BY AD v. DEVAPRASANTH P.J

The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Irinjalakuda Town Co-operative Bank to the petitioner, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

2. The Bank paid ₹5,62,000/- towards Term Loan in the year 2021 and 35,00,000/- towards Over Draft in the ₹ year 2016 to the petitioner and ₹ 5,95,000/- towards Term Loan to the partner of the petitioner in the year 2021. The property of the petitioner was given as security for all the three loans. The petitioner states that though the petitioner made remittances promptly during the initial repayment period of the financial advance, he could not pay the repayment WP(C) NO.687 OF 2024 3 installments promptly later due to Covid-19 pandemic. The repayment of loan fell into arrears. It happened due to reasons beyond the control of the petitioner.

3. Though the petitioner requested the Bank to permit the petitioner to repay the overdue amounts in easy monthly installments, the Bank authorities were not yielding. The authorities, instead started coercive proceedings invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Security Interest (Enforcement) Rules, 2002 and issued Ext.P14 notice.

4. The petitioner states that he is still in a position to clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly installments. If the respondent is permitted to continue with the coercive proceedings and auction the secured assets provided by the petitioner, he will be put to untold hardship and loss. WP(C) NO.687 OF 2024 4

5. Standing Counsel entered appearance on behalf of the Bank and denied all the statements made by the petitioner. On behalf of the respondent, it is submitted that the loan was given to the petitioner in the years 2016 and 2021. The petitioner committed default in repaying the loan.

6. The Bank repeatedly reminded the petitioner and required him to clear the dues. The petitioner deliberately omitted to do so. In the circumstances, the Bank had no other go than to proceed against the petitioner invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,

2002. The impugned Ext.P14 notice was issued in these circumstances. The petitioner has not advanced any legal reasons to thwart the coercive proceedings initiated by the Bank.

7. The Standing Counsel, however, submitted that if the petitioner is ready and willing to make a substantial WP(C) NO.687 OF 2024 5 payment soon and remit the balance overdue amount immediately thereafter, a short breathing time can be granted to the petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount towards Over Draft due to the Bank from the petitioner as on 09.01.2024 is ₹41,00,161/- and the overdue amount as on 09.01.2024 is ₹ 3,07,010/- ( 2,06,081 + 1,00,929) ₹ ₹

8. I have heard the counsel for the petitioner and the Standing Counsel representing the Bank.

9. The specific case of the petitioner is that the petitioner has been making the repayment and maintaining the loan account initially. The default in repayment of the loan occurred lately due to reasons beyond the control of the petitioner. The petitioner has provided substantial security which will safeguard the interest of the Bank.

10. In the facts and circumstances of the case, I am inclined to dispose of the writ petition giving a short and WP(C) NO.687 OF 2024 6 reasonable time to the petitioner to clear off the liability.

11. The writ petition is therefore disposed of with the following directions: (i) The petitioner shall remit the overdue amount ₹ 3,07,010/- ( 2,06,081+ ₹ ₹ 1,00,929) within a period of one month along with accruing interest and other Bank charges, if any. (ii) After clearing the overdue amounts, the petitioner shall approach the Bank and make a proposal for renewal of Over Draft within a period of two weeks, in which case the respondents shall consider the proposal and take decision. (iii) Coercive proceedings if any, shall be deferred if the petitioner complies with all the WP(C) NO.687 OF 2024 7 afore directions, till the Bank takes a decision as directed above. Sd/- N.NAGARESH JUDGE WP(C) NO.687 OF 2024 8 APPENDIX OF WP(C) 687/2024 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 Exhibit P3 Exhibit P4 Exhibit P5 Exhibit P6 Exhibit P7 Exhibit P8 Exhibit P9 Exhibit P10 Exhibit P11 A TRUE COPY OF THE DEMAND NOTICE BEARING NO. SEC/118/1-2022-OD17 DATED 3/1/2023 THUS ISSUED TO THE PETITIONER BY THE RESPONDENT A TRUE COPY OF THE DEMAND NOTICE BEARING NO. SEC/118/2-2022/LTUCT15 ISSUED TO THE PETITIONER BY THE RESPONDENT DATED 3/1/2023 TRUE COPY OF THE RECEIPT DATED 6/5/2023 EVIDENCING THE PAYMENT OF RS. 40,000/- TRUE COPY OF THE RECEIPT DATED 6/5/2023 EVIDENCING THE PAYMENT OF RS.1,60,000 TRUE COPY OF THE RECEIPT DATED 25/5/2023 EVIDENCING THE PAYMENT OF RS. 1,00,000 TRUE COPY OF THE RECEIPT DATED 16/6/2023 EVIDENCING THE PAYMENT OF RS.1,00,000 A TRUE COPY OF THE JUDGMENT DATED 20/6/2023 PASSECL BY THIS HON'BLE COURT IN W.P.(C).NO. 6610/2023 TRUE COPY OF THE RECEIPT DATED 1/7/2023 EVIDENCING THE PAYMENT OF RS.1,00,000 TRUE COPY OF THE RECEIPT DATED 12/7/2023 EVIDENCING THE PAYMENT OF RS. 51,000 TRUE COPY OF THE RECEIPT DATED 12/7/2023 EVIDENCING THE PAYMENT OF RS. 20,500/- TRUE COPY OF THE RECEIPT DATED 12/7/2023 EVIDENCING THE PAYMENT OF RS. 28,500 WP(C) NO.687 OF 2024 9 Exhibit P12 Exhibit P13 Exhibit P14 TRUE COPY OF THE RECEIPT DATED 24/7/2023 EVIDENCING THE PAYMENT OF RS.1,00,000 A TRUE COPY OF THE REPRESENTATION DATED 27/11/2023 SUBMITTED BY THE PETITIONER BEFORE THE RESPONDENT A TRUE COPY OF DEMAND NOTICE DATED 23/11/2023 ISSUED BY THE RESPONDENT TO THE PETITIONER