Statutory remedies under SARFAESI Act must be exhausted before seeking writ relief, particularly regarding recovery proceedings, emphasizing compliance with all repayment conditions.

JUDGMENT :

Muralee Krishna S., J.

1. This writ appeal is filed under Section 5(i) of the KERALA HIGH COURT ACT , 1958, by the petitioners in W.P.(C)No.4550 of 2024, dissatisfied by the judgment dated 27.11.2024, passed in that writ petition, whereby, the learned Single Judge disposed of the writ petition with a direction to the appellants to pay an amount of Rs.4,00,000/- to the Bank on or before 20.01.2025 and further directing that if the appellants make the payment as directed, both the loan accounts of the appellants shall be closed and the Bank shall issue No Due Certificate to the appellants and will hand over the title documents of secured assets.

2. According to the appellants, the 1^st appellant is engaged in the business of selling pooja items, and the 2^nd appellant is a Government Employee, who is working as Librarian at Ayurveda College, Kannur. The 1^st appellant availed a loan of Rs.9,75,000/- and the 2^nd appellant availed an overdraft facility loan, renewable every year, of Rs.16,00,000/- from the Kerala State Co-operative Bank Ltd., Pallickathodu Branch in the year 2016 for the purpose of development of business and construction of their house. The 1^st appellant is the guarantor to the loan availed by the 2^nd appellant, and he had created equitable mortgage of 76.80 Ares of land and building thereon in Sy.No.64/5 of Koovoppadam Village, Kottayam Taluk as security for repayment of the said loan facilities. Due to non-payment of the loan instalments, the Bank classified the loans as non-performing asset (‘NPA’ in short). Thereafter, the Bank initiated proceedings under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ for short) and the appellants were issued with Exts.P1 and P2 notices dated 14.12.2021 under Section 13 (2) of the SARFAESI Act. Followed by Exts.P1 and P2 notices, the Bank issued Exts.P3 and P4 possession notices dated 05.03.2022. The appellants then filed W.P.(C)No.8289 of 2022 before this Court and by Ext.P5 judgment dated 18.03.2022, this Court disposed of that writ petition. Paragraph 5 and the last paragraph of that judgment read thus:

“5. On a consideration of the circumstances and the submissions of the learned counsel, this Court is of the view that petitioners can be granted an opportunity to repay the overdue amount under the first loan amounting to Rs.19,00,348/- and the outstanding amount under the cash credit facility of Rs.31,54,704/- together in twenty instalments on the following conditions:

i. The loan liability under both accounts shall be repaid in twenty equated monthly instalments along with the regular EMIs of the liability under the personal loan.

ii. The first instalment shall be paid on or before 18.04.2022 and the remaining on the 18^th day of every succeeding months.

iii. Once the overdue amount of Rs.19,00,348/- due under the personal loan is cleared, the said account shall be regularised.

iv. In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law.

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

The writ petition is disposed of as above.”

3. The appellants contend that the repayment facility granted by this Court in Ext.P5 judgment is equivalent to a decree granting instalments, whereby the decree debt is allowed to be discharged in instalments. There is merger of the liability, which gets crystallised in the decree, and the original cause of action vanishes. The appellants further plead that they repaid the