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2018 Supreme(Online)(KER) 13944
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
ABDUL HAMEED – Appellant
Versus
THE PALAKKAD DISTRICT CO-OPERATIVE BANK LTD – Respondent
WP(C)/8190/2018
SRI.BINOY VASUDEVAN, SRI.M.SASINDRAN, SC, PALAKKAD DIST.CO.OP.BANK
The decision underscores the balance between creditor rights and the debtor's situation, allowing for a structured repayment plan.
Headnote:
Loan - Term Loan Default - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections Discussed: Enforcement Proceedings - The court emphasized the importance of providing a fair opportunity for repayment under the financial act, balancing creditor rights and debtor circumstances.
Fact of the Case:
The petitioner defaulted on a term loan from a cooperative bank, leading the bank to initiate enforcement proceedings under the relevant act. The petitioner argued that the defaults were due to uncontrollable circumstances.
Issues: Whether the petitioner should be allowed a schedule for repaying overdue installments without facing immediate coercive enforcement actions.
Ratio Decidendi: The court held that providing an opportunity to repay the debt in installments could be a reasonable approach, ensuring fairness in enforcement actions.
Final Decision: The petitioner must pay the overdue amount in ten installments, and if he complies, the bank will regularize his loan account.
J U D G M E N T
Petitioner availed a term loan from Palakkad District Co-operative Bank Limited(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 WPC No. 8190/18 2 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.4,00,506/- is overdue in the loan account. The learned counsel also submitted that the bank has no objection in this Court granting reasonable instalments to the petitioner for clearing the overdue.
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 WPC No. 8190/18 3 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.
