J. ---------------------------- W.P.(C) No. 13654 of 2024 · Kerala High Court

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

The Bank paid ₹9 Lakhs to the 1st petitioner as Mortgage Loan in the year 2017. The petitioners state that though the petitioners made remittances promptly during the initial repayment period of the financial advance, they could not pay the repayment instalments promptly later. The repayment of loan fell into arrears later. It happened due to reasons beyond the control of the petitioners. W.P(C).13654/2024 3

Though the 1st petitioner requested the Bank to permit the 1st petitioner to repay the overdue amounts in easy monthly instalments, 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 Exts.P1 and P2 notices.

The petitioners state that they are still in a position to clear the overdue amounts towards the loan, if sufficient time is given to clear the dues in easy monthly instalments. If the respondents are permitted to continue with the coercive proceedings and auction the secured assets provided by the 2nd petitioner, the petitioner will be put to untold hardship and loss.

Standing Counsel entered appearance on behalf of the Bank and denied all the statements made by the W.P(C).13654/2024 4 petitioners. On behalf of the respondents, it is submitted that the loan was given to the 1st petitioner in the year 2017. The 1st petitioner committed default in repaying the loan.

The Bank repeatedly reminded the 1st petitioner and required him to clear the dues. The 1st petitioner deliberately omitted to do so. In the circumstances, the Bank had no other go, than to proceed against the petitioners invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The impugned Exts.P1 and P2 were issued in these circumstances. The petitioners have not advanced any legal reasons to thwart the coercive proceedings initiated by the Bank.

The Standing Counsel, however, submitted that if the petitioners are ready and willing to make a substantial payment soon and remit the balance overdue amount immediately thereafter, a short breathing time can be granted to the petitioners to clear the dues. The Standing Counsel submitted that the outstanding amount due to the Bank from W.P(C).13654/2024 5 the petitioner is ₹13,19,345/- and the overdue amount as on

26.03.2024 is ₹9,24,785/-.

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

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

In the facts and circumstances of the case, I am inclined to dispose of the writ petition giving a short and reasonable time to the petitioner to clear off the liability.

The writ petition is therefore disposed of with the following directions: (i) The petitioners shall remit the overdue amount of ₹ 9,24,785/- in subsequent consecutive 10 equal monthly instalments along with accruing interest and other Bank charges, if any. First of such installments W.P(C).13654/2024 6 shall be paid on or before 03.05.2024. (iii) If the petitioners commits default in making payments as directed above, the respondents will be at liberty to continue with coercive proceedings against the petitioners in accordance with law. (iv) The petitioners shall also pay current EMIs along with the aforesaid payments. (v) If the petitioners pay the amount as directed above, any coercive proceedings against the petitioners will stand deferred. Sd/- N.NAGARESH JUDGE Sbna/ W.P(C).13654/2024 7 APPENDIX OF WP(C) 13654/2024 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 A TRUE COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DATED 19.8.2023 A TRUE COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DATED 16.3.2024.