IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 21ST JUNE 2011 / 31ST JYAISHTA 1933 WP(C).No. 5397 of 2011(Y) ------------------------- PETITIONER(S): --------------- M.MUHAMMADALI, KUYILTHODUKAYIL HOUSE, PATHIMANGALAM, P.O.KUNNAMANGALAM,KOZHIKODE-673571. BY ADV. SRI.O.D.SIVADAS RESPONDENT(S): --------------- 1. THE AUTHORISED OFFICER, (CHIEF MANAGER), THE FEDERAL BANK LTD., REGIONAL OFFICE, KOZHIKODE – 673 001. 2. THE GENERAL MANAGER, ASSET RECOVERY, FEDERAL BANK HEAD OFFICE, ALUVA, ERNAKULAM DISTRICT – 683 101. 3. THE BRANCH MANAGER, THE FEDERAL BANK LTD., KODUVALLY BRANCH, KOZHIKODE DISTRICT – 673 001. 4. THE RESERVE BANK OF INDIA, REPRESENTED BY DEPUTY MANAGER, BAKERY JUNCTION, THIRUVANANTHAPURAM – 695 001. ADV. SRI.K.K.CHANDRAN PILLAI, SENIOR ADVOCATE FOR R1 TO R3 SRI.A.S.SAJUSH PAUL FOR R1 TO R3 SRI.THOMAS JAMES MUNDACKAL FOR R1 TO R3 SRI.BOBBY THOMAS FOR R1 TO R3 SRI.M.L.JISHNU FOR R1 TO R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 5397 of 2011(Y) APPENDIX PETITIONER'S EXHIBITS : EXT.P1 : COPY OF THE NOTICE DTD.27.8.2009 ISSUED by the 1ST RESPONDENT. EXT.P2: COPY OF THE JUDGMENT DTD.28.7.2010 IN W.P(C) NO.3890/2010 EXT.P3: COPY OF THE REQUEST DTD.23.12.2010 EXT.P4: COPY OF THE PROCEEDINGS DTD.6.1.2011 ISSUED BY THE 1ST RESPONDENT RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.A TO JUDGE C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.5397 of 2011-Y ---------------------------------------- Dated this the 21st day of June, 2011. J U D G M E N T Consequent to default committed by the petitioner in repaying a cash credit facility availed from respondents 1 to 3, proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was initiated. 2. The petitioner had approached this court on an earlier occasion by filing W.P(C) No.3890/2010 seeking direction for considering 'one time settlement' of the loan account by granting benefits as contemplated under the circulars issued by the Reserve Bank of India and also in view of the mandate given by the Apex Court in Central Bank of India V. Reveendra (2002(1) KLT 743). In Ext.P2 judgment this court dispose of the above writ petition observing that if any application filed by the petitioner pointing out the figure for which he is ready and willing to clear the liability under the compromise W.P(C) No.5397 of 2011-Y 2 settlement, the same shall be considered by the respondent Bank and appropriate orders shall be passed extending permissible concession. The writ petition was disposed of directing the petitioner to make such representation within a period of three weeks. Subject to payment of a sum of Rs.2 lakhs the respondents were directed to consider such representation and to take appropriate decision thereof within one month thereafter. 3. It is evident that consequent to Ext.P2 judgment the petitioner had submitted an offer for settlement expressing willingness to pay a total sum of Rs.4 lakhs in full and final settlement of the arrears due under the loan account. It is also stated that the conditions stipulated in Ext.P2 judgment was complied and a sum of Rs.2 lakhs was paid within the time extended by this court through a subsequent order. In Ext.P4 the respondent Bank had given a reply after considering the offer made under Ext.P3. The petitioner was informed that his request to permit payment of a sum of Rs.4 lakhs towards full and final settlement of the dues is not acceptable. Therefore the offer was W.P(C) No.5397 of 2011-Y 3 rejected. It is now stated that pursuant to Ext.P4, further coercive steps are initiated and the Bank had taken symbolic possession of the property, invoking provisions under Section 13(4). Under such circumstances the petitioner is seeking interference of this court to restrain the coercive steps. The petitioner inter alia challenges the decision taken in Ext.P4 and also seeks direction to respondents 1 to 3 to settle the account by providing maximum possible deductions and concessions by waiver of penal interest and other charges. 4. Considering the factual circumstances as narrated above, it is evident that the offer made by the petitioner for one time settlement has already been considered and rejected by respondents 1 to 3. Under such circumstances, this court may not be justified in issuing any further direction for a fresh consideration or for accepting any offer which may be made by the petitioner. Waiver of interest/penal interest and expenses and acceptance of any offer for 'one time settlement' are matters which are coming within the purview of the policy decisions of the respondent W.P(C) No.5397 of 2011-Y 4 Bank. This court could not issue any compulsive orders directing settlement of the account by effecting any such waiver. Hence, I am of the view that the relief sought for in this writ petition are not sustainable. 5. It is noticed that, when the writ petition came up for consideration on 1.3.2011, this court had issued an interim order restraining dispossession and sale of the property, subject to condition of the petitioner remitting a sum of Rs.2 lakhs within three weeks thereof. It is submitted by learned counsel for the petitioner that the condition stipulated has already been complied with. 6. Confronted with the above situation, learned counsel for the petitioner made an appeal to this court to permit payment of the balance amount outstanding, in a phased manner, subject to reserving his liberty to make further approach before the respondents for waiver of amounts to the possible extent. On the basis of such request the petitioner seeks indulgence of this court to restrain further coercive steps of dispossession and sale of the property. W.P(C) No.5397 of 2011-Y 5 7. Heard; standing counsel appearing for respondents 1 to 3. It is submitted that the loan account in question is in serious default and the petitioner is making attempts one after another by approaching this court, only with an intention to protract payment of the amounts due. It is submitted that the total amount outstanding as on 31.12.2010 is around Rs.7.35 lakhs. Learned counsel for the petitioner submits that the petitioner had effected payment of a total sum of Rs.4 lakhs. 8. Considering the limited relief sought for, I am of the view that, eventhough interference on merits is not warranted, the petitioner can be permitted to wipe off the entire liability by payment of the amounts within a reasonable time. 9. Accordingly, the writ petition is disposed of directing the respondents to keep in abeyance all further coercive steps for dispossession and sale of the property, subject to condition of the petitioner remitting the outstanding amounts along with interest and expenses if any due, in 4 (four) equal monthly instalments, falling due W.P(C) No.5397 of 2011-Y 6 on or before 15.8.2011 and on before the 15th day of succeeding months. 10. It is made clear that the petitioner will be at liberty to approach respondents 1 to 3 seeking waiver of interest/penal interest and expenses to the possible extent and the competent authority in the respondent Bank will be at liberty to consider such request and to take appropriate decision. 11. It is made clear that on the event of default in payment of any one of the instalments as stipulated above, the respondent will be free to proceed with further steps. It is further made clear that the above relief is granted subject to the condition that the petitioner is precluded from raising any subsequent challenge against the proceedings. C.K.ABDUL REHIM JUDGE ab