Disposed

Nazar S v. the Authorized Officer

Kerala HC29 May 2024WP(C)/35081/2023

Case brief

AI extract

What is this about?

Petitioner aggrieved by coercive proceedings under S.R.F.A. Act sought time to repay defaulted housing loan. Court allowed relief by permitting repayment in installments, deferring coercive measures if dues are cleared.

What did the court decide?

Deferral of coercive proceedings; petitioner directed to clear overdue amount in 10 monthly installments starting 01.07.2024 along with current EMIs.

Nazar S Vs the Authorized Officer — 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 29^TH DAY OF MAY 2024 / 8TH JYAISHTA, 1946 WP(C) NO. 35081 OF 2023

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PETITIONER:

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NAZAR S., AGED 39 YEARS, S/O SULAIMAN, OMAYAMPALLAM, VENGODI, ELAPPULLY, PALAKKAD, PIN – 678622

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BY ADV M.R.SASITH

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RESPONDENT:

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THE AUTHORIZED OFFICER, KARNATAKA BANK LTD., ASSET RECOVERY MANAGEMENT BRANCH, 3RD FLOOR, KARNATAKA BANK BUILDNG, KODIALBAIL, MANGALURU, PIN – 575003.

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BY ADV. DENNIS VARGHESE

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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.35081/2023

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JUDGMENT

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Dated this the 29^th day of Ma y, 2024

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The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Karnataka Bank Ltd. 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 ₹12 lakhs to the petitioner as Housing Loan in the year 2017. 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 constraints. The repayment of loan fell into arrears later. It happened due to reasons beyond the control of the petitioner.

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W.P.(C) No.35081/2023

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: 3 :

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Though the petitioner requested the Bank to

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permit the petitioner 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 Ext.P1 notice.

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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 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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Standing Counsel entered appearance on behalf 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 2017. The petitioner committed default in repaying the loan.

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W.P.(C) No.35081/2023

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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.P1 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 balance overdue 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 28.05.2024 is ₹18,96,336.41 and the overdue amount as on 28.05.2024 is about ₹5 lakhs.

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W.P.(C) No.35081/2023

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I have heard the counsel for the petitioner and

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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 account 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

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following directions:

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(i) The petitioner shall remit the overdue amount in 10 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 01.07.2024.

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W.P.(C) No.35081/2023

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(ii) If the petitioner commits default in

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making payments as directed above, the respondent will be at liberty to continue with coercive proceedings against the petitioner in accordance with law.

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

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(iv) If the petitioner pays the amount as

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directed above, any coercive proceedings against the petitioner will stand deferred.

Sd/-

N. NAGARESH

JUDGE

W.P.(C) No.35081/2023

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APPENDIX OF WP(C) 35081/2023

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PETITIONER'S EXHIBITS:

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Exhibit P1

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THE TRUE COPY OF THE POSSESSION NOTICE DATED 21.09.2023.

Nazar S v. the Authorized Officer

Case brief

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Nazar S v. the Authorized Officer

Case brief

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