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2018 Supreme(Online)(KER) 15692
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
SALAHUDEEN – Appellant
Versus
AUTHORIZED OFFICER, NEDUMANGAD – Respondent
WRIT PETITION (CIVIL) 9575/2018
A borrower facing genuine difficulties may be granted time to repay overdue loan amounts without immediate enforcement actions, contingent on compliance with court directives.
Headnote:
Loan - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act - [Act Section List: 2002] - The court directed payment of overdue amounts in installments, highlighting the duty to settle debts under the Act and the implications of default on enforcement proceedings.
Fact of the Case:
The petitioner defaulted on a term loan from a cooperative bank, leading to enforcement proceedings under the Act. The petitioner claimed the defaults were due to uncontrollable circumstances and sought a reasonable time to repay the outstanding amount.
Finding of the Court:
The court, considering the petitioner's circumstances, allowed the petitioner to repay the overdue amount in ten equal monthly installments, provided that future regular installments are also paid timely, with a warning about the consequences of further default.
Issues: Whether the petitioner can be granted additional time to repay overdue loan installments without facing immediate enforcement actions from the bank.
Ratio Decidendi: The court emphasized the necessity of allowing borrowers facing genuine difficulties a chance to remedy defaults, while also clarifying that continued default would permit ongoing enforcement actions under the Act.
Final Decision: The petition is disposed of, allowing repayment of overdue amounts in installments.
J U D G M E N T
Petitioner availed a term loan from Nedumangad Co-operative Urban Bank (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.3,88,638/- 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.
