IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 18TH AUGUST 2010 / 27TH SRAVANA 1932 WP(C).No. 17129 of 2010(M) ----------------------------------------- PETITIONER(S): ------------------------ K.K.SHARAFUNNISA, W/O.LATE AHAMMED, AGED 50 YEARS, `THAJINAS', NEAR HOUSING CO-OP.SOCIETY, CHOOYYADAN ROAD, P.O.PONNIAM WEST, THALASSERY. BY ADVS. SRI.C.P.PEETHAMBARAN, SRI.B.R.VIJAY BABU. RESPONDENT(S): --------------------------- 1. STATE BANK OF INDIA, RETAIL ASSETS SMALL & MEDIUM ENTERPRISES, CITY CREDIT CENTRE, S.N.PARK ROAD, KANNUR-1, REPRESENTED BY ITS MANAGER. 2. THE AUTHORISED OFFICER, STATE BANK OF INDIA, RETAIL ASSETS SMALL & MEDIUM ENTERPRISES, CITY CREDIT CENTRE, S.N.PARK ROAD, KANNUR-1. *ADDL.R3 IMPLEADED: R3. M/S. BALAMURALI ASSOCIATES, EMPIRE BUILDING, S-8, 2ND FLOOR, COCHIN - 682 018. (*ADDL.R3 IS IMPLEADED AS PER ORDER DTD. 9/06/2010 IN I.A.NO.7274/10 IN WPC.NO.17129/10) R1 & R2 BY ADV. SRI.P.V.SURENDRANATH, SC SBI ADDL. R3 BY ADV. SRI.JAWAHAR JOSE THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18/08/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.17129/2010 M APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE RECEIPTS SHOWING REMITTANCE. P2: COPY OF THE LETTER DTD. 24/05/2010 SENT BY THE PETITIONER. P3: COPY OF THE LETTER DTD. 29/05/2010 ISSUED BY THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS & ANNEXURES: R2(A): COPY OF THE NOTICE U/S.13(2) DTD. 30/11/2009. R2(B): COPY OF THE NOTICE U/S.13(4) OF THE SARFAESI ACT. R2(C): COPY OF STATEMENT OF ACCOUNT RELATING TO THE LOAN ACCOUNT. R3(A): COPY OF THE GUIDELINE ISSUED BY THE RESERVE BANK AFTER THEIR MID-TERM REVIEW FOR THE YEAR 2007 -2008. R2(B): COPY OF THE CERTIFICATE ISSUED BY INDIAN INSTITUTE OF BANKING AND FINANCE. R2(C): COPY OF PETITIONERS APPOINTMENT LETTER. /TRUE COPY/ P.A.TO JUDGE Kss P.R.RAMACHANDRA MENON, J -------------------------------------------- WP(C) NO. 17129 OF 2010 -------------------------------------------- Dated this the 18th day of August, 2010 JUDGMENT The son of the petitioner had availed a 'housing loan' of Rs.13.66 lakhs in July, 2007, agreeing to have it repaid within a span of 10 years by way of regular monthly instalments, creating security interest over the property in question. But when the petitioner turned to be a defaulter, the Bank declared the account as ‘NPA’ and proceeded with steps under the SARFAESI Act, which made the petitioner to approach this Court by filing the present Writ Petition. 2. Taking note of the fact that the Writ Petition has been filed by the mother of the borrower, who is abroad, the petitioner was directed to furnish necessary authorization; pursuant to which it is stated that the petitioner has been duly authorized by the son, as per a power of attorney, to proceed the present matter pending consideration before this Court and to clear the liability on his behalf, executing necessary undertaking/ documents in connection with the cause of action. Taking note of the allegations raised by the petitioner, that some strangers engaged by the Bank had come to the residence of the petitioner and threatened her, the so called recovery agent was impleaded as the additional respondent No. 3 who has filed detailed counter affidavit stating that they have been 2 WP(C) No. 17129/2010 appointed by the Bank only on 29.05.2010 as per Ext.R3(c) and hence that the allegations raised as to the trespass and threat in March 2010 are quite wrong and unfounded; simultaneously pointing out that the 3rd respondent is not a necessary party to the above proceedings. 3. The learned counsel for the respondent Bank with reference to the contents of the counter affidavit filed on behalf of the respondents 1 and 2 submits that the borrower turned to be a chronic defaulter, under which circumstance, there was no other alternative remedy for the Bank, but to proceed with steps for recovery of the amount and the steps taken by the Bank in this regard are strictly in conformity with the statutory requirements and hence, not assailable under any circumstance. The learned counsel for the Bank submits that the outstanding liability is more than 13 lakhs as on 28.05.2010 and that the 'overdue' amount in respect of the defaulted insalments itself is quite substantial. Unless and until the said 'overdue' amount is satisfied, the question of regularization of loan account is not liable to be entertained; submits the learned counsel. 4. Taking note of the particular facts and circumstances, including that the petitioner is enshouldering the liability on behalf of her son, who is the borrower, and further that the loan facility provided is in the 'housing sector', this Court finds that one more opportunity can be given to clear the 'overdue' amount and to have the loan account regularized. 3 WP(C) No. 17129/2010 Accordingly, the petitioner is permitted to clear the entire 'overdue' amount by way of ‘two’ equal monthly instalments the first of which shall be effected on or before the 10th of September, 2010, to be followed by next instalments to be satisfied on or before the 10th of October, 2010 subject to which, the loan account stand regularized. This will be in addition to the liability of the petitioner to clear the regular EMIs without fail. It is made clear that, if any default is committed by the petitioner with regard to the satisfaction of the 'overdue' amount or if any two consecutive defaults are made with regard to the regular EMIs, the respondents will be at liberty to proceed with further steps for realization of the entire amount in a lump sum. In view of the finality with regard to the cause of action, the earlier interim order dated 03.08.2010 need not be given effect to. The Writ Petition is disposed of accordingly. P.R.RAMACHANDRA MENON JUDGE dnc