IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 29TH JUNE 2011 / 8TH ASHADHA 1933 WP(C).No. 15597 of 2011(Y) -------------------------- PETITIONER(S): --------------- K.K.MOHANAN, S/O.LATE K.K.KRISHNAN, KAREPARAMBIL HOUSE, THYKOODAM, VYTTILA, ERNAKULAM PRESENTLY RESIDING AT AYATHUPARAMBIL HOUSE, MARADU NORTH, MARADU P.O., PIN - 682304. BY ADV. SMT.E.V.MOLY RESPONDENT(S): --------------- 1. THE FEDERAL BANK, REGIONAL OFFICE, THRIPPUNITHURA, REPRESENTED BY ITS AUTHORIZED OFFICER - 682301. 2. K.K.ASOKAN, S/O.LATE K.K.KRISHNAN, KAREPARAMBIL HOUSE, THYKOODAM, VYTILA, ERNAKULAM - 682019. ADV. SRI.A.ANTONY FOR R1 SMT.LEELAMMA ANTONY FOR R1 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 15597 of 2011(Y) APPENDIX PETITIONER'S EXHIBITS : EXT.P1 : COPY OF THE RELEVANT PAGES OF LOAN PASS BOOK WITH LOAN REPAYMENT DETAILS EXT.P2: COPY OF THE NOTICE DTD.4.5.2011 EXT.P3: COPY OF THE SALE NOTICE 11.5.2011 RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.A TO JUDGE C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.15597 of 2011-Y ---------------------------------------- Dated this the 29th day of June, 2011. J U D G M E N T 2nd respondent is the brother of the petitioner. Both of them jointly availed a housing loan from the 1st respondent Bank to the tune of Rs.3 lakhs during the year 2000. The loan was secured through an equitable mortgage credited on an immovable property jointly owned by the petitioner and the 2nd respondent. Consequent to default committed in repayment of monthly instalments, the 1st respondent had initiated steps under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the secured asset has already been taken over possession. This writ petition is filed at a stage when the 1st respondent proclaimed sale of the property through Ext.P3 notice. 2. Contention of the petitioner is that, it is the 2nd respondent who had defaulted payment of amounts due to W.P(C) No.15597 of 2011-Y 2 the 1st respondent Bank. It is further contended that, the coercive steps for dispossession and sale has been taken without considering the fact that the repayment period of the loan is for 15 years and the same will expire only in the year 2015. It is contended that steps for sale of the property was taken without acceding to the request made by the petitioner for permitting regularisation of the loan account. 3. When the writ petition came up for admission, this court granted an interim stay against conformation of sale if any take place on the basis of Ext.P3 notice, subject to condition of the petitioner remitting a sum of Rs.1 lakh on or before 25.6.2011. It is reported that the stipulation has already been complied with. 4. Learned counsel appearing for the 1st respondent Bank submitted that, pursuant to Ext.P3 notice, they have received tender for purchase of the secured asset for a sum of Rs.24,07,080/- and on the date stipulated under Ext.P3 the bidder had deposited 25% of the said amount. It is W.P(C) No.15597 of 2011-Y 3 further stated that the loan account is in chronic default and there is outstanding balance of more than Rs.3.21 lakhs. Even the amount remaining overdue for payment itself is more than Rs.2 lakhs, is the submission. 5. Considering the fact that the petitioner had not chosen to challenge the steps initiated under Section 13(4) even after the property was taken over possession, it may not be justifiable on the part of this court to interdict with the proceedings now initiated for sale of the secured asset. However, learned counsel for the petitioner sought indulgence of this court in permitting regularisation on the basis of an offer made to make payment of the amounts in default within a short period. Such a request is made based on a further undertaking that the petitioner is relinquishing all challenges against the proceedings and that he is not intending to pursue any statutory remedy if available in this regard. 6. Considering the limited reliefs sought for, I am of the view that, in view of the relinquishments made by the W.P(C) No.15597 of 2011-Y 4 petitioner and also in view of the fact that the secured asset worth much higher than the amount due under the loan account, I am of the view that indulgence can be shown in permitting the petitioner to regularise the account with a view to save the property from being sold. 7. Therefore the writ petition is disposed of directing the 1st respondent to keep in abeyance all further steps pursuant to the sale conducted on the basis of Ext.P3 notice, subject to condition of the petitioner remitting the entire amount outstanding 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 15.7.2011 and on or before the 15th day of succeeding months. 8. If payment of the amounts as stipulated above is made, the respondents shall treat the sale conducted as cancelled and shall return the amounts deposited by the auction purchaser, along with interest payable thereon at the rate of 10% per annum. The amount of interest payable W.P(C) No.15597 of 2011-Y 5 to the auction bidder shall be debited from the loan account of the petitioner and the petitioner will be liable for payment of the said amount. 9. If payment of the defaulted amount is regularised as directed above and if the sale is cancelled, then the 1st respondent shall permit the petitioner to continue payment of future monthly instalments in accordance with the original schedule of repayment, and the petitioner shall be permitted to re-occupy the secured asset without prejudice to the legal possession being retained by the 1st respondent Bank. 10. It is made clear that, the petitioner will be at liberty to realise the amount if any legally due from the 2nd respondent with respect to the remittances made as directed above and the petitioner will be at liberty to seek appropriate remedy in this regard from the appropriate court. 11. It is made clear that on the event of default in payment of any one of the instalments as stipulated above W.P(C) No.15597 of 2011-Y 6 or any future monthly instalments, the respondents will be free to proceed with further steps, including evicting the petitioner from occupation of the building. It is further made clear that the above relief is granted subject to condition that the petitioner is precluded from raising any subsequent challenge against the recovery proceedings C.K.ABDUL REHIM JUDGE ab