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2017 Supreme(Online)(KER) 42991
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
AFEELA DILEEP KUMAR – Appellant
Versus
AXIS BANK – Respondent
WRIT PETITION (CIVIL) 39480/2017
The court supports flexibility in repayment terms under financial hardship, upholding the rights of both borrowers and lenders under the applicable act.
Headnote:
Loan - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 - Section 13 - Issuance of orders regarding overdue payments
Fact of the Case:
Petitioners defaulted on a term loan from the Bank, leading to proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, which the petitioners challenged in a writ petition.
Finding of the Court:
The court allowed the petitioners to pay the overdue amount in instalments, considering their submission that non-payment was due to factors beyond their control, while also protecting the Bank's rights under the Act.
Issues: Whether the petitioners could be granted leniency in repaying overdue loan amounts given their claims of financial hardship.
Ratio Decidendi: The court concluded that granting a payment schedule would balance the petitioners' needs with the Bank's rights under the Act, ensuring compliance with loan terms while deferring coercive measures.
Final Decision: Petitioners can pay overdue amounts in ten monthly instalments while maintaining regular payments on the loan.
J U D G M E N T
Petitioners, who have availed a term loan from the Axis Bank Ltd (the Bank), have not remitted the instalments of the loan as agreed. Consequently, proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (the Act) have been initiated by the Bank against the petitioners. The said proceedings is under challenge in the writ petition.
2. Heard the learned counsel for the petitioners as also the learned Standing Counsel for the Bank.
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 is granted, the petitioners are prepared to liquidate the overdue in the loan account. In other words, submission of the learned counsel for the petitioners was only for indulgence of this Court to permit the petitioners to pay the overdue in the loan account in convenient instalments.
4. The learned Standing Counsel for the Bank, on instructions, submitted that a sum of Rs.5,70,512/- 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 petitioners shall pay the overdue in the loan account in ten equal monthly instalments commencing from 7.1.2018 along with the regular instalments of the loan.
(ii) If the petitioners remit the overdue in the loan account as directed above, the Bank 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, proceedings already initiated against the petitioners under the Act can be revived and continued.
