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2025 Supreme(Online)(Ker) 57297
IN THE HIGH COURT OF KERALA AT ERNAKULAM
BASANT BALAJI, J
MANIKANDAN KALADI – Appellant
Versus
FEDERAL BANK LTD – Respondent
WP(C) NO. 46399 OF 2025
For the Appellants/Petitioners: SRI.T.PRAVEEN, SRI.K.T.SAJU, SHRI.K.B.SAJAN, SHRI.SRINATH C.V.
For the Respondents: SHRI.LEO GEORGE
The court affirmed the need for financial compliance in loan agreements, balancing borrowers' needs against lenders' rights.
Headnote:The petitioners took loans from the first respondent Bank, secured by their property. Following non-repayment, the Bank classified the account as NPA, issuing a demand notice under Section 13(2) of the SARFAESI Act. The court found it appropriate to regularize the loan, allowing the petitioners to pay an initial sum and further installments. The ruling emphasized compliance with payment terms or risk of bank actions. FINAL ORDER: The petitioners to pay Rs.50,000/- before 12.01.2026 and subsequent dues as specified.
| Table of Content |
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| 1. loan agreement secured by property. (Para 1 , 2) |
| 2. court's ruling on loan regularization terms. (Para 3) |
JUDGMENT
(Dated this the 11th day of December, 2025)
The petitioners obtained two loans from the 1st respondent Bank for the construction of their residential house by mortgaging the property owned by the 1st petitioner having an extent of 4.05 Ares together with the building. Upon default in repayment in the loans, the Bank classified the account as NPA on 03.09.2025. Subsequently, a Demand Notice under Section 13(2) of the SARFAESI Act was issued on 16.10.2025, calling upon the Petitioners to pay the entire outstanding liability within 60 days. The petitioners approached this Court seeking regularization of the account by permitting them to pay the overdue amount in installments.
2. The learned Standing Counsel for the Bank, on instructions, submits that the overdue amount as on date is Rs.3,60,000/-. The Bank has no objection in regularizing the loan account.
3. Having heard the learned counsel on both sides, and taking note of the fact that the Bank is proposing to take physical possession of the property and since the Bank has no objection in regularizing the loan account, I deem it appropriate to dispose of this writ petition with the following directions:
a) The petitioners shall pay a lumpsum amount of Rs.50,000/-
(Rupees Fifty thousand only) on or before 12.01.2026.
b) After making the payment of Rs.50,000/- as directed above, the petitioners shall pay the remaining overdue amount, together with any accrued interest, cost and allied charges, in eight (8) equal monthly installments, starting from 05.02.2026 and the subsequent installments shall be paid on or before 5th of every succeeding months.
c) The petitioners shall continue to pay the regular EMIs/installments along with the installments as directed above.
d) In case of failure to make payment of the lumpsum amount of Rs.50,000/- or any of the installments as directed above, the Bank shall be free to take possession of the secured assets. The Bank shall proceed against the petitioners in accordance with the law to realize its dues.
