The court held that borrowers may be permitted installment repayments under the SARFAESI Act to avoid undue hardship, supporting borrower rights while respecting lender entitlements.

JUDGMENT

Petitioner has approached this Court challenging proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) for recovery of the amounts due upon a loan availed by the petitioner.

2. During the course of hearing, petitioner has confined the relief to an opportunity for repaying the overdue amount in installments and to obtain regularization of the loan account.

3. The learned counsel appearing for the respondent Bank submits that the term of the loan is said to be expired on January 2025. It is submitted that the present overdue amount itself is Rs.49,76,844/- (Rupees Forty Nine Lakh Seventy Six Thousand Eight Hundred and Forty Four Only) as on 21-12-2022. It is submitted that despite the assertion of the petitioner there is no One Time Settlement Scheme is now in operation and therefore the benefits of OTS cannot be extended to the petitioner. It is submitted that the petitioner is a recalcitrant defaulter. It is further submitted that the Bank has no objection in accepting the overdue amount in installments along with regular installments/EMI’s payable by the petitioner.

4. I have heard Adv. Nimmy Johnson, learned counsel for the petitioner as well as Adv. P.C.Sasidharan, the learned counsel for the respondent.

5. Having regard to the circumstances of the case and the situation now prevailing, apart from the submissions made as recorded above, I am of the view that the petitioner can be granted an opportunity to repay the overdue amount in 15 installments and thereafter, if the amount so directed is repaid within the time as directed above, to have the loan account regularized.

6. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.49,76,844/- (Rupees Forty Nine Lakh Seventy Six Thousand Eight Hundred and Forty Four Only) along with bank charges from the petitioner and regularize the loan account of the petitioner on the following conditions:

(i) The overdue amount of Rs.49,76,844/- (Rupees Forty Nine Lakh Seventy Six Thousand Eight Hundred and Forty Four Only) shall be repaid in 15 equated monthly installments along with any accrued interest and costs;

(ii) The first installment shall be paid on or before

16-01-2023. The subsequent installments shall be paid on or before the 16th day of the succeeding months;

(iii) Petitioner shall continue to pay the regular installments/EMI’s along with the installments as directed above;

(iv) In the event of default of any one installment, the respondent bank shall be entitled to proceed in accordance with law.

(v) In order to enable the petitioner to repay the entire amounts, all coercive proceedings shall be kept in abeyance.

It will also be open to the petitioner to seek for the benefit of OTS, if any new scheme for OTS is introduced by the respondent Bank.

The writ petition is disposed of as above.