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2018 Supreme(Online)(KER) 28748
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
NASAR K V – Appellant
Versus
AUTHORISED OFFICER – Respondent
WRIT PETITION (CIVIL) 40894/2017
The court can facilitate a repayment plan under the Act considering the financial situation of the borrowers.
Headnote:
Loan - Petitioners' Payment Plan - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 1, 2, 3 - Court allows installment plan for overdue payments.
Fact of the Case:
Petitioners failed to pay loan installments, prompting financial institution to initiate proceedings under the Act. Petitioners argued inability to pay was beyond their control and sought leniency.
Finding of the Court:
Court acknowledged the petitioners' circumstances and agreed with the financial institution's proposal for a structured repayment plan, balancing the rights of both parties under the Act.
Issues: Whether the petitioners should be granted a reasonable time to clear overdue loan installments despite ongoing legal proceedings.
Ratio Decidendi: The court recognized that while proceedings could continue under the Act, a fair repayment plan could be accommodated due to the circumstances surrounding the petitioners' non-payment.
Final Decision: Petitioners allowed to pay overdue in six installments, with conditions set by the court.
J U D G M E N T
Petitioners availed a term loan from M/s.Magma Housing Finance Limited (the financial institution). They have not remitted the instalments of the loan as agreed. Consequently, proceedings have been initiated by the financial institution 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 account.
The petitioners are aggrieved by the said proceedings.
2. Heard the learned counsel for the petitioners as also the learned counsel for the financial institution.
3. When the matter was taken up, the learned counsel for the petitioners pointed out that non-payment of the instalments of the loan by the petitioners was due to reasons beyond their control and not wilful and that if a reasonable time WPC No. 40894/17 2 is granted, the petitioners are prepared to liquidate the overdue in the loan account, so that they can repay the outstanding in the loan account in instalments.
4. The learned counsel for the financial institution, on instructions, submitted that a sum of Rs.6,00,000/- is overdue in the loan account. The learned counsel also submitted that the financial institution has no objection in this Court granting reasonable instalments to the petitioner for clearing the overdue.
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 account with the interest due, in six 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 loan on the due dates.
(ii) If the petitioners remit the overdue in the loan WPC No. 40894/17 3 account as directed above, the financial institution shall regularise the loan account so as to enable the petitioners to liquidate the remaining liability in accordance with the terms of the loan.
(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.
