Allowed

Prince Mathew v. the Kerala State Co. Operative Bank

Kerala HC10 Jan 2024WP(C)/422/2024

Case brief

AI extract

What is this about?

The Court allowed the writ petition in part by granting the petitioners twelve months to clear overdue loan amounts in equal monthly installments, deferring the bank's coercive recovery proceedings under the SARFAESI Act subject to compliance.

What did the court decide?

Petitioners directed to pay ₹6,44,126/- in 12 equal monthly installments along with interest/coercive proceedings deferred.

Prince Mathew Vs the 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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WEDNESDAY, THE 10TH DAY OF JANUARY 2024/20TH POUSHA, 1945

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WP(C) NO. 422 OF 2024

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PETITIONERS:

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1 PRINCE MATHEW

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AGED 38 YEARS, S/O. THOMAS MATHEW
SHEELA BHAVAN, KOODAL P.O.
PATHANAMTHITTA DISTRICT, PIN – 689 693.

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2THOMAS MATHEW
AGED 68 YEARS, S/O. MATHEW SHEELA BHAVAN,
KOODAL P.O. PATHANAMTHITTA DISTRICT,
PIN – 689 693.

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BY ADVS.

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LIJU.V.STEPHEN
INDU SUSAN JACOB
P.M.HRIDYA
TAJ K. TOM

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RESPONDENTS:

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1THE KERALA STATE CO OPERATIVE BANK
REGIONAL OFFICE, P.B.NO. 104,
OPP.MUNICIPAL TOWN HALL, ALAPPUZHA,
REPRESENTED BY THE AUTHORISED OFFICER.,
PIN – 688 001.

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2AUTHORISED OFFICER
THE KERALA STATE CO-OPERATIVE BANK,
REGIONAL OFFICE, P.B.NO. 104,
OPP. MUNICIPAL TOWN HALL, ALAPPUZHA,
PIN – 688 001.

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BY ADV

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N.RAGHURAJ

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 10.01.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:

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W.P.(C) No.422 of 2024

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: 2 :

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JUDGMENT

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Dated this the 10^th day of January, 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 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 ₹32 lakhs to the 1st petitioner as Consumption Loan in the year 2020. 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. The repayment of loan fell into arrears later severe financial set back. It happened 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

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W.P.(C) No.422 of 2024

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: 3 :

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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 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 petitioners. On behalf of the respondents, it is submitted that the loan was given to the 1^st petitioner in the year 2020. The petitioners committed default in repaying the loan.

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The Bank repeatedly reminded the petitioners and required then 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

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W.P.(C) No.422 of 2024

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: 4 :

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of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The impugned Ext.P1 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 the petitioners is 44,07,489/- and the overdue amount as on 10.01.2024 is₹ ₹6,44,126/-.

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I have heard the learned Counsel for the petitioners and the learned 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

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W.P.(C) No.422 of 2024

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: 5 :

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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 petitioners to clear off them 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 overdue

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amount of ₹6,44,126/- in 12 equal and consecutive monthly instalments along with accruing interest and other Bank charges, if any.

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(ii) First of such instalments shall be paid on or before 12.02.2024. (iii) 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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(iv) The petitioners shall also pay current

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EMIs along with the aforesaid payments.

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W.P.(C) No.422 of 2024

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: 6 :

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(v) If the petitioners pay the instalments as

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directed above, any coercive proceedings against the petitioners shall stand deferred. (vi) In the meanwhile, the petitioner will be at liberty to approach the Bank for a private sale if any bona fide purchaser comes, without violating the aforesaid payment schedule. The Bank may take a decision in that regard after

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considering the bona fide of the same.

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Sd/-

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N. NAGARESH JUDGE

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AMR

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W.P.(C) No.422 of 2024

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: 7 :

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APPENDIX OF WP(C) 422/2024

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PETITIONERS’ EXHIBITS

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Exhibit P1TRUE COPY OF THE NOTICE DATED 28-09-2023
ISSUED BY THE RESPONDENT BANK UNDER
S.13(2) OF SARFAESI ACT.

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Exhibit P2TRUE COPY OF THE REPRESENTATION DATED
17-12-2023 SUBMITTED BY THE PETITIONER
TO THE CHIEF MINISTER.
Exhibit P3TRUE COPY OF REPRESENTATION DATED
10-12-2023 MADE BY THE PETITIONERS TO
THE RESPONDENT BANK.

Prince Mathew v. the Kerala State Co. Operative Bank

Case brief

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Prince Mathew v. the Kerala State Co. Operative Bank

Case brief

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