Court Grants Petitioners Temporary Relief in Loan Repayment Dispute

# Court Grants Petitioners Temporary Relief in Loan Repayment Dispute

Background

The petitioners, who had taken out a housing loan from the respondent Cholamandalam Investment and Finance Co. Ltd. in 2020, approached the court seeking relief from the coercive proceedings initiated by the respondent for the recovery of the financial advance. The petitioners claimed that they had made prompt repayments during the initial period, but later fell into arrears due to reasons beyond their control.

Arguments

The petitioners argued that they were still in a position to clear the overdue amounts if given sufficient time to do so in easy monthly installments. They claimed that if the respondent was allowed to continue with the coercive proceedings and auction the secured assets, they would suffer significant hardship and loss.

The respondent, on the other hand, denied the petitioners' claims and stated that the loan was given in 2020, and the petitioners had deliberately defaulted on the repayments despite repeated reminders. The respondent argued that it had no choice but to proceed with the coercive proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 .

Court's Analysis and Reasoning

The court acknowledged the petitioners' claim that the default in repayment occurred due to reasons beyond their control and that they had provided substantial security to safeguard the respondent's interests. Considering the facts and circumstances of the case, the court was inclined to grant the petitioners a short and reasonable time to clear their liability.

Decision

The court directed the petitioners to remit an amount of ₹50,000 within three weeks and the balance overdue amount in subsequent consecutive 8 equal monthly installments, along with accruing interest and other administrative charges. The court also ordered the petitioners to pay the current EMIs along with the aforementioned payments.

The court stated that if the petitioners commit a single default in making the payments as directed, the respondent will be at liberty to continue with the coercive proceedings against the petitioners in accordance with the law. However, if the petitioners pay the installments as directed, any coercive proceedings against them shall stand deferred.