IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 2ND DECEMBER 2010 / 11TH AGRAHAYANA 1932 WP(C).No. 36054 of 2010(F) -------------------------------------- PETITIONERS: --------------------- 1. A.K.AHAMED KUTTY, AGED 54 YEARS, S/O.BEERANKUTTY, ARANCHANAKANDY HOUSE, KARAYAD P.O., MAPPAYUR, KOZHIKODE. 2. KHADEESA UMMA, AGED 77 YEARS, ARANCHANAKANDY HOUSE, KARAYAD P.O., MAPPAYUR, KOZHIKODE. BY ADVS. SRI.K.M.FIROZ, SMT.SHAJNA FIROZ. RESPONDENTS: ------------------------ 1. STATE BANK OF INDIA, REGIONAL BUSINESS OFFICE, IST FLOOR, SOUTHERN TRADE CENTRE, PUSHPA JUNCTION, FRANCIS ROAD, KOZHIKODE-673 002, REPRESENTED BY ITS AUTHORISED OFFICER. 2. THE UNION OF INDIA, REPRESENTED BY THE SECRETARY (BANKING & INSURANCE) DEPARTMENT OF ECONOMIC AFFAIRS, MINISTRY OF FINANCE, PARLIAMENT STREET, NEW DELHI-110 001. R1 BY SRI.K.K.CHANDRAN PILLAI, SENIOR ADVOCATE, ADV. SRI.A.S.SAJUSH PAUL, R2 BY SRI.T.P.M.IBRAHIM KHAN, ASST.S.G OF INDIA. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02/12/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM,J. ------------------------------- WP(C).NO.36054 of 2010 --------------------------------- Dated this the 2nd day of December, 2010 JUDGMENT The 2nd petitioner is the mother of the 1st petitioner. With respect to a loan availed by the 1st petitioner from the 1st respondent Bank, property belonging to the 2nd petitioner was mortgaged. Consequent to default committed in repayment of the loan amount, proceedings was initiated against the property belonging to the 2nd petitioner, by invoking provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act). After issuing demand notice under section13(2), the property in question was taken over possession by issuing Ext.P1 notice under Rule 8(1) of the Security Interest (Enforcement) Rules. 2. According to the petitioners, the loan in question was availed during the year 2005 and repayment period is for 84 months. Hence the coercive steps initiated without permitting the petitioners to regularise the account is highly unjustified and illegal, is the contention. It is further pointed out that the marriage of the 1st petitioner's daughter is fixed in February, WP(C) 36054/2010 2 2011 and the petitioners will be put to severe prejudice if the Bank publishes the possession notice or if any attempt is made to take over physical possession of the property. Under such circumstances interference of this court is solicited in order to restrain the respondents from pursuing with further coercive steps under the SARFAESI Act. 3. According to learned senior counsel appearing for the 1st respondent, the loan account is in chronic default and stands classified as 'NPA' since July 2006 onwards. It is further stated that the period of repayment will be over by August 2011 and huge amount is in default as on today. It is also mentioned that the entire outstanding in the loan account will be around Rs.13,38.008/- along with interest due thereon from 16.9.2010 onwards. 4. Petitioners are raising legal contention that, the property in question is an agricultural land and the respondents are not entitled to proceed under the provisions of the SARFAESI Act against the said property, in view of section 31(i). It is noticed that the petitioners have not resorted to any of the statutory remedies provided, at any point of time when the proceedings was pursued. It is noticed that no such WP(C) 36054/2010 3 objection was raised at the time when notice was issued under section 13(2). In view of the fact that the petitioners have not chosen to avail remedies provided under the statute, it is not proper or justified on the part of this court in interfering with the proceedings, especially taking note of the directions contained in the decision of the Hon'ble Supreme Court in United Bank of India vs. Satyawati Tondon and others (2010 (8) SCC 110). 5. However learned counsel appearing for the petitioners submitted that the petitioners are not intending to pursue any of the statutory remedies and that they are relinquishing all challenges against the proceedings initiated under the SARFAESI Act. The limited prayer is only to permit the petitioners to pay off the liability within a reasonable time, in a phased manner. The petitioners seek specific direction to restrain the respondents from publishing Ext.P1 notice. 6. Eventhough interference on merits is not desirable, I am inclined to allow the petitioners to pay off the arrears within a reasonable time in instalments. Accordingly the writ petition is disposed of directing the respondents to keep in abeyance all further steps pursuant to Ext.P1 notice, provided WP(C) 36054/2010 4 the petitioner remits a sum of Rs.2 lakhs on or before 31.12.2010 and further make payment of the entire balance amount due including interest and expenses if any due, in 12 equal monthly instalments falling due on or before 31.1.2011 and on or before the last day of the succeeding months. 7. It is made clear that on the event of default committed in payment of any one of the instalments as stipulated above, the respondents will be free to proceed with further steps pursuant to notices already issued and on such event the petitioners will be precluded from raising any subsequent challenge against such proceedings . C.K.ABDUL REHIM,JUDGE pmn/ WP(C) 36054/2010 5