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2017 Supreme(Online)(KER) 30946
HIGH COURT OF KERALA
A. K. Jayasankaran Nambiar, J
KRISHNAMOHAN S – Appellant
Versus
THE AUTHORISED OFFICER, STATE BANK OF INDIA – Respondent
WRIT PETITION (CIVIL) 28725/2017
The court recognized the possibility of restructuring loan repayment terms based on the debtor's financial hardship, balancing creditor rights and borrower relief.
Headnote:
Recovery - Loan Default - SARFAESI Act - Sections Not Specifically Cited - Summary of the Act emphasizes the bank's rights in recovering dues through secured interests, and court highlighted alternative repayment arrangements based on petitioner’s financial hardship.
Fact of the Case:
The petitioner defaulted on a cash credit facility with the respondent bank, which initiated recovery proceedings under the SARFAESI Act, prompting the petitioner to seek relief.
Issues: Whether the petitioner can be allowed to repay the defaulted loan in instalments, thus suspending recovery actions initiated by the bank.
Ratio Decidendi: The court established that financial hardship could justify permitting repayment of loans in instalments while retaining the bank's right to recover outstanding dues.
Final Decision: Petitioner allowed to repay loan in 12 instalments; recovery steps stayed pending compliance.
J U D G M E N T
The petitioner, who had availed cash credit facility from the respondent bank, defaulted in repayment of the same. Consequently, the respondent bank initiated proceedings under the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter referred to as the 'SARFAESI Act', to recover the loan amounts. Ext.P1 is the possession notice. In the writ petition, the petitioner impugns the steps initiated by the respondent bank for recovery of the loan amounts.
2. I have heard the learned counsel for the petitioner and the learned Standing Counsel appearing on behalf of the respondent bank.
3. On a consideration of the facts and circumstances of the case and the submissions made across the bar, I note that the sole prayer of the petitioner is to permit him to remit the balance amounts outstanding to the bank in easy instalments. Taking into account the plea of financial hardship raised by the petitioner, I dispose the writ petition with the following directions:-
(i) The total amount outstanding from the petitioner to the respondent bank, in respect of the loan, is stated to be Rs.37,87,786/- together with accrued interest and other charges. Accordingly, if the petitioner pays the aforesaid amount of Rs.37,87,786/- together with accrued interest and other charges in 12 equal and successive monthly instalments commencing from 15.09.2017, the recovery steps initiated against the petitioner by the respondent bank shall be kept in abeyance.
(ii) It is made clear that, if the petitioner commits a default in respect of any of the instalments, he will lose the benefit of this judgment and the respondent bank will be free to continue the recovery proceedings against him from the stage at which they presently stand.
(iii) The respondent bank shall furnish the petitioner with an up-to-date statement, of the dues position together with interest, within ten days from today so as to enable the petitioner to discharge the liability in accordance with the directions in this judgment.
