Partly allowed

Abdul Rafeeque.a.v. v. Kerala State Co-Operative Bank Limited

Kerala HC13 Feb 2024WP(C)/2735/2024

Case brief

AI extract

What is this about?

Single judge disposed of a writ petition challenging coercive recovery proceedings initiated by a bank under the SARFAESI Act. The court granted a time-bound installment plan to clear dues, conditional on strict compliance; failure would revive coercive proceedings.

What did the court decide?

Order of staying coercive proceedings on condition that the entire outstanding amount (approx. ₹76 lakhs) and interest be paid in 12 equal monthly instalments commencing 13.03.2024. Single default per

Abdul Rafeeque.a.v. Vs Kerala State Co-Operative Bank… — 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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TUESDAY, THE 13TH DAY OF FEBRUARY 2024 / 24TH MAGHA, 1945

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WP(C) NO. 2735 OF 2024

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PETITIONERS:

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1 ABDUL RAFEEQUE.A.V. AGED 52 YEARS

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S/O. KUNHALIKUTTY, AZHUVALAPPIL HOUSE,
PONNIYAKURUSSI.P.O., PERINTHALMANA,
MALAPPURAM DISTRICT, PIN - 679522

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2 AYISHA SAMEERA

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AGED 41 YEARS

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W/O. ABDUL RAFEEQUE.A.V., AZHUVALAPPIL HOUSE,
PONNIYAKURUSSI.P.O., PERINTHALMANA
MALAPPURAM DISTRICT, PIN – 679322

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BY ADV U.K.DEVIDAS

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RESPONDENT:

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KERALA STATE CO-OPERATIVE BANK LIMITED
(ERSTWHILE MDC BANK)RECOVERY DEPARTMENT,
P.B. NO.8, MANJERI ROAD, UPHILL, MALAPPURAM
REP BY ITS AUTHORIZED OFFICER, PIN – 676505

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SRI.GILBERT GEORGE CORREYA

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 13.02.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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WP(C) No.2735 of 2024

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JUDGMENT

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Dated this the 13^th day of February, 2024

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The petitioners have approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Kerala State Co-operative Bank Limited 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 ₹15 lakhs and ₹33 lakhs to the petitioners as Over Draft facility in the year 2019 and 2020 respectively. 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 instalments promptly later due to financial crisis. The repayment of advance fell into arrears later. It happened due to reasons beyond the control of the petitioners.

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WP(C) No.2735 of 2024

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

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The petitioners state that they are still in a position

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to clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly instalments. 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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WP(C) No.2735 of 2024

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the advances were given to the petitioners in the year 2019 and 2020. The petitioners committed default in maintaining the advance / credit facility.

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The Bank repeatedly reminded the petitioners and required them 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 Exts.P1 and P2 were 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 outstanding amount immediately thereafter, a short breathing time can be granted to the petitioners to clear the dues. The Standing Counsel

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WP(C) No.2735 of 2024

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submitted that the outstanding amount due to the Bank from

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the petitioners as on 23.01.2024 is ₹49,51,473/- and ₹26,54,024/- respectively.

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I have heard the counsel for the petitioners and the 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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WP(C) No.2735 of 2024

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(₹49,51,473+₹26,54,024/-) in 12 consecutive and equal monthly instalments along with accruing interest and other Bank charges, if any. First of such instalments shall be paid on or before 13.03.2024.

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

Sd/-

N.NAGARESH

JUDGE

spk

WP(C) No.2735 of 2024

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APPENDIX OF WP(C) 2735/2024

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PETITIONER EXHIBITS

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Exhibit P1TRUE COPY OF THE POSSESSION NOTICE
DATED 19.01.2024 ISSUED BY THE
RESPONDENT TO THE FIRST PETITIONER
Exhibit P2TRUE COPY OF THE POSSESSION NOTICE
DATED 19.01.2024 ISSUED BY THE
RESPONDENT TO THE SECOND PETITIONER

Abdul Rafeeque.a.v. v. Kerala State Co-Operative Bank Limited

Case brief

What is this about?

What did the court decide?

Abdul Rafeeque.a.v. v. Kerala State Co-Operative Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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