A guarantor's right to request a reasonable repayment arrangement was upheld, balancing creditor recovery with debtor relief.

JUDGMENT

Dated this the 15th day of December, 2023 The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Sundaram Home Finance Limited to the petitioner’s son, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002.

2. The respondents paid ₹9 lakhs to the petitioner’s son as Housing Loan in the year 2015. The petitioner stood as guarantor to the loan. The petitioner states that though the petitioner and his son made remittances promptly during the initial repayment period of the financial advance, they could not pay the repayment instalments promptly later due to financial crisis. The repayment of loan fell into arrears later. It happened due to reasons beyond the control of the petitioner and his son.

3. Though the petitioner requested the respondents to permit the petitioner and his son to repay the overdue amounts in easy monthly instalments, the respondents were not yielding. The authorities, instead, started coercive proceedings, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 and the Security Interest (Enforcement) Rules, 2002 and issued Exts.P1 and P2 notices.

4. The petitioner states that they are still in a position to clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly instalments. If the respondents are permitted to continue with the coercive proceedings and auction the secured assets provided by the petitioner, the petitioner and his son will be put to untold hardship and loss.

5. Standing Counsel entered appearance on behalf of the respondents and denied all the statements made by the petitioner. On behalf of the respondents, it is submitted that the loan was given to the petitioner’s son in the year 2015. The petitioner and his son committed default in repaying the loan.

6. The respondents repeatedly reminded the petitioner and his son and required them to clear the dues. The petitioner and his son deliberately omitted to do so. In the circumstances, the respondents had no other go than to proceed against the petitioner and his son invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002. The impugned Exts.P1 and P2 were issued in these circumstances. The petitioner has not advanced any legal reasons to thwart the coercive proceedings initiated by the respondents.

7. The Standing Counsel, however, submitted that if the petitioner is ready and willing to make a substantial payment soon and remit the balance overdue amount immediately thereafter, a short breathing time can be granted to the petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount due to the respondents from the petitioner’s son as on 15.12.2023 is ₹7,94,499/- and the overdue amount is ₹1,40,763/-.

8. I have heard the counsel for the petitioner and the Standing Counsel representing the respondents.

9. The specific case of the petitioner is that the petitioner and his son have been making the repayment and maintaining the loan account initially. The default in repayment of the loan occurred lately due to reasons beyond the control of the petitioner and his son. The petitioner has provided substantial security which will safeguard the interest of the respondents.

10. In the facts and circumstances of the case, I am inclined to dispose of the writ petition giving a short and reasonable time to the petitioner and his son to clear off the liability.

11. The writ petition is therefore disposed of with the following directions:

(i) The petitioner shall remit the overdue amount of ₹1,40,763/- in six consecutive and equal monthly instalments. First of such instalments shall be paid on or before

15.01.2024.

(ii) The petitioner shall remit the balance overdue amount in subsequent