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2010 Supreme(Online)(KER) 41077
HIGH COURT OF KERALA
P.R.RAMACHANDRA MENON, J
N.AYISHA – Appellant
Versus
CENTRAL BANK OF INDIA – Respondent
WP(C)/33712/2009
SRI.JOHN JOSEPH(ROY)
The judgment underlines the obligations of parties in financial agreements and the enforcement powers of banks under the SARFAESI Act.
Headnote:
SARFAESI - Property Dispute - SARFAESI Act Section List - The case discusses the provisions of the SARFAESI Act, focusing on the rights of banks to enforce security interests. The court directed the petitioner to clear liabilities, impacting procedural enforcement under the Act.
Fact of the Case:
The petitioner entered into a sale agreement to clear the liabilities of a third respondent towards a bank, but owed payments were not made, prompting the bank's actions under the SARFAESI Act.
Issues: Whether the petitioner can be granted relief from coercive actions by the bank under the SARFAESI Act depending on the adherence to payment of liabilities.
Ratio Decidendi: The court emphasized the legal binding nature of agreements made under financial transactions and the right of banks to recover dues through legal means when borrowers default.
Final Decision: The Writ Petition is disposed of with directions for compliance on payment of dues.
JUDGMENT
The petitioner has entered into Exhibit P1 agreement for sale of the property having an extent of 51.22 cents belonging to the third respondent, agreeing that the liability of the third respondent to the respondent bank in connection with the loan secured by the third respondent on the strength of the security created over the property in question will be cleared by the petitioner.
2. Since the repayment as scheduled was not effected by the borrower or by the guarantors, there was no other alternative for the respondent bank, but to proceed with steps under the SARFAESI Act , which made the petitioner to approach this Court.
3. When the matter came up for consideration before this Court on 7.12.2009 dispossession of the petitioner (who was put in possession by the third respondent pursuant to Exhibit P1 sale agreement) was intercepted on condition that the petitioner paid a sum of Rs.2,00,000/- on or before the 31st December, 2009. The learned counsel for the petitioner submits that the condition imposed by this Court has already been satisfied and that the entire outstanding liability will be cleared on or before 31st March, 2010.
4. The learned counsel appearing for the bank submits, on the basis of the instructions received, that the total outstanding liability was nearly 5.5 lakhs and that after giving credit to the amount already paid by the petitioner pursuant to the interim order dated 7.12.2009, the balance amount including further interest and costs is liable to be specified by the petitioner without any delay.
5. Considering the facts and circumstances of the case, the petitioner is directed to clear the entire outstanding liability on or before 31st March, 2010 as agreed, failing which the respondent bank will be free to proceed with further steps, for realisation of the entire amount in a lump sum, from the stage where it stands now. Subject to the above, the coercive proceedings shall be kept in abeyance. This however, will not bar the way of the petitioner in approaching the respondent bank seeking for the benefit of 'OTS' or such other benefits, concessions or allowances, on which event, the respondent bank shall consider and entertain the same to the permissible extent, if found fit and proper.
The Writ Petition is disposed of as above.
P.R.Ramachandra Menon, Judge cms
