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2020 Supreme(Online)(KER) 6545
HIGH COURT OF KERALA
P.V.ASHA, J
AL JASANI M – Appellant
Versus
KERALA FINANCIAL CORPORATION – Respondent
WP(C)/22636/2020
SRI.A.JAYASANKAR SRI.MANU GOVIND
The court established the principle that structured repayments can be ordered in light of financial difficulties while ensuring creditor interests are protected.
Headnote:
Loan - Writ Petition - Kerala Financial Corporation Act - Sections Not Specified - Court emphasizes the repayment schedule and consequences of default.
Fact of the Case:
A writ petition was filed seeking more time for loan repayment due to financial difficulties stemming from the Covid-19 pandemic. The loan of Rs.450 lakhs was initially sanctioned in 2015 with an equitable mortgage agreement.
Issues: Whether the petitioners can be granted additional time to repay the loan in installments amid financial hardships.
Ratio Decidendi: The court ruled that a structured repayment schedule was appropriate given the circumstances, emphasizing the need for timely repayments to support the corporation's financial health.
Final Decision: Writ petition disposed of; petitioners to repay overdue amount in installments starting January 2021.
JUDGMENT
Dated this the 25th day of November 2020 This writ petition is filed seeking time from the Kerala Financial Corporation for repayment of the loan availed from it. It is stated that the husband of the first petitioner availed a loan of Rs.450 lakhs for constructing a commercial building after executing an agreement on 8.1.2016 creating equitable mortgage. The writ petition is filed on receipt of Ext.P1 Notice issued on 4.12.2019, stating that petitioners are not in a position to make payment immediately.
2. Respondents 1 and 2 have filed a counter affidavit stating that the Corporation had sanctioned a term loan of Rs.450 lakhs on 15.10.2015 as per Ext.R1(a) proceedings and that the said loan was re-scheduled twice as per Ext.R1(b) and Ext.R1(c) on 13.2.2019 and 25.7.2018 respectively on the basis of the request from the loanee. It is stated that Exts.R1(d), R1(e) and R1(f) letters were issued on 3.8.2019, 5.10.2019 and 16.10.2020 respectively, demanding repayment of the loan amount. It is stated that on account of Covid 19 pandemic, the Corporation is not in a position to mobilise funds from Banks and bond market. It is stated that the balance sheet of the Corporation is under severe strain and its rating would be seriously affected in case the loanees do not make the repayment and it will have to stop its operations. It is also stated that the loan was sanctioned after affidavits were filed by the promoters.
3. The learned Counsel for the petitioners submits that the overdue amount would be paid in 5 installments starting from January, 2021.
4. The learned Standing Counsel submitted that along with the overdue amount, regular installments shall also be paid.
Therefore, this writ petition is disposed of with a direction to the petitioners to make the payment of overdue amount in 5 equal monthly installments starting from 10.1.2021 along with regular installments as shown in Ext.R1(h). In case there occurs any default in payment of any of the installments, the respondents would be free to take appropriate action.
Sd/-
P.V.ASHA JUDGE
APPENDIX PETITIONERS' EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE NOTICE DATED
4.12.2019 ISSUED BY THE 2ND RESPONDENT RESPONDENTS' EXHIBITS:
EXT.R1(a) TRUE COPY OF SANCTION COMMUNICATION DATED 15.10.2015 EXT.R1(b) TRUE COPY OF THE LETTER DATED
13.2.2019 EXT.R1(c) TRUE COPY OF THE LETTER DATED
25.7.2018 EXT.R1(d) TRUE COPY OF LETTER DATED 3.8.2019 EXT.R1(e) TRUE COPY OF LETTER DATED 5.10.2019 EXT.R1(f) TRUE COPY OF LETTER DATED 16.10.2020 EXT.R1(g) THE AFFIDAVIT GIVEN BY THE PROMOTER ON THE DETAILS OF THE PERSONAL ASSETS EXT.R1(h) ABSTRACT OF LOAN ACCOUNT AS ON
27.10.2020 [True copy] P.A to Judge Bb
