The court established that structured repayment plans can be ordered to facilitate loan recovery while balancing the interests of borrowers and financial institutions.

JUDGMENT

(Dated this the 01st day of October, 2024)

The present writ petition has been filed seeking the following reliefs:

“i. Issue a writ of mandamus or any other appropriate writ or order commanding the respondent company to permit the petitioners to pay off the defaulted arrears due as evidenced by Exhibit.P4 possession notice in fifteen monthly installments along with the regular installments.

ii. Issue a writ of mandamus or any other appropriate writ or order restraining the respondent from proceeding in furtherance to the issuance of Exhibit.P4 possession notice issued u/s 13(4) of the SARFAESI Act so as to the enable the petitioners to pay off the defaulted arrears in installments along with the regular installments.

And iii. To pass such other orders or reliefs as this Hon'ble Court deems fit in the interest of justice.”

2. The petitioners had obtained two housing loans from the respondent financial institution for an amount of Rs.39,39,000/ and 22,99,000/- respectively. The petitioners had mortgaged their property having an extent of 10.12 Ares comprised in Survey No.66/1/14 situated in Puzhakkatiri Village, Perinthalmanna Taluk in Malappuram District.

3. The petitioners have committed serious default in repaying the loan amount as per the terms of the loan agreement, and therefore, the financial institution, after classifying the petitioners loan account as NPA, has proceeded against the petitioners under the provisions of the SARFAESI Act and Rules made thereunder.

4. The learned counsel for the financial institution on instructions submits that as of today the total overdue amount is Rs.8,40,336/- and the total outstanding is Rs.66,36,327/-. She further submits that if the petitioners make substantial upfront payment and the remaining overdue amount in few instalments as this Court may fix along with the regular instalments, the respondent financial institution shall regularize the loan accounts of the petitioners for making payment in terms of the loan agreement in as much as the loans advanced by the financial institution are repaid up to 2039.

5. Considering the aforesaid submission of the learned counsel for the respondent financial institution, the present Writ Petition is disposed of on the following terms:

i) The petitioners are directed to pay Rs.2,00,000/- along with one regular instalment on or before 15.10.2024 and the remaining overdue amount in five equal monthly instalments.

ii). The first instalment is to be paid on or before 15.11.2024, and the remaining four instalments on or before the 15th day of each succeeding month.

iii) In case of failure to make payment of Rs.2,00,000/- along with the one regular instalment or any subsequent instalments as directed above, the respondent financial institution shall be free to proceed against the petitioner further to realize its outstanding dues.

iv) If the petitioners make payments as directed above, the respondent financial institution shall regularize the loan accounts of the petitioners for making further payments in terms of the loan agreement.