IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 7TH MARCH 2011 / 16TH PHALGUNA 1932 WP(C).No. 1668 of 2011(G) ----------------------- PETITIONER : -------------------- MR.LIONSUN NARAYANAN (PROPRIETOR M/S.LIONSUN INTERNATIONAL) NARUCHIRAKKAN HOUSE, PERINGAVU P.O., TRICHUR-18. BY ADVS. SRI.P.PAULOCHAN ANTONY RESPONDENT(S) : ------------------------- 1. BANK OF MAHARASHTRA, C.O. `LOKMANGAL', 1501, SHIVAJI NAGAR, PUNE-411 005. 2. THE AUTHORIZED OFFICER, BANK OF MAHARASTHRA, NO.4, SIVAGNANAM RD., T.NAGAR, CHENNAI-600 017. BY ADV. SRI.BIJU BALAKRISHNAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 1668 of 2011(G) APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : COPY OF 13(2) NOTICE DATED 18.11.2010. RESPONDENT'S EXHIBITS - NIL //TRUE COPY// P.S. TO JUDGE Mn C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.1668 of 2011 ------------------------------------------- Dated this the 7th day of March, 2011 J U D G M E N T ---------------------- Consequent to default committed by the petitioner in repaying a term loan availed for conduct of business, the respondent Bank had initiated steps against the immovable property belonging to the guarantor, invoking provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Ext.P1 is the notice issued under Section 13(2) of the Act. It is stated that a subsequent notice as contemplated under Rule 8(1) of the Security Interest (Enforcement) Rules was also issued intimating steps taken under Section 13(4). according to the petitioner, he became laid up due to severe nervous and spinal diseases and hence the default occurred. However, contention of the petitioner is that coercive steps are now being pursued without acceding to his request to permit regularisation of the account. 2. In a statement filed on behalf of the respondents it is mentioned that the loan in question was availed in the year 2009 and the petitioner had committed consecutive defaults in payment of the instalments. It is mentioned that the loan account in question was classified as 'NPA' on 30.4.2010 and the steps under the SARFAESI Act was initiated. The total amount outstanding W.P.(C).1668/11 -2- payment as on 4.3.2011 is Rs.10,66,433/-, along with interest and expenses. Learned counsel appearing on behalf of the respondent Bank submitted that the amount overdue for payment (defaulted instalments) itself will come to Rs.1,88,000/-. It is further alleged that the business conducted by the petitioner is remaining defunct. However, learned counsel for the petitioner refutes such an allegation. 3. Considering the effective alternative remedy available under Section 17(1) of the Act this court is not justified in interdicting with the proceedings. However, learned counsel for the petitioner undertook that the petitioner is not intending to pursue any statutory remedy and that he is relinquishing all challenges raised against the proceedings. On the other hand, a limited prayer is made to permit regularisation of the account on the basis of an offer that the defaulted amount will be paid within a short period. 4. Eventhough interference on merits is not justified, I am of the view that indulgence can be shown in permitting regularisation of the account, in view of the 'Master Circulars' issued by the Reserve Bank of India, which is having statutory force, through which reclassification of the debts as a 'performing assets' is mandated, on clearance of payment of the amounts in default. W.P.(C).1668/11 -3- 5. The writ petition is accordingly 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 amounts overdue for payment (defaulted monthly instalments along with interest and expenses if any due) in 3 (three) equal monthly instalments, falling due on or before 31.3.2011 and on or before the last day of the two succeeding months, along with payment of regular instalments due for the respective months. 6. If payment of the amounts in default is regularised as directed above, the respondents shall permit the petitioner to continue payment of the future monthly instalments in accordance with the original schedule of repayment. 7. It is made clear that on the event of default in payment of any one of the instalments as stipulated or any future monthly instalments the respondents will be at liberty to proceed with further steps and on such event the petitioner will be precluded from raising any subsequent challenge against such proceedings. C.K.ABDUL REHIM, JUDGE. okb