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2013 Supreme(Online)(KER) 17480
HIGH COURT OF KERALA
V.CHITAMBARESH, J
MRS LALY JOSEPH – Appellant
Versus
THE AUTHORISED OFFICER – Respondent
WRIT PETITION (CIVIL) 26442/2013
Interim orders under the SARFAESI Act require strict compliance to maintain status quo and prevent coercive measures against non-compliant debtors.
Headnote:
Status Quo - Interim Orders - SARFAESI Act - Section 13, 14 - The court addressed procedural safeguards in interim orders under the SARFAESI Act, emphasizing the need for balance between creditor rights and debtor compliance to maintain status quo pending litigation.
Fact of the Case:
The petitioner failed to comply with interim payment orders set by the Debts Recovery Tribunal, which resulted in a default of Rs.6,34,000. The court considered the implications of this default on ongoing coercive actions by the bank under the SARFAESI Act.
Finding of the Court:
The court acknowledged the petitioner's past compliance with some payments but noted the significant default. It extended the deadline for payment, indicating that compliance could prevent further coercive measures.
Issues: Whether the failure to comply with the interim payment orders necessitated further coercive actions against the petitioner under the SARFAESI Act.
Ratio Decidendi: The court ruled that the petitioner must adhere to the payment schedule to avoid coercive measures, reinforcing the importance of compliance with interim orders in financial disputes.
Final Decision: The writ petition is disposed of with the condition of payment compliance by the petitioner to avoid coercive actions.
J U D G M E N T
Ext.P3 interim order of the Debts Recovery Tribunal, Ernakulam in S.A.No.252/2013 filed by the petitioner and another inter alia states as follows:
“4. In the circumstances, as of now without going into the merits of the contentions raised in the SA/IA, and taking note of the submissions made by the learned Counsel on either side, the Tribunal is inclined to grant an opportunity. Accordingly, considering the balance of convenience and on grounds of equity and fair play, and to secure the ends of justice, the respondents/defendants are directed to maintain 'status quo' as of date and restrained from proceeding with any further action under the impugned measures, till 23.05.2013 subject to the condition that the petitioners/applicants shall deposit a sum of Rs.2,00,000/- or or before 30.3.2013, and a sum of Rs.3,00,000/- on or before 30.4.2013, and a further sum of Rs.3,00,000/- or or before 30.05.2013, to the respondents/defendants either by way of bank draft/pay order or cash, to be appropriated by the respondents/defendants to the credit of the petitioner's/applicant's dues recoverable under the impugned action. Besides from June, 2013 onwards, the petitioners/applicants should continue to remit EMIs regularly every month (within the stipulated due date as per the terms of original sanction), until further orders of the Tribunal. That, memo of compliance should be filed by the petitioners/applicants before the Tribunal, then and there.”
2. It is conceded that the petitioner deposited a sum of Rs.2 lakhs before 30.3.2013 and another sum of Rs.3 lakhs before 30.4.2013. But the petitioner has defaulted to deposit Rs.3 lakhs before 30.5.2013 and to pay the equated monthly instalments from June 2013 onwards. The defaulted amounts including Rs.3 lakhs as stated above comes to about Rs.6,34,000/-. I extend the period for payment of Rs.6,34,000/- till 30.11.2013 to avert further coercive steps. I hasten to add that the parties would be governed by further orders to be passed in S.A.
No.252/2013 pending before the Debts Recovery Tribunal.
3. The bank has initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) in regard to other property of the petitioner as well. That is the subject matter of S.A.No.303/2013 pending before the Debts Recovery Tribunal. Ext.P6 interim order passed therein has also not been complied with by the petitioner evidently. But Ext.P6 order is not the subject matter of the present writ petition and it is unnecessary to deal with the same herein.
4. The coercive steps pursuant to Ext.P5 order shall be put on hold if the petitioner deposits the sum of Rs.6,34,000/- within the time fixed. The coercive proceedings can continue if the petitioner commits default in the payment of the amount as directed.
The writ petition is disposed of.
