Back
2024 Supreme(Online)(KER) 36930
HIGH COURT OF KERALA
GOPINATH P, J
SINDHU K – Appellant
Versus
AUTHORIZED OFFICER, KERALA GRAMIN BANK – Respondent
WP(C) 45172/2024
The court allowed debtors to repay their liabilities in instalments due to financial difficulties caused by the pandemic, emphasizing the need for reasonable accommodation in extraordinary circumstances.
Headnote:
(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The petitioners challenged proceedings initiated by the respondent bank for recovery of amounts due under the SARFAESI Act. The court granted an opportunity for repayment in instalments due to financial crisis caused by the Covid-19 pandemic. (Paras 1-5)
(B) Financial Obligations - The court emphasized the importance of allowing debtors a chance to repay their liabilities, especially in light of extraordinary circumstances affecting their financial stability. (Paras 2-4)
Facts of the case:
The petitioners, facing financial difficulties due to the Covid-19 pandemic, sought relief from the bank's recovery proceedings initiated under the SARFAESI Act after taking a cash credit facility. The bank had obtained a decree for Rs.8,14,045/- against them.
Findings of Court:
The court directed the bank to accept repayment of the outstanding amount in twelve equated monthly instalments, with all coercive proceedings kept in abeyance.
Issues: The main issue was whether the petitioners could be granted an opportunity to repay their outstanding dues in instalments.
Ratio Decidendi: The court reasoned that given the financial crisis due to the pandemic, it was reasonable to allow the petitioners to repay their debt in instalments, while also ensuring that the bank's rights were protected in case of default.
Result: The writ petition is disposed of as above.
JUDGMENT
Dated this the 17th day of December, 2024
Petitioners have approached this Court challenging proceedings initiated by the respondent Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002(hereinafter referred to as the SARFAESI Act) for recovery of the amounts due from the petitioner.
2. Learned counsel appearing for the petitioner submits that the petitioner had taken cash credit facility from the respondent bank, but he could not repay that loan because of the financial crisis in connection with Covid-19 pandemic. During the course of hearing, petitioner has confined the relief to an opportunity for repaying the liability in instalments.
3. The learned Standing Counsel appearing for the respondent bank submits that, this is a case where the bank has filed a suit and obtained a decree against the petitioners. It is submitted that the outstanding amount as per the decree in O.S.No.626/2019 on the file of the Additional Munsiff Court, Nedumangad is Rs.8,14,045/- (Rupees Eight Lakhs Fourteen Thousand and Forty Five only) as on today. It is submitted that the mortgaged property of the petitioners is posted for sale tomorrow. However, the bank has no objection in granting some reasonable instalments to the petitioners to clear the liability. It is further submitted that regularisation is not possible.
4. Having regard to the circumstances of the case and the submissions made as recorded above, I am of the view that the petitioner can be granted an opportunity to repay the outstanding amount in twelve (12) equated monthly instalments.
5. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire outstanding amount of Rs.8,14,045/- (Rupees Eight Lakhs Fourteen Thousand and Forty Five only) along with accrued interest and bank charges from the petitioner in the following manner:
(i) The petitioner shall pay the outstanding amount of Rs.8,14,045/- (Rupees Eight Lakhs Fourteen Thousand and Forty Five only) shall be repaid in twelve (12) equated monthly instalments along with any accrued interest/costs;
(ii) The first instalment shall be paid on or before 10.01.2025 and the subsequent instalments shall be paid on or before the last working day of the succeeding months;
(iii) In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law;
(iv) In order to enable the petitioner to repay the entire amounts, all coercive proceedings shall be kept in abeyance.
(v) If the petitioner complies every condition imposed in this judgment, sale if any held on 18.12.2024 shall not be confirmed and shall ultimately be cancelled once the entire liability is settled.
The writ petition is disposed of as above.
