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2017 Supreme(Online)(KER) 26362
HIGH COURT OF KERALA
K VINOD CHANDRAN, J
SREEJA RAJESH – Appellant
Versus
AUTHORIZED OFFICER – Respondent
WRIT PETITION (CIVIL) 6566/2017
Courts can provide repayment options and suspend recovery actions based on debtor hardship while ensuring compliance with repayment terms.
Headnote:
Recovery - Loan Default - Various Acts - The judgment dictates repayment terms for loans and outlines the conditions under which recovery proceedings may be initiated against the borrower.
Fact of the Case:
The borrower initiated writ petitions concerning recovery proceedings by the bank for defaulted loans including a cash credit, housing loan, and personal loan, while seeking installment payments due to financial hardship.
Finding of the Court:
The court granted the petitioner a facility to repay the defaulted amounts in stipulated installments, provided conditions for abeyance of recovery proceedings, and required regularization of loans upon full repayment.
Issues: Whether the borrower could be allowed to repay the outstanding amounts through installments and whether recovery proceedings should be held in abeyance under the presented circumstances.
Ratio Decidendi: Considering the admitted defaults and the petitioner's financial constraints, the court formulated a fair repayment plan while preserving the bank's rights to initiate recovery if the terms were not adhered to.
Final Decision: The writ petition is disposed of with conditions for repayment and abeyance of recovery.
J U D G M E N T
Both the writ petitions are filed by the very same borrower form the respondent Bank. The writ petitions are concerned with the recovery proceedings initiated against the mortgaged property for realisation of the debts in three loans; being, a cash credit, a housing loan and a personal loan. The cash credit account is overdue, and has a total outstanding of Rs.5,42,868/-. The housing loan has a total outstanding of Rs.11,32,465/- and a defaulted arrear of Rs.92,000/-. The personal loan has a nominal due of Rs.14,000/-.
The petitioner prays for instalments to settle the dues.
W.P.(C) Nos. 6566 & 8319/2017
2. The learned Counsel for the respondent Bank submits that the petitioner has to satisfy the entire outstanding and there is no regularisation possible for the cash credit. If the entire defaulted arrears are paid of the housing loan, then, there could be a regularisation of the housing loan.
3. The liability and the default are admitted.
Considering the facts of the case and the alleged impecunious circumstances of the petitioner, this writ petition is disposed of on the following terms.
(i) The petitioner shall pay Rs.92,000/- defaulted in the housing loan on or before 31.03.2017.
(ii) The equated monthly instalment of March, 2017 in the housing loan shall be paid along with the monthly instalment of April, 2017.
(iii) The outstanding amounts in the cash credit and personal loan as on 15.04.2017 shall be intimated to the petitioner, within three weeks from today.
W.P.(C) Nos. 6566 & 8319/2017 (iv) The respondent shall grant twelve monthly instalments for the payment of the outstanding in the cash credit and the personal loan, starting from 01.05.2017, and continued on the 1st of the successive months, which shall be paid along with the regular EMI of the housing loan, on the due dates.
(v) Recovery proceedings shall be kept in abeyance on condition that the remittances as per this order are made without any default.
(vi) On the petitioner making the default of the amounts directed to be paid before 30.03.2017 or two defaults in repaying either the further instalments or the regular EMIs, the recovery steps initiated shall revive and continue.
(vii) The respondent shall issue a statement of the future interest accrued on the defaulted arrears every three months and the same shall be paid along with the next month's instalment, as granted by this Court, and W.P.(C) Nos. 6566 & 8319/2017 after satisfaction of the arrears, as the 13th instalment.
(viii) On the petitioner satisfying the entire arrears, the recovery proceedings shall be unenforceable and the petitioner allowed regularisation by permitting EMI remittance as per the original agreement in the housing loan.
The Writ Petition is disposed of as above, making it clear that the respondent will be free to proceed with the recovery if the above conditions are not complied with.
