Disposed

Suresh K v. the Manager, Kerala Bank

Kerala HC2 Feb 2024WP(C)/361/2024

Case brief

AI extract

What is this about?

Writ petition challenging coercive recovery proceedings under the SARFAESI Act for loan default. The Court granted the petitioners 12 months to repay the outstanding amount in monthly instalments, deferring coercive proceedings if payments are made regularly.

What did the court decide?

Petitioners granted 12 months to repay ₹37,66,069/- in equal monthly instalments with interest. Coercive proceedings deferred subject to compliance.

Suresh K Vs the Manager, Kerala 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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FRIDAY, THE 2^ND DAY OF FEBRUARY 2024 / 13TH MAGHA, 1945

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WP(C) NO. 361 OF 2024

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PETITIONERS:

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1 SURESH K AGED 59 YEARS, S/O. KARUNAN PILLA, KALLARACKAL THAZHE HOUSE, KADAPPATTOOR P.O., PALA, KOTTAYAM DISTRICT, PIN – 686575.

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2 ULLAS SEBASTIAN AGED 45 YEARS, S/O. LATE SRI. DEVASIA, AMBATTU HOUSE, KADAPATTOOR. P.O, KOTTAYAM, PIN – 686574.

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BY ADVS. BABY THOMAS MARIAMMA JOSEPH GEORGE T.J INDRAJITH S KAIMAL ALICIA JOSE AISWARYARAJ

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RESPONDENTS:

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1 THE MANAGER, KERALA BANK KERALA BANK( KERALA STATE CO-OPERATIVE BANK(FORMERLY) THE KOTTAYAM DISTRICT CO-OPERATIVE BANK ), PALA MAIN BRANCH, KOTTAYAM DISTRICT, PIN – 686575.

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2 THE AUTHORIZED OFFICER, KERALA BANK KERALA BANK( KERALA STATE CO-OPERATIVE BANK(FORMERLY) THE KOTTAYAM DISTRICT CO-OPERATIVE BANK ) KOTTAYAM REGIONAL OFFICE, P.B NO. 140, CENTRAL JUNCTION, KOTTAYAM – 686001.

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BY ADV.SRI.ATHUL SHAJI

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.361 of 2024

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J U D G M E N T

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Dated this the 2^nd day of February, 2024

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The petitione rs have app roached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Kerala State Co-operative 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 ₹15 lakhs to the 1^st petitioner and ₹20 lakhs to the 2^nd petitioner as Overdraft Facility. 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 Covid-19 pandemic and heavy loss in the business. The repayment of loan fell into arrears. It happened

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W.P.(C) No.361 of 2024

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due to reasons beyond the control of the petitioners.

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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 to P3 notices.

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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 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

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W.P.(C) No.361 of 2024

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petitioners. The petitioners committed default in repaying the loan.

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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 to P3 notices 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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W.P.(C) No.361 of 2024

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submitted that the outstanding amount due to the Bank from the petitioners as on 31.01.2024 is ₹37,66,069/-.

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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 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 the outstanding amount of ₹37,66,069/- in 12

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W.P.(C) No.361 of 2024

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equal and consecutive monthly instalments along with accruing interest and other Bank charges, if any. The first instalment shall be paid on or before 05.03.2024.

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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 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.

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Sd/- N. NAGARESH JUDGE

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ams

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W.P.(C) No.361 of 2024

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APPENDIX OF WP(C) 361/2024

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PETITIONER EXHIBITS

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Exhibit P1 TRUE COPY OF THE NOTICE U/S. 13(2) OF THE SARFAESI ACT DATED 21.10.2023 Exhibit P2 TRUE COPY OF THE DEMAND NOTICE ISSUED TO THE 2ND PETITIONER DATED 26.06.2023 Exhibit P3 TRUE COPY OF THE NOTICE DATED 27.12.2023

Suresh K v. the Manager, Kerala Bank

Case brief

What is this about?

What did the court decide?

Suresh K v. the Manager, Kerala Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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