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2018 Supreme(Online)(KER) 52259
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
AYYANTE VALLAPIL NAVAS – Appellant
Versus
THE AUTHORIZED OFFICER – Respondent
WP(C)/1744/2018
SRI.MATHEWS K.UTHUPPACHAN, SRI.TERRY V.JAMES, SRI.SHARAN SHAHIER, SRI.K.MADHUSOODANAN, SRI.T.G.PAUL, SRI.MATHEW JACOB (KUNNATHU), SRI.SYRIAC JOSEPH
A borrower may be allowed to restructure repayment terms in cases of non-wilful default, provided they comply with court-directed payment schedules.
Headnote:
Loans - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act - Sections Referenced: 13, 17 - The court granted relief to petitioners facing enforcement actions due to non-payment of loans, allowing them to repay overdue amounts in installments while emphasizing the strict adherence to the repayment schedule to avoid further action.
Fact of the Case:
The petitioners defaulted on loan repayments leading to bank proceedings under specific legislation for asset recovery. They claimed inability to pay due to factors beyond their control and sought time to resolve their dues.
Finding of the Court:
The court accepted the petitioners' plea for additional time to repay the overdue amount, allowing payment in installments while emphasizing compliance to avoid coercive actions.
Issues: Whether petitioners could be granted time to repay overdue loan amounts under the banks' enforcement proceedings?
Ratio Decidendi: The court prioritized the petitioners' circumstances of non-wilful default, permitting a structured payment plan while ensuring the bank's rights under the applicable Act were preserved.
Final Decision: The court allowed petitioners to repay overdue amounts in ten installments and deferred coercive actions contingent upon compliance.
JUDGMENT
Petitioners availed two term loans, from Federal Bank Limited (the bank). They have not remitted the instalments of the loans as agreed. Consequently, proceedings have been initiated by the bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act) for realisation of the outstanding in the loan accounts. The petitioners are aggrieved by the said proceedings.
2. Heard the learned counsel for the petitioners as also the learned counsel for the bank.
3. When the matter was taken up, the learned counsel for the petitioners pointed out that non-payment of W.P.(C.) No.1744/2018 2 the instalments of the loans by the petitioners was due to reasons beyond their control and not wilful and that if a reasonable time is granted, the petitioners are prepared to liquidate the overdue in the loan accounts, so that they can repay the remaining outstanding in the loan accounts in instalments.
4. The learned counsel for the bank, on instructions, submitted that a total sum of Rs.7,38,440/- is overdue in the loan accounts.
5. Having regard to the facts and circumstances of the case as also the orders passed by this Court in similar writ petitions, this writ petition is disposed of as follows :
(i) The petitioners shall pay the overdue in the loan accounts with the interest due, in ten equal monthly instalments, of which the first instalment shall be paid within one month from today. The petitioners shall also pay, in addition, the regular instalments of the loans on the due dates.
(ii) If the petitioners remit the overdue in the loan accounts as directed above, the bank shall W.P.(C.) No.1744/2018 3 regularise the loan accounts so as to enable the petitioners to liquidate the remaining liability in accordance with the terms of the loans.
(iii) Needless to say that if the petitioners liquidate the overdue as directed above, coercive action against the petitioners shall be deferred. It is, however, made clear that if the petitioners commit default in remitting any one of the instalments as directed, the proceedings initiated against the petitioners under the Act can be continued.
