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2025 Supreme(Online)(Ker) 57296
IN THE HIGH COURT OF KERALA AT ERNAKULAM
BASANT BALAJI, J
JITHIN RAVI – Appellant
Versus
THE SOUTH INDIAN BANK LTD. – Respondent
WP(C) NO. 46383 OF 2025
For the Appellants/Petitioners: SHRI.SALISH ARAVINDAKSHAN
For the Respondents: SRI. P. A. AUGUSTINE, SC
Court establishes the procedure for considering a One-Time Settlement in cases of loan default under the SARFAESI Act, balancing creditor's rights and debtor's opportunities.
Headnote:The petitioner sought direction for the respondent bank to consider their representation for a One-Time Settlement of their loan defaulted on. The bank had classified the loan as NPA in 2024 and proceeded under the SARFAESI Act. The Court directed the petitioner to remit Rs.10,00,000/- to allow consideration of the proposal in the representation. The final ruling stated that all coercive actions should be deferred until a response is provided by the bank.
| Table of Content |
|---|
| 1. request for consideration of representation regarding loan default (Para 1 , 2 , 3) |
| 2. court order to defer coercive actions pending consideration of settlement proposal (Para 4) |
JUDGMENT
(Dated this the 11th day of December, 2025)
The petitioner approached this Court with a direction to the respondent Bank to take up Ext.P2 representation and to consider the same and to defer all further proceedings until such time.
2. The petitioner availed a term loan of Rs.30,00,000/- and an Overdraft (OD) facility of Rs.50,00,000 from the respondent Bank in the year 2018 by offering an extent of 16.19 Ares along with residential building in Sy No. 1219/7A/1 of Mulavoor Village, Muvattupuzha Taluk, as security. Upon default, the account was declared as NPA and the respondent bank issued a demand notice dated 05.03.2025 under Section 13(2) of SARFAESI Act , 2002. When Ext.P3 notice was issued by the Advocate Commissioner on 27.11.2025, the petitioner filed Ext.P2 representation on 01.12.2025 seeking a One-Time Settlement of the loan.
3. The learned Standing Counsel, on instructions, submits that the loan was classified as NPA in 2024 and the outstanding amount as of date comes to Rs.50,15,000/-.
4. Since the limited request of the petitioner is only the consideration of Ext.P2 representation, I deem it appropriate to dispose of this writ petition, directing the petitioner to remit Rs.10,00,000/- (Rupees ten lakhs only) within two weeks from today, and the respondent bank shall consider the proposal in Ext.P2 and pass orders. Till such time, all coercive proceedings shall be deferred.
The writ petition is disposed of as above.
