IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 2ND JULY 2010 / 11TH ASHADHA 1932 WP(C).No. 14264 of 2010(G) ----------------------------------------- PETITIONER(S): ------------------------ K.P. MOHAMMED ASHRAF, S/O. K.P.MOHAMMED KUNJI, PROPRIETOR, M/S. ASPARA PALACE, OPPOSITE INDIAN OIL CORPORATION, THAVAKKARA ROAD, KANNUR. BY ADV. SMT.DAISY A.PHILIPOSE RESPONDENT(S): ------------------------- 1. STATE BANK OF INDIA, KANNUR BRANCH, REPRESENTED BY ITS BRANCH MANAGER. 2. THE AUTHORIZED OFFICER, STATE BANK OF INDIA, RASMECCC, S.N.PARK ROAD, KANNUR-670 001. R1 & R2 BY ADV. SRI.P.V.SURENDRANATH. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02/07/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 14264/2010-G APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE LETTER OF ARRANGEMENT DATED 18/12/2007 ISSUED BY THE 1ST RESPONDENT. EXT.P2: COPY OF THE STATEMENT OF ACCOUNT ISSUED BY THE 1ST RESPONDENT. EXT.P3: COPY OF THE LETTER DATED 09/03/2010 ISSUED BY THE 1ST RESPONDENT IN RESPECT OF ACCOUNT NO.30297663192. EXT.P4: COPY OF THE LETTER DATED 09/03/2010 ISSUED BY THE 1ST RESPONDENT IN RESPECT OF ACCOUNT NO.30639416658. EXT.P5: COPY OF THE REPRESENTATION DATED 28/03/2010. EXT.P6: COPY OF THE NOTICE DATED 19/04/2010. RESPONDENT'S EXHIBITS: EXT.R2(a): COPY OF THE STATEMENT OF ACCOUNT IN ACCOUNT NO.30297663192. EXT.R2(b): COPY OF THE STATEMENT OF ACCOUNT IN ACCOUNT NO.30639416658. //TRUE COPY// P.A. TO JUDGE rs. P.R.RAMACHANDRA MENON, J --------------------------- W.P(C) No.14264 of 2010-G ---------------------------- Dated this the 2nd day of July, 2010. J U D G M E N T The petitioner availed a term loan of Rs.2 crores from the first respondent Bank in December 2007; in addition to which, the first respondent sanctioned a term loan of Rs.50 lakhs in January 2009. Security interest was created over the property, having an extent of 19.64 cents of land in Kannur Village and yet another property having an extent of 13.25 cents in Azhikode North Village in Kannur Taluk. In spite of the arrangements made to have the liability satisfied by way of monthly instalments, some defaults occurred. In the said circumstances, there was no other alternative for the Bank, but to declare the account as 'NPA' and proceed with further steps invoking the provisions under the SARFAESI Act; which in turn is subjected to challenge in this Writ Petition. 2. when the matter came up for consideration before this Court for consideration on 2.6.2010, coercive proceedings were intercepted for a period of one month. The respondents 1 and 2 have filed a counter affidavit, pointing out the actual facts and W.P(C) No.14264 of 2010-G 2 figures and also producing a statement of accounts, as borne by Ext.R2(a) and R2(b). 3. The learned counsel for the petitioner, though initially doubted some calculation mistake, after ascertaining the position with reference to the relevant entries, fairly concedes that there is no mistake, however adding that the default was never wilful but because of some unforeseen circumstances, including sudden down fall in the business. It is stated that the petitioner has made appropriate arrangements for raising funds from other sources as well and earnest efforts are being taken to clear the liability of the Bank at the earliest possible. The learned counsel further submits that the petitioner does not intend to challenge the correctness or sustainability of the steps taken by the Bank by pressing any of the grounds raised in the Writ Petition; nor the petitioner does intend to have the statutory remedy provided under Section 17 of the Act, by approaching the Debt Recovery Tribunal. The only relief pressed before this Court is to permit the petitioner to clear the liability in a phased manner. 4. After hearing both the sides, this Court finds it fit and proper to permit the petitioner to have one more opportunity to W.P(C) No.14264 of 2010-G 3 clear the 'overdue' amount, which is stated as nearly Rs.97 lakhs (with subsequent interest and cost) and to have the loan account regularised. Accordingly, the petitioner is directed to clear the entire 'overdue' amount by way of 'ten' equal monthly instalments, at the rate of Rs.10 lakhs every month; the first of which shall be effected on or before the 30th of July, 2010; to be followed by similar instalments to be effected on or before the 30th of the succeeding months (appropriate balance amount to be effected in the last instalment). This, however will be in addition to the liability of the petitioner to clear the regular EMIs as well. It is made clear that, if any default is committed by the petitioner in satisfying the 'overdue' amount as above, or if any two consecutive defaults are committed with regard to the regular EMIs, the respondent Bank will be at liberty to proceed with appropriate steps for realisation of the entire amount in a lump sum, from the stage where it stands now. The Writ Petition is disposed of. P.R.RAMACHANDRA MENON JUDGE ab