SHANMUGAN K.S v. KERALA GRAMIN BANK

The petitioner has approached this Court aggrieved by the coercive proceedings for recovery of financial advance made by the Kerala Gramin Bank to the petitioner, invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,

The petitioner availed a Business Loan and a GECL Loan of ₹86,000/- from the respondent-Bank. 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 instalments promptly later due to Covid-19 pandemic. The repayment of loans fell into arrears. It happened due to reasons beyond the W.P.(C)No.20551 of 2024 :3: control of the petitioner.

Though the petitioner requested the Bank to permit the 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 Ext.P1 notice invoking Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

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 instalments. 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. W.P.(C)No.20551 of 2024 :4:

Standing Counsel entered appearance on behalf of the Bank and denied all the statements made by the petitioner. The petitioner committed default in repaying the loans.

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.P1 notice was issued in these circumstances. The petitioner has not advanced any legal reasons to thwart the coercive proceedings initiated by the Bank.

The Standing Counsel, however, submitted that if the petitioner is ready and willing to make a substantial payment soon and remit the balance overdue amount W.P.(C)No.20551 of 2024 :5: immediately thereafter, a short breathing time can be granted to the petitioner to clear the dues. The Standing Counsel submitted that the outstanding amount in Business Loan account due to the Bank from the petitioner as on 07.06.2024 is ₹6,39,866/- and in GECL Loan account is ₹41,696/- and the overdue amount in Business Loan account is ₹2,64,657/-.

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

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 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.

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. W.P.(C)No.20551 of 2024 :6:

The writ petition is therefore disposed of with the following directions: (i) The petitioner shall outstanding amount of ₹41,696/- in GECL Loan account within a period of one month from today. (ii) The petitioner shall remit the overdue amount of ₹2,64,657/- in Business Loan account in subsequent consecutive eight equal monthly instalments thereafter, along with accruing interest and other Bank charges, if any. (iii) If the petitioner commits default in making payments as directed above, the respondents will be at liberty to continue with coercive proceedings against the petitioner in accordance with law. W.P.(C)No.20551 of 2024 :7: (iv) The petitioner shall also pay current EMIs in Business Loan account along with the aforesaid payments. (v) If the petitioner makes payments as directed above, coercive proceedings, if any, against the petitioner shall stand deferred. Sd/- N. NAGARESH JUDGE W.P.(C)No.20551 of 2024 :8: APPENDIX OF WP(C) 20551/2024 PETITIONER'S EXHIBITS Exhibit P1 THE TRUE COPY OF THE NOTICE UNDER SECTION 13(4) ISSUED BY THE RESPONDENT DATED 24.04.2024