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2016 Supreme(Online)(KER) 37939
HIGH COURT OF KERALA
A. K. Jayasankaran Nambiar, J
SADANANDAN P – Appellant
Versus
CHIEF MANAGER – Respondent
WRIT PETITION (CIVIL) 59/2016
The court's ruling illustrates the judicial inclination to accommodate borrowers' financial difficulties while ensuring creditors' rights are protected.
Headnote:
Securitisation - Loan Default - SARFAESI Act - Sections Unspecified - The court directed the petitioners to repay outstanding loans in installments, considering their financial hardship, and provided conditions under which the bank could proceed with recovery actions.
Fact of the Case:
The petitioners defaulted on loans from the respondent bank, leading to recovery proceedings under the SARFAESI Act. They challenged these steps, seeking to repay the outstanding amounts in installments due to financial hardship.
Finding of the Court:
The court acknowledged the petitioners' financial difficulties and permitted them to pay the total outstanding amount in seven monthly installments, while placing conditions for the continuance of recovery proceedings.
Issues: Whether the court should allow the petitioners to repay their outstanding loans in easy installments despite the bank's recovery actions.
Ratio Decidendi: The court emphasized the importance of balancing financial hardship and the bank's right to recover debts, allowing installment payments contingent upon compliance.
Final Decision: The court permitted the petitioners to repay the amounts in installments with conditions imposed on default.
J U D G M E N T
The petitioners, who had availed of loans 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 petitioners impugn the steps initiated by the respondent bank for recovery of the loan amounts.
2. I have heard the learned counsel appearing on behalf of the petitioners as also the learned Standing counsel for 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 petitioners is to permit them to remit the balance amounts outstanding to the bank in easy instalments. Taking into account the plea of financial hardship raised by the petitioners, I dispose the writ petition with the following directions:-
(i) The overdue amount in respect of the housing loan and the agricultural term loan availed by the petitioners is stated to be Rs.28,598/- + Rs.1,78,365/- respectively. Similarly for closing the cash credit facility, the petitioners are required to pay Rs.2,00,408/-. Accordingly, if the petitioners pay the total amount of Rs.4,07,371/- together with accrued interest in seven equal and successive monthly instalments commencing from 25.01.2016, and continues to keep up the regular instalments as per the original loan schedules in the housing loan account and the agricultural term loan account, the recovery steps initiated against the petitioners by the respondent bank shall be kept in abeyance.
(ii) It is made clear that if the petitioners commit a default in respect of any of the instalments, they will lose the benefit of this judgment and the respondent bank will be free to continue the recovery proceedings against them from the stage at which they presently stand. (iii) The respondent bank shall furnish the petitioners with an up-to-date statement of dues within ten days from today, so as to enable the petitioners to comply with the directions in this judgment.
A.K.JAYASANKARAN NAMBIAR JUDGE
