IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 16TH NOVEMBER 2010 / 25TH KARTHIKA 1932 WP(C).No. 34219 of 2010(B) -------------------------- PETITIONERS: -------------------- 1. CRYSTAL NATURAL FURNITURE CO. PVT.LTD., NADAKKAVU ROAD, MULANTHURUTHY, ERNAKULAM, REPRESENTED BY ITS MANAGING DIRECTOR. 2. BIJU VARGHESE, MANAGING DIRECTOR, CRYSTAL NATURAL FURNITURE CO. PVT. LTD., NADAKKAVU ROAD, MULANTHURUTHY, ERNAKULAM. 3. DARLEY BIJU, W/O.BIJU VARGHESE, DIRECTOR, CRYSTAL NATURAL FURNITURE CO.PVT.LTD., NADAKKAVU ROAD, MULANTHURUTHY, ERNAKULAM. BY ADVS. DR.K.P.SATHEESAN SRI.K.K.GOPINATHAN NAIR SRI.M.R.JAYAPRASAD SRI.B.MOHANDAS SRI.MATHEW SUNNY SRI.ANOOP.V.NAIR RESPONDENTS: ----------------------- 1. FEDERAL BANK LTD., REPRESENTED BY THE MANAGING DIRECTOR, REGISTERED OFFICE, BANK JUNCTION, ALUVA-1. 2. THE CHIEF MANAGER, FEDERAL BANK LTD., REGIONAL OFFICE, ASSET RECOVERY CELL, FEDERAL TOWERS, IST FLOOR, MARINE DRIVE, ERNAKULAM, COCHIN-682 031. 3. THE GENERAL MANAGER, FEDERAL BANK LTD., REGIONAL OFFICE, ASSET RECOVERY CELL, FEDERAL TOWERS, IST FLOOR, MARINE DRIVE, ERNAKULAM, COCHIN-682 031. 4. THE SENIOR MANAGER, FEDERAL BANK LTD., MULANTHURUTHY BRANCH, MULANTHURUTHY, ERNAKULAM-682 314. BY ADV. SRI.GEORGE VARGHESE (MANACHIRACKEL) SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.34219 of 2010-B ---------------------------------------- Dated this the 16th day of November, 2010. J U D G M E N T Challenge in this writ petition is against proceedings initiated under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The first petitioner is a company incorporated and the second petitioner is its Managing Director. The third petitioner is one of the Directors of the company. The company is running a furniture manufacturing industry in the Cochin Special Economic Zone, Kakkanad. Different loans were availed by the petitioners from the respondent Bank for their business activities. Consequent to default committed in repayment of the loan amounts, the respondents initiated proceedings under the SARFAESI Act against immovable properties, which are the secured assets. Ext.P9 is the notice of demand issued under Section 13(2) of the Act. According to the petitioner prior to initiation of proceedings under the W.P(C) No.34219 of 2010-B 2 SARFAESI Act, the petitioners had approached the respondents through various representations seeking time for settlement of the account as well as seeking benefits under the One Time Settlement Scheme. It is contended that, steps now initiated under the SARFAESI Act is without considering such requests and without considering offers made by the petitioners for payment of the amounts due within a short time, provided the petitioners are granted waiver under the One Time Settlement Scheme. On receipt of Ext.P9 notice, the petitioners had submitted Ext.P11 representation, stating that the petitioners are trying to make payment of a major portion of the amounts outstanding within ten days. In the said representation the petitioners made a further offer for payment of a total amount of `301 lakhs towards final settlement of the loan account. It is contended that the respondent Bank is pursuing further steps without considering such representations. 2. Learned counsel appearing for the respondent Bank, on the basis of instructions, submitted that even prior W.P(C) No.34219 of 2010-B 3 to issuance of notice under Section 13(2), various requests made by the petitioners were considered and an offer was issued to the petitioners through Ext.P6 letter, agreeing for accepting payment of a sum of `301 lakhs towards full and final settlement, if the amount is paid on or before 30.6.2010. But inspite of such an offer, the petitioners have not cared to make payment of any amount. It is further mentioned that considering Ext.P11 representation submitted, the Bank had given a reply to the petitioners which was despatched to the petitioners on 10.11.2010. But inspite of making various offers, the petitioners are not taking any earnest efforts to pay off the liability, is the contention. 3. It is evident that the proceedings initiated under the SARFAESI Act is only at the stage of issuing notice under Section 13(2). It is evident that the petitioners have submitted a reply to the notice. It is also evident that after considering such reply the Bank had given a letter to the petitioner. Under such circumstances, I am not inclined to entertain this writ petition, in view of the fact that the W.P(C) No.34219 of 2010-B 4 statute provide effective remedy to the petitioners against further coercive steps, if any pursued by the respondents. 4. However, learned counsel for the petitioners submits that the petitioners could find out a probable buyer with respect to the properties under mortgage, and that they could be able to pay off the entire liability within a short time, if the Bank considers waiver of interest/penal interest and other expenses to the possible extent, under the One Time Settlement Scheme. 5. Under the above mentioned circumstances the writ petition is disposed making it clear that the petitioners will be at liberty to approach the concerned authority among the respondents to seek remedies on the basis of the submission as mentioned above. Needless to say that, if the petitioners make any approach, the respondent Bank shall consider the same and inform the decision taken thereof to the petitioners. Sd/- C.K.ABDUL REHIM JUDGE ab //True Copy//