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2017 Supreme(Online)(KER) 24735
HIGH COURT OF KERALA
A.M.SHAFFIQUE, J
KUMARI K – Appellant
Versus
STATE BANK OF INDIA(FORMERLY STATE BANK OF TRAVANCORE) Advocate - S AMBILY, ,S AMBILY,K K CHANDRAN PILLAI (SR – Respondent
REVIEW PETITION 599/2017
The court emphasized that a borrower may seek to regularize outstanding dues on a loan to avoid asset seizure under the SARFAESI Act.
Headnote:
SARFAESI - Loan Regulation - SARFAESI Act - Section 14 - The court considered provisions regarding the enforcement of secured loans, specifically allowing the borrower to regularize the amount for one account to protect the secured asset from possession proceedings.
Fact of the Case:
A guarantor petitioned regarding two loan accounts, arguing a lower overdue amount in one account can save the secured assets from bank possession.
Finding of the Court:
The court found that allowing the payment of a smaller overdue amount could provide an opportunity to regularize the loan and potentially protect the asset from bank proceedings.
Issues: Whether the borrower can regularize one loan account to prevent possession by the bank.
Ratio Decidendi: The court highlighted that timely payment on a specified overdue amount could suspend asset possession actions as long as other accounts are not affected.
Final Decision: The review petition was disposed of, allowing a grace period for payment and safeguarding the secured asset.
O R D E R
As per judgment dated 15/6/2016, time was granted for the petitioner to pay the overdue amount in respect of two accounts in 10 equal monthly instalments starting from 14/7/2016 and to continue to remit the monthly instalments.
2. Learned counsel for the petitioner submits that two loans were taken by her son in which she was a guarantor only in respect of one loan account wherein term loan of `5 lakhs was taken.
3. The contention is that if the two loan accounts are separately considered, the overdue amount in the term loan account of `5 lakhs will only be `1,85,000/- as on today and therefore, if that amount is paid, the said loan can be regularised. It is submitted by the learned counsel for respondent that as per the judgment, the petitioner's son had taken another loan for `20 lakhs which is still outstanding and after the judgment, no amount had been paid. It is also submitted that learned Magistrate had issued an order under W.P. (C) No. 19256 of 2016 Section 14 of the SARFAESI Act permitting possession to be taken in respect of the properties secured in both the loans together.
4. Apparently, if the review petitioner is able to regularise the loan account in respect of the term loan of `5 lakhs, probably, the secured asset which is in her name can be saved from being proceeded by the Bank.
In such circumstances, I am of the view that some indulgence can be shown in the matter and accordingly, the following directions are issued:-
(i) That on payment of `1,85,000/- (Rupees One lakh eighty five thousand only) on or before 10/8/2017 and on payment of future instalments, the proceedings initiated for taking possession of the property secured for the term loan of `5 lakhs shall be kept in abeyance.
(ii) If the payments are not made as stated above, it shall be open for the Advocate Commissioner to take possession of the secured asset.
W.P. (C) No. 19256 of 2016 (iii) It is made clear that the Bank is entitled to proceed against other loan account for `20 lakhs as per the procedure prescribed.
Review petition is disposed of as above.
