Compliance with payment terms under the SARFAESI Act is essential to avoid further proceedings against a borrower classified as a defaulter.

JUDGMENT

(Dated this the 21st day of October, 2024)

The petitioner has obtained two loans from the respondent Bank, housing loan for Rs.15,71,030/- and the Suraksha loan for Rs.9000/-.

2. The learned counsel for the petitioner submits that the petitioner is not a willful defaulter and as the petitioner was in severe financial crisis, he did not pay equal monthly instalments on time. Therefore, the respondent Bank after classifying the loan accounts of the petitioner as NPA, proceeded under the provisions of the SARFAESI Act and Rules made thereunder.

3. The learned counsel for the respondent Bank on instructions submits that as of today, in respect of both the loans total overdue amount is Rs.2,17,667/- and the total outstanding amount is Rs.7,49,267/-. She further submits that if the petitioner makes substantial upfront payment along with one regular E.M.I in respect of both the loans, and the remaining overdue amount in few instalments as this Court may fix along with the regular instalments, the Bank shall not proceed further under the provisions of the SARFAESI Act and Rules made thereunder.

4. Considering the aforesaid stand of the Bank, the present writ petition is disposed of on the following terms:

i) The petitioner shall pay Rs.1,00,000/- along with one regular E.M.I in respect of both the loans on or before 07.11.2024 and the remaining overdue amount in eight equal monthly instalments along with the regular instalments.

ii) The 1st instalment is to be paid on or before 07.12.2024 and the remaining seven instalments on or before 7th day of each succeeding month.

iii) In case of failure to make payment of Rs.1,00,000/- along with one regular E.M.I in respect of both the loans or any other instalments as directed above, the Bank shall be free to proceed further against the petitioner to realize its outstanding dues.

iv) If the petitioner makes payments as directed above, the Bank shall regularize the loan account of the petitioner for making further payments in terms of the loan agreement.