A stay order's expiration and failure to comply with court conditions negate entitlement to relief, especially for a recalcitrant defaulter.

JUDGMENT

The petitioner has approached this Court challenging the proceedings initiated against the petitioner under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘SARFAESI Act’) to recover amounts due under credit facilities availed by the petitioner from the respondent Bank.

2. According to the petitioner, the petitioner has challenged the proceedings initiated by the respondent Bank by filing SA No.408 of 2019 along with an application seeking stay of further proceedings. It is stated that though there was an interim order staying further proceedings against the petitioner, the respondent Bank filed an application to appoint an Advocate Commissioner to take physical possession of the secured assets.

3. The petitioner before this Court being aggrieved by the fact that the Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Kozhikode issued a notice on 11.01.2025, proposing to take physical possession of the secured assets. According to the petitioner this was in violation of Ext.P2 order of the Tribunal.

4. The petitioner preferred a representation before the respondent Bank praying that the proceedings for taking physical possession be deferred till the disposal of SA No.408 of 2019. Thereafter, the petitioner filed this Original Petition, seeking the following reliefs;

“a) Pass an Order declaring that Exhibit P5 and Exhibit P6 is inoperative since the 1st Respondent gives an in Exhibit P3 that no action will be taken in the secured asset before the closing of SA No. 408 of 2019 which is pending before Hon'ble DRT 1, Ernakulam.

b) Quash Exhibit P5 as it is obtained by the 1st Respondent without disclosing the in Exhibit P3 that further course of action will not be taken in the secured assets during the pendency of SA No. 408 of 2019 on the files of Hon'ble Debt Recovery Tribunal I, Ernakulam

c) Pass such other orders as this Hon'ble Court deems fit and proper in the facts and circumstances of the case.”

5. The learned counsel appearing for the respondent Bank submits that even going by the documents produced by the petitioner and the pleadings in the Original Petition, the stay granted by the Tribunal in SA No.408 of 2019 was extended only till 13.02.2020 and was not extended thereafter. It is submitted that on 25.01.2021, the petitioner sought time to amend/correct the cause title by impleading the Kerala State Co-Operative Bank in the place of Kozhikode District Co-Operative Bank. It is submitted that even after the passage of nearly three years, the petitioner did not take any steps to implead the Kerala State Co-Operative Bank. It is submitted that the Bank initiated steps to take physical possession of the secured assets only on account of the fact that the petitioner was no longer enjoying the benefit of a stay order from the Debt Recovery Tribunal. It is submitted that though the petitioner belatedly deposited a sum of Rs.2 lakhs pursuant to the interim order of this Court, the petitioner failed to comply with the subsequent order dated 11.02.2025 to pay a sum of Rs.40 lakhs towards the loan liability before 5.00 P.M on 14.02.2025. It is submitted that the present liability is in excess of Rs.1.76 crores and the Bank cannot hold up the proceedings till the disposal of SA No. 408 of 2019. It is submitted that the petitioner is a recalcitrant defaulter and has the means to pay off the entire liability and is purposefully delaying the payment of amounts due to the respondent Bank.

6. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent Bank, I am of the view that the petitioner cannot be granted any relief on the basis that the petitioner is enjoying an interim order in SA No.408 of 2019.

7. It is clear from a reading of the pleadings in the Original petition that the stay order granted by the Tribunal has not been extended beyond 13.02.2020. The proceedings o