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2018 Supreme(Online)(KER) 25836
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
BIJU A – Appellant
Versus
LEGAL OFFICER – Respondent
WRIT PETITION (CIVIL) 6293/2018
A borrower facing uncontrollable circumstances may be granted a structured repayment plan under the relevant financial legislation.
Headnote:
Loan - Housing Loan Default - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections Referenced: Relevant provisions concerning loan repayment and enforcement actions - Summary: The court addressed the petitioner's inability to make timely payments due to uncontrollable circumstances and established a repayment plan while outlining the consequences of default.
Fact of the Case:
The petitioner defaulted on a housing loan from the bank, leading to proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Finding of the Court:
The court noted the petitioner's claim of non-payment due to uncontrollable circumstances and granted a structured repayment plan, contingent on the petitioner meeting his payment obligations.
Issues: Whether the petitioner could be granted additional time to make overdue loan payments under the prevailing circumstances.
Ratio Decidendi: The court determined that, given the petitioner's circumstances, a reasonable repayment plan could be established under the law without preemptive enforcement actions.
Final Decision: The court allowed the petitioner to repay overdue amounts in instalments, deferring coercive actions provided payments are made as stipulated.
J U D G M E N T
Petitioner availed a housing loan from the Central Bank of India (the bank). He has not remitted the instalments of the loan 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 account. The petitioner is aggrieved by the said proceedings.
2. Heard the learned counsel for the petitioner as also the learned counsel for the bank.
3. When the matter was taken up, the learned counsel for the petitioner pointed out that non-payment of the instalments of the loan by the petitioner was due to reasons beyond his control and not wilful and that if a reasonable time is granted, the petitioner is prepared to liquidate the overdue in the loan account, so that he can repay the outstanding in the loan account in instalments.
4. The learned counsel for the bank, on instructions, submitted that a sum of Rs.4,04,280/- is overdue in the loan account.
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 petitioner shall pay the overdue in the loan account with the interest due, in ten equal monthly instalments, of which the first instalment shall be paid within one month from today. The petitioner shall also pay, in addition, the regular instalments of the loan on the due dates.
(ii) If the petitioner remits the overdue in the loan account as directed above, the bank shall regularise the loan account so as to enable the petitioner to liquidate the remaining liability in accordance with the terms of the loan.
(iii) Needless to say that if the petitioner liquidates the overdue as directed above, coercive action against the petitioner shall be deferred. It is, however, made clear that if the petitioner commits default in remitting any one of the instalments as directed, the proceedings initiated against the petitioner under the Act can be continued.
