Back
HIGH COURT OF KERALA
N. NAGARESH, J
SAJEEV S R – Appellant
Versus
THE AUTHORISED OFFICER – Respondent
WP(C) 37345/2023
Securitisation - Home Loan Default - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Sections [13(2)] - The court emphasized the necessity for banks to allow reasonable repayment options while balancing the rights of creditors to recover dues under the Act.
Fact of the Case:
The petitioner defaulted on a home loan from UCO Bank due to business losses, prompting the bank to initiate coercive recovery proceedings under the Securitisation Act, despite the petitioner's request for installment repayment options.
Issues: The issue centered on whether the bank could proceed with coercive recovery despite the petitioner's claims of hardship and ability to repay in installments.
Ratio Decidendi: The court determined that while banks have the right to recover dues, they must also consider alternatives for borrowers who demonstrate willingness and ability to repay in manageable increments.
Final Decision: The writ petition is disposed of, allowing the petitioner a structured repayment plan.
JUDGMENT
Dated this the 20th day of December, 2023 The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the UCO Bank to the petitioner, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 .
2. The Bank paid ₹48 lakhs to the petitioner as Home Loan in the year 2017. The petitioner states that though the petitioner made remittances promptly during the initial repayment period of the financial advance, he could not pay the repayment installments promptly later as the petitioner’s business went to loss. The repayment of loan fell into arrears. It happened due to reasons beyond the control of the petitioner.
3. Though the petitioner requested the Bank to permit the petitioner to repay the overdue amounts in easy monthly installments, the Bank authorities were not yielding. The 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 invoking Section 13 (2) of the .
4. The petitioner states that he is still in a position to clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly installments. If the respondent is permitted to continue with the coercive proceedings and auction the secured assets provided by the petitioner, he will be put to untold hardship and loss.
5. Standing Counsel entered appearance on behalf of the Bank and denied all the statements made by the petitioner. On behalf of the respondents, it is submitted that the loan was given to the petitioner in the year 2017. The petitioner committed default in repaying the loan.
6. The Bank repeatedly reminded the petitioner and required him to clear the dues. The petitioner deliberately omitted to do so. In the circumstances, the Bank had no other go than to proceed against the petitioner invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 . The impugned Ext.P1 notice was issued in these circumstances. The petitioner’s loan account was declared as NPA on 10.10.2023. The petitioner has not advanced any legal reasons to thwart the coercive proceedings initiated by the Bank.
7. The Standing Counsel, however, submitted that if the petitioner is 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 petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount due to the Bank from the petitioner as on 17.11.2023 is ₹49,75,304.76/- and the overdue amount as on 17.11.2023 is ₹2,46,216/-. The Standing Counsel further submitted that the petitioner had earlier filed W.P.(C) No.27482 of 2021. The said writ petition was disposed of granting instalments. Eight equal monthly installments were paid regularly and remaining installments have not been paid.
8. I have heard the counsel for the petitioner and the Standing Counsel representing the Bank.
9. The specific case of the petitioner is that the petitioner has 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 petitioner. The petitioner has provided substantial security which will safeguard the interest of the Bank.
10. 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 petitioner to clear off the liability.
11. The writ petition is therefore disposed of with the following directions:
(i) The petitioner shall remit ₹1 lakh on or before 30.12.2023 and the remaining overdue amount in three consecutive and equal monthly installments immediately thereafter al
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
