Harikrishnan K.R., Vs the Manager — Banking and Recovery | Kerala HC (2025)

Harikrishnan K.R., Vs the Manager — Banking and Recovery | Kerala HC (2025)

What the court decided

AI extract

Outcome

Direction to the respondent bank to accept repayment of the entire overdue amount of Rs.1,47,331/- along with accrued interest, costs and charges and to regularise the loan account: petitioners to pay Rs.50,000/- on or before 30.04.2025 and the balance in four equal monthly instalments, the first on or before 30.05.2025 and subsequent instalments on the last working day of every succeeding month, while continuing to pay regular EMIs; upon repayment within time the account to be regularised; on default of any one instalment the bank free to proceed in accordance with law; all coercive proceedings kept in abeyance meanwhile. Writ petition disposed of accordingly.

Issue for consideration

Whether the petitioners, who challenged SARFAESI recovery proceedings initiated by the respondent bank, can be granted an opportunity to repay the overdue amount in instalments and obtain regularisation of the loan account (during the hearing, the petitioners confined their relief to this request, notwithstanding the bank's stand that a re-structured account fallen again into NPA cannot be upgraded unless 10% of the principal is remitted). +1 more

Court's answer

The petitioners were granted an opportunity to repay the total overdue on condition that Rs.50,000/- is paid on or before 30.04.2025 and the balance is paid in 4 equal monthly instalments, the first on or before 30.05.2025, subsequent instalments falling due on the last working day of every succeeding month.

Ratio / Principle

If the amount so directed is repaid within the time directed, the loan account shall be regularised.

Key takeaways

There will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.1,47,331/- along with any accrued interest, costs and charges from the petitioners and to regularise the loan account of the petitioners.ratio¶32
The petitioners shall continue to pay the regular EMIs/instalments along with the instalments directed by the court.ratio¶35
In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with the law.

Detailed headnote1 paragraphs

SARFAESI – Recovery proceedings – Instalment facility and regularisation – Petitioners challenged SARFAESI proceedings initiated by Axis Bank (notice u/s 13(2) dated 27/08/2024; demand notice dated 18/02/2025; MC No. 79 of 2025, Chief Judicial Magistrate, Alappuzha) but during hearing confined relief to repayment of overdue amount in instalments and regularisation of the loan account – Overdue stated at Rs.1,47,331/- as on 19.03.2025 – Court directed payment of Rs.50,000/- on or before 30.04.2025 and the balance in four equal monthly instalments, first on or before 30.05.2025, subsequent instalments on the last working day of every succeeding month, alongside continued regular EMIs – On repayment within time, bank to accept the entire overdue with accrued interest, costs and charges and regularise the account; on default of any one instalment, bank entitled to proceed in accordance with law – All coercive proceedings kept in abeyance to enable repayment – Writ petition disposed of (High Court of Kerala, Gopinath P. J., 02.04.2025).

WP(C) NO. 11042 OF 2025

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2025:KER:28797

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE MR. JUSTICE GOPINATH P.

WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA, 1947

WP(C) NO. 11042 OF 2025

AGAINST THE ORDER/JUDGMENT DATED IN MC NO.79 OF 2025 OF CHIEF

JUDICIAL MAGISTRATE, ALAPPUZHA

PETITIONERS:

1HARIKRISHNAN K.R.,
AGED 40 YEARS
RADHALAYA, MAVELIKKARA, TAZHAKARA, ALAPPUZHA, PIN -
690108

2RADHAKRISHNAN,
AGED 68 YEARS
SWAROOPANANDAN, RADHALAYA, MAVELIKKARA, TAZHAKARA,
ALAPPUZHA, PIN - 690108

BY ADV C.R.SURESH KUMAR

RESPONDENTS:

1 THE MANAGER, AXIS BANK LTD., 2ND FLOOR, NIHAL COMPLEX, KARAMANA, THIRUVANANTHAPURAM, PIN - 695002

2 THE AUTHORIZED OFFICER, AXIS BANK LTD., RAC, NIHAL COMPLEX, KARAMANA, THIRUVANANTHAPURAM, PIN - 695002

3 THE MANAGER, RESERVE BANK OF INDIA, BAKERY JUNCTION ROAD, NANDAVANAM, PALAYAM, THIRUVANANTHAPURAM, KERALA, PIN - 695033

SRI. MADHU RADHAKRISHNAN, SC

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
02.04.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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JUDGMENT

The petitioners have approached this Court challenging proceedings under the SARFAESI Act which have been initiated by the respondent bank for recovery of the amounts due from the petitioners.

During the course of hearing, petitioners have confined the relief to an opportunity for repaying the overdue amount in instalments and to obtain regularisation of the loan account.

Learned counsel appearing for the respondent bank submits that though the overdue amount is only Rs.1,47,331/- as on 19.03.2025, the loan account of the petitioners cannot be regularized. It is submitted that as per the guidelines issued by the Reserve Bank of India, once a loan account is re-structured, and thereafter if the account again falls into NPA status the loan account cannot be upgraded unless 10% of the principal amount is also remitted by the borrower. It is submitted that if the petitioners remit the overdue amount immediately, the loan account of the petitioners can be regularized.

Having regard to the circumstances of the case and the submissions made as recorded above, I am of the view that the petitioners can be granted an opportunity to repay the total

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2025:KER:28797 overdue on condition that Rs.50,000/- shall be paid on or before 30.04.2025 and the balance amount is paid in 4 equal monthly instalments, the first of which shall be paid on or before 30.05.2025. The subsequent instalments shall be paid on the last working day of every succeeding months and thereafter, if the amount so directed is repaid within the time as directed above, the loan account shall be regularised.

Accordingly, there will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.1,47,331/- along with any accrued interest, costs and charges from the petitioners and regularise the loan account of the petitioners in the following manner:

i. The petitioners shall pay a sum of Rs.50,000/(Rupees ten thousand only) on or before 30.04.2025; the balance overdue amount along with any accrued interest, costs and charges shall be repaid in four equal monthly instalments;

ii. The first instalment shall be paid on or before 30.05.2025 and the subsequent instalments shall be paid on or before the last working day of every succeeding months;

iii. Petitioners shall continue to pay the regular EMI’s/instalments along with the instalments directed above;

iv. In the event of default of any one instalment, the

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respondent bank shall be entitled to proceed in accordance with the law;

v. In order to enable the petitioners to repay the entire amounts, all coercive proceedings shall be kept in abeyance.

The writ petition is disposed of as above.

sd/-

 GOPINATH P.

JUDGE

Nsd

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APPENDIX OF WP(C) 11042/2025

PETITIONER EXHIBITS

Exhibit P-1A TRUE COPY OF THE NOTICE U/S 13(2) OF THE
SARFAESI ACT,2002 DATED 27/08/2024
Exhibit P-2A TRUE COPY OF THE DEMAND NOTICE DATED
18/02/2025
Exhibit P- 3A TRUE COPY OF THE &#8216;A’ DIARY PROCEEDING
DATED 12/03/2025 DOWNLOADED FROM THE OFFICIAL
WEBSITE(E-COURTS)
Exhibit P-4A TRUE COPY OF THE &#8216;A’ DIARY PROCEEDING
DATED 30/04/2025