IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 1ST OCTOBER 2010 / 9TH ASWINA 1932 WP(C).No. 24413 of 2010(B) -------------------------- PETITIONER(S): --------------- CYRIAC V.KURIAN, S/O.KURIAKOSE KURIAN, VATHUKATTU (CHOTHIRAKUNNEL) HOUSE, PAMPADY P.O., KOTTAYAM. BY ADV. SRI.PHILIP T.VARGHESE SRI.THOMAS T.VARGHESE SMT.ACHU SUBHA ABRAHAM SMT.AFSANA ASHRAF SRI.S.SARATH RESPONDENT(S): --------------- 1. THE FEDERAL BANK LTD., PAMPADY P.O., KOTTAYAM REPRESENTED BY ITS BRANCH MANAGER. 2. THE ASSISTANT GENERAL MANAGER, (AUTHORISED OFFICER UNDER SARFAESI ACT), THE FEDERAL BANK LTD., REGIONAL OFFICE, THEKKUMKAL BUILDING, T.B.ROAD, KOTTAYAM-686001. ADV. SRI.MOHAN JACOB GEORGE FOR R2 SMT.P.V.PARVATHI FOR R2 SMT.REENA THOMAS FOR R2 SRI.L.RAM MOHAN FOR R2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K. ABDUL REHIM, J ------------------------------- WP(C) NO. 24413 OF 2010 ------------------------------------- Dated this the 1st day of October, 2010 JUDGMENT Challenge in this Writ Petition is against Exts.P2 and P5 notices, issued on the basis of the proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Consequent to default committed in repayment of a housing loan availed by the petitioner from the first respondent Bank, Ext.P2 demand notice was issued under Section 13 (2) of the Act requesting the petitioner to remit the amounts due within a period of 60 days. According to the petitioner, on receipt of Ext.P2, he had effected substantial payments, which will clear off the defaulted arrears. However, a lawyer notice as per Ext.P4 was caused in reply to Ext.P2, calling upon respondents to withdraw the proceedings. Ext.P5 is the reply given to the lawyer notice, in which it is stated that there is no infirmity with respect to the proceedings 2 WP(C) No. 24413/2010 initiated under the SARFAESI Act, and that in case of default in discharging the liability further steps will be proceeded against. 2. Contention of the petitioner is that, the defaulted amounts with respect to monthly instalments due till date, stands cleared payment and therefore the respondents are obliged to treat the loan account as a 'performing asset', going by the terms of the master circular issued by Reserve Bank of India. Under such circumstances, Ext.P5 reply is issued without any basis and further steps if any contemplated need be restrained, is the contention. 3. Learned counsel appearing for the respondent Bank submitted that evaluation with respect to the question regarding the continuance of 'NPA' accounts will be done at the end of every quarter. Therefore if the petitioner had cleared payment the entire amounts in default, the respondents will classify the account in question as a 'performing asset' and in such case the petitioner will be 3 WP(C) No. 24413/2010 permitted to continue payment of future instalments, in accordance with the original schedule. 4. Eventhough petitioner has got an effective remedy by way of appeal against further proceedings under the SARFAESI Act, in the given circumstances of this case, I am of the view that the matter can be disposed of on issuing necessary directions to the respondents. The respondents are hereby directed to inform the petitioner the status of the loan account as on 30th December, 2010. If there is any further amount in default the petitioner shall be given opportunity to clear off such arrears. Intimation in this regard shall be issued within ten days of receipt of this judgment. If any further amounts are due, the petitioner shall remit the same within two weeks of receipt of such intimation. In order to facilitate the petitioner to regularize the accounts as directed above, further coercive steps of recovery shall be kept in abeyance for a period of one month. 4 WP(C) No. 24413/2010 5. It is made clear that if the petitioner fails to regularize the account as directed above and fails to continue payment of future instalments in terms of the loan agreement, the respondents will be free to proceed with further steps pursuant to Exts.P2 and P5 notices. C.K. ABDUL REHIM JUDGE dnc