Back
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
Dinesh Mehta, J.
Vijay S/o Shri Laxmi Kant Sharma – Appellant
Versus
State of Rajasthan & Ors. – Respondent
S.B. Civil Writ Petition No. 2034 of 2022
Decided On : 14-02-2022
Equitable Jurisdiction - Loan Repayment - The court exercised its equitable jurisdiction to allow the petitioner to settle the loan dues in installments and restrained the bank from seizing the petitioner's vehicle, which was his sole source of livelihood, as he had approached the court with a bona fide intention to settle the dues.
Fact of the Case:
The petitioner availed a credit facility for purchasing a taxi under a tourist permit but failed to repay the loan due to the impact of the COVID-19 pandemic on the tourist business, which led to a decrease in income. The petitioner expressed the desire to settle the loan but was concerned about the bank seizing his vehicle, which was his sole source of livelihood.
Finding of the Court:
The court, acknowledging its limitation of interference in matters related to the SARFAESI Act, exercised its equitable jurisdiction to allow the petitioner to settle the loan dues in installments and restrained the bank from seizing the petitioner's vehicle, considering the petitioner's bona fide intention to settle the dues.
Issues: Impact of COVID-19 on tourist business, petitioner's failure to repay the loan, petitioner's concern about the bank seizing his vehicle, and the court's equitable jurisdiction in matters related to loan repayment.
Ratio Decidendi: The court's exercise of equitable jurisdiction was influenced by the petitioner's bona fide intention to settle the loan dues and the potential impact on the petitioner's livelihood if the vehicle, his sole source of income, was seized by the bank.
Final Decision: The court allowed the petitioner to settle the loan dues in installments and restrained the bank from seizing the petitioner's vehicle, provided the petitioner adhered to the commitments. The bank was free to proceed in accordance with the law in case of the petitioner's failure to adhere to the commitments.
ORDER
1. The petitioner has availed the credit facility (vehicle loan) for purchasing a taxi under tourist permit.
2. Mr. Singhal, learned counsel for the petitioner submits that on account of spread of pandemic COVID-19, tourist business has been seriously impacted due to which petitioner’s income has come down and, therefore, he failed to perform the obligation towards the repayment of the above vehicle loan.
3. Learned counsel for the petitioner submits that the petitioner is desirous to square up the loan account and if the respondentBank seizes his vehicle, which is the sole source of his livelihood, it will affect his family and his life.
4. This Court is not oblivious of its limitation of interference in the matters relating to action taken under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ’SARFAESI Act’) in light of catena of judgments of Hon’ble the Supreme Court, however, considering that the petitioner has approached this Court with bonafide intention to settle the dues, this Court is inclined to exercise its equitable jurisdiction.
5. Learned counsel for the petitioner, on instructions, submits that out of the total dues of Rs.5,25,014/-, as mentioned in the order dated 13.12.2021, the petitioner would deposit the amount as following :
(i) Sum of Rs.1 lac by 15.03.2022;
(ii) Rs.2 lac by 30.05.2022; and
(iii) remaining amount by 31.10.2022.
6. In view of the above undertaking, let notices be issued to the respondents, returnable within six weeks.
7. In case petitioner subscribes to the above said undertaking, the respondent - Bank shall stand restrained from taking possession of petitioners’ vehicle - Ford Figo Aspire 1.5 TDCI, Registration No.RJ27-TA-6863 : Chasis No.MAJZXXMTKZHJ61640 and in case possession has already been taken, it shall not be put to distress.
8. Needless to observe that in the event of petitioner’s failure to adhere to any of the abovementioned commitments, the respondents shall be free to proceed in accordance with law.
The court's exercise of equitable jurisdiction in allowing the petitioner to settle the loan dues and restraining the bank from seizing the petitioner's vehicle, considering the petitioner's bona fid....
Court permits installment settlement of loan arrears under SARFAESI to avoid coercive action, conditional on compliance.
Writ petition dismissed for non-compliance with interim order; remedy lies before Debts Recovery Tribunal.
The court allows a debtor to repay dues in installments under specific conditions, emphasizing equitable resolution over coercive measures.
The court permitted the petitioner to repay outstanding loan liabilities in instalments due to business disruption caused by floods, emphasizing the need for reasonable repayment terms.
Non-payment of loan - The ends of justice will be met by granting liberty to petitioner to avail of statutory remedy under Section 17 of the SARFAESI Act, 2002 for redressal of his grievances, if so ....
The SARFAESI Act allows borrowers to challenge coercive lender actions before the DRT, ensuring accessible legal remedies.
The court will not intervene in financial disputes under Article 226 if alternative statutory remedies exist.
The court allows the petitioner to repay outstanding loans in installments under the SARFAESI Act, emphasizing compliance to avoid further coercive action.
The High Court may facilitate a consensual installment repayment plan for debts under the SARFAESI Act when the financial institution agrees, while preserving the creditor's right to resume coercive ....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
