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2022 Supreme(Online)(KER) 35299
HIGH COURT OF KERALA
GOPINATH P, J
NAVEEN MATHEW PHILIP, – Appellant
Versus
M/S. SOUTH INDIAN BANK LTD., – Respondent
WP(C)/30450/2021
P.HARIDAS BIJU HARIHARAN P.C.SHIJIN RISHIKESH HARIDAS SUNIL SHANKER VIDYA GANGADHARAN
The decision underscores the court's recognition of balancing creditor rights with debtor relief in enforcement actions under the SARFAESI Act.
Headnote:
Securitisation - Writ Proceedings - SARFAESI Act Section List - This case involves proceedings under the SARFAESI Act concerning overdue payments on various loans. The court ruled on the petitioner's obligation to repay debts in installments while keeping coercive actions on hold, grounding its decision in contract principles and the need for fairness.
Fact of the Case:
Petitioner challenged actions initiated under the SARFAESI Act to recover amounts due from loans. Payments were partially made, leaving significant overdue amounts on various loans, yet no overdue on the housing loan.
Finding of the Court:
The court found that the petitioner had paid a significant portion of the loan liabilities and deserved an opportunity to clear the dues in installments while maintaining monthly EMI obligations.
Issues: Whether to allow the petitioner a reasonable opportunity to clear overdue payments and avoid coercive measures given the circumstances of the loan defaults.
Ratio Decidendi: The court held that a balance between the lender's rights and the borrower's ability to repay must be struck, allowing the petitioner to repay overdue amounts in installments while clarifying that defaults would allow for enforcement actions.
Final Decision: The writ petitions are disposed of with directions for payment in installments with provisions for default.
J U D G M E N T
These writ petitions have been filed challenging the proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as the SARFAESI Act) to recover the amounts due from the petitioner. Some among the facilities which relate to the business of the petitioner and are subject matter of W.P (C) No.30238/2021. The demand which is subject matter of W.P (C) No.30450/2021 is in respect of a housing loan availed by the petitioner and a Kissan Credit Card Loan. The petitioner has, pursuant to interim orders issued by this court from time to time, made some payment towards the loan liability. After giving credit of amounts so paid by the petitioner, the loan account which is subject matter of W.P (C) No.30238/2021, has an overdue amount of Rs.1,38,88,000/- while the overdue in respect of the Kissan Credit Card Loan is stated to be Rs.30,36,000/-. There is presently there is no overdue in respect of housing loan. However, it is the submission of the learned counsel appearing for the respondent that since the other loans of the petitioner are in default, the fact that there is no overdue in respect of housing loan, is not a factor that can be taken into consideration, as when other loans became NPA the housing loan will also have to be treated as NPA.
2. The learned counsel appearing for the petitioner in these cases would submit that if reasonable opportunity is given to the petitioner to clear the overdue installments together with the regular EMI, the petitioner will be in a position to settle the entire claims of the respondent bank.
3. Having heard the learned counsel for the petitioner and the learned counsel appearing for the respondent bank and considering the fact that the petitioner had paid nearly Rs.1.30 Crores towards the loan liability pursuant to interim directions issued by this court in these writ petitions from time to time, I am of the opinion that a reasonable opportunity can be granted to the petitioner to clear the liabilities in installments. The petitioner will also have to service the loans by paying the monthly EMIs in respect of the each of the loans. These writ petitions are therefore disposed of in the following directions;
(i) The petitioner shall pay the overdue amount of Rs.1,38,88,000/- in respect of the business loan availed by the petitioner which is subject matter of W.P (C) No.30238/2021 together with any accrued interest and costs in twenty (20) equated monthly instalments. The petitioner shall also pay the regular EMIs in respect of all loans which are subject matter of W.P (C) No.30238/2021 without fail;
(ii) The overdue amount in respect of Kissan Credit Card loan Rs.30,36,000/- shall be repaid in twenty (20) equated installments together with any accrued interest and costs along with regular EMIs due in respect of Kissan Credit Card loan and the EMIs due on the housing loan without any fail;
(iii) The first instalment of all the loans shall be paid on or before 30-09- 2022 and the subsequent instalments shall be paid on the last working day of every succeeding month;
(iv) In case of default of any one installment in respect of any loan which is subject matter of these writ petitions the respondent bank will be free to proceed against the petitioner in accordance with law;
(v) In order to enable the petitioner to repay the entire amounts, all coercive proceedings shall be kept in abeyance.
I make it clear that considering the facts and circumstances of the case no further extension of time will be granted to the petitioner under any circumstances.
Sd/- GOPINATH P.
JUDGE
Exhibit P3 TRUE COPY OF THE POSSESSION NOTICE UNDER SECTION
13(4) OF THE SARFAESI ACT DATED 02.12.2021.
APPENDIX OF WP(C) 30238/202
