPERATIVE BANK,
SAHAKARANA SHADABDI MANDIRAM,
KOVILAKATHUPADAM, THIRUVAMBADY PO,
THRISSUR, PIN – 682022

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SRI.M.SASINDRAN

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
22.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) No.1879 Of 2024

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JUDGMENT

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Dated this the 22^nd day of May, 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 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 ₹2.70 Crores to the petitioner as Business Loan in the year 2015. The petitioner states that though the petitioner made remittances promptly during the initial repayment period of the financial advance, the petitioner could not pay the repayment installments promptly later due to Covid-19 pandemic. 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.1879 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 Ext.P3 notice.

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The petitioner states that the petitioner 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, the petitioner 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

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WP(C) No.1879 Of 2024

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petitioner. On behalf of the respondents, 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.P3 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 outstanding amount immediately thereafter, a short breathing time can be granted to the

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WP(C) No.1879 Of 2024

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petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount due to the Bank from the petitioner as on 22.05.2024 is ₹1,46,98,942/-.

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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

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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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WP(C) No.1879 Of 2024

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(i) The petitioner shall remit the outstanding amount of 1,46,98,942/- in 12₹ 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 24.06.2024. (ii) If the petitioner commits 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. (iii) If the petitioner makes payments as directed above, coercive proceedings, if any, against the petitioner shall stand deferred. Sd/-

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N.NAGARESH JUDGE

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hmh

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WP(C) No.1879 Of 2024

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APPENDIX OF WP(C) 1879/2024

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PETITIONER EXHIBITS

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Exhibit P-1TRUE COPY OF LETTER DATED 6/10/2015
ISSUED BY THE DEPUTY GENERAL MANAGER,
THRISSUR DISTRICT CO-OP. BANK TO THE
PETITIONER
Exhibit P-2TRUE COPY OF STATEMENT OF ACCOUNTS IN
RESPECT OF THE REMITTANCE MADE BY THE
PETITIONER DURING THE PERIOD 2015-16
TO 2022-23 IN RESPECT OF THE LOAN
Exhibit P-3TRUE COPY OF NOTICE DATED 12/1/2024
ISSUED BY THE 2ND RESPONDENT

Joys Enterprises Pvt. Limited, v. the Kerala State Co-Operative Bank

Case brief

What is this about?

What did the court decide?

Joys Enterprises Pvt. Limited, v. the Kerala State Co-Operative Bank

Case brief

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