IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE MRS. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE WEDNESDAY, THE 10TH DAY OF OCTOBER 2012/18TH ASWINA 1934 WA.No. 1816 of 2012 IN WPC:19514/2012 AGAINST THE JUDGMENT IN WPC.19514/2012 DATED 11-09-2012 APPELLANT/PETITIONER: JESSY M.THOMAS, W/O. JOSEPH MATHEW, PULIYANMACKAL HOUSE VAYATTUPRAMBA, KARUVANCHAL P.O, KANNUR DISTRICT. BY ADV. SRI.J.S.AJITH KUMAR RESPONDENTS/RESPONDENTS: 1. THE CHIEF MANAGER AND AUTHORISED OFFICER, SOUTH INDIAN BANK, REGIONAL OFFICE, KOZHIKODE P.B.NO.933, CHAKKORATHUKULAM WEST HILL P.O. KOZHIKODE-673 005. 2. THE BRANCH MANANGER, SOUTH INDIAN BANK LTD., P.B.NO.41, I FLOOR SWADESHI SHOPPING COMPLEX, BANK ROAD, KANNUR, PIN: 670 001. 3. M/S. PULIYANMACKAL TRADERS, KARUVANCHAL, REPRESENTED BY ITS MANAGING PARTNER JOHN MATHEW-670 002. R1 & R2 BY SRI.K.K.JOHN,SC,SOUTH INDIAN BANK THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10-10-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA.No. 1816 of 2012 APPENDIX APPELLANT'S EXHIBITS: ANNEXURE A1 : TRUE COPY OF JUDGMENT IN WP(C) No.38315/2010 ON THE FILE OF THIS HONOURABLE COURT. /TRUE COPY/ PA TO JUDGE Manjula Chellur, C.J. & A.M. Shaffique, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.A. No. 1816 OF 2012 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 10th day of October, 2012 JUDGMENT
Manjula Chellur, C.J.
The appellant herein admittedly is the guarantor for the loan borrowed by the 3rd respondent firm. It is not in dispute that the property of this appellant was also secured to the Bank for the loan availed by the 3rd respondent. It is 90 cents of land along with a residential building in Re-survey No.30/1A of Vellad Village, Naduvil Panchayat, Thaliparamba Taluk, Kannur District.
2. The main grievance of the appellant is, in spite of One Time Settlement Scheme (for short 'OTS Scheme') struck at by the Bank and the 3rd respondent/principal borrower, the bank is proceeding against the appellant. Alternatively, the learned counsel contends that no such OTS Scheme was offered to the guarantor. The learned Judge, after referring to the contentions raised by the parties, did not accept the OTS stand of the appellant and proceeded to make directions at paragraph 6 of the judgment granting instalment facility to the appellant. Paragraph 6 of the judgment reads as under:
"6. Therefore, I direct that subject to the petitioner remitting Rs.5 lakhs within three weeks from today, coercive action now initiated against the petitioner will be deferred. If the petitioner pays the amount as above, balance amount due will be permitted to be paid in five equal monthly instalments. First instalment will be paid on or before 15.10.2012 and the subsequent instalments will be paid on or before 5th of every succeeding month. It is made clear that in the event of default in complying with any one of those conditions, Bank will be free to continue the action already initiated."
Aggrieved by the same, with the same contentions, the appellant is before us.
3. On perusal of Ext.P5, the account extract pertaining to the 3rd respondent principal borrower firm maintained by the respondent Bank, we notice that in the month of October, 2011 the total balance due to the Bank was `49,86,152.78. Apparently certain amounts came to be paid and including the previous amount paid, the total amount paid was `33,85,000/-. However, with the amounts again added to the amounts due i.e. the interest from time to time and other incidental charges, as on 01.12.2011, the 3rd respondent firm was still due a sum of `21,75,593.78. Therefore, we cannot accept the contention of the appellant that the entire amount was paid.
4. Even if there was any OTS scheme agreed between the bank and the principal borrower, the appellant being a close relative and managing partner of the 3rd respondent firm, could have placed on record such settlement arrived between the respondent Bank and principal borrower to claim protection from the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act') against the property of the appellant. Such document is not placed before us. Whether as of right the appellant could say, unless the Bank exhausts recovery proceedings against the principal borrower, no proceedings could be initiated against the guarantor. We are afraid such benefit is not given to the appellant under any statute including the Indian Contract Act.
In that view of the matter, in the absence of any full satisfaction recorded by the Bank towards the amounts due by the principal borrower, none of the arguments advanced by the appellant would be of any assistance to him. Accordingly, the appeal is dismissed. However, the entire payment schedule indicated at paragraph 6 of the judgment of the learned Single Judge is extended by one month.
Manjula Chellur, Chief Justice.
A.M. Shaffique, Judge.
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