IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 20TH SEPTEMBER 2010 / 29TH BHADRA 1932 WP(C).No. 20965 of 2010(U) -------------------------- PETITIONER: ------------------- SHIBILI, S/O.MUHAMMED RASHEED, SUBAIDA PALACE, THONNACKAL P.O., THIRUVANANTHAPURAM DISTRICT. BY ADVS. SRI.P.V.BABY SRI.A.N.SANTHOSH RESPONDENTS: --------------- 1. AIG HOME FINANCE INDIA LTD, 2ND FLOOR, CITI TOWER, 117, SIR THYAGARAYA ROAD, T.NAGAR, CHENNAI - 600017, REPRESENTED BY ITS BRANCH MANAGER, TRIVANDRUM BRANCH, AIG HOME FINANCE INDIA LIMITED, 2ND FLOOR, KRISHNA BUILDING, BAKERY JUNCTION, TRIVANDRUM - 01. 2. AIG HOME FINANCE INDIA LTD, TRIVANDRUM BRANCH, 2ND FLOOR, KRISHNA BUILDING, BAKERY JUNCTION, TRIVANDRUM – 01, REPRESENTED BY ITS BRANCH MANAGER R1 & 2 ADV. SRI.RAJESH THOMAS THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.20965 of 2010 ------------------------------------------- Dated this the 20th day of September, 2010 J U D G M E N T ---------------------- Consequent to default committed in repayment of a housing loan availed by the petitioner from the respondents, proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was initiated on issuing notice contemplated under Section 13(2). This writ petition is filed based on the allegation that inspite of offer made by the petitioner to regularise the account by paying the defaulted monthly installments, the respondent Bank is not acceding to such request, and is proceeding with further coercive steps. 2. In the counter affidavit filed by the respondents, it is stated that the petitioner had paid only 83 installments as on 4.8.2010 and a sum of Rs.6,48,235.79 is still due. It is further stated that as per notice under Section 13(2), an amount of Rs.6,11,284/- was demanded and a notice intimating steps under Section 13(4) has already been issued. Averments in the counter affidavit was refuted by W.P.(C).20965/10-U -2- filing a reply affidavit contending that calculating from 1.4.2003 only 83 installments are due uptil 28.2.2010 and after deducting the paid up installments, only six installments at the rate of Rs.8,680/- alone are due for payment. On the basis of directions issued by this court, the respondents again filed additional counter affidavit in which it is mentioned that the total amount liable to be paid as overdue is Rs.1,16,995.53 including various expenses and charges like bounce charges, penal charges, recovery charges, legal charges, etc:. The petitioner is seriously disputing correctness of such demand and liability for payment of the expenses as claimed in the additional counter affidavit. 3. Since the statute provides an effective alternate remedy to the petitioner to challenge correctness of the amounts demanded under the SARFAESI Act, I am not inclined to entertain this writ petition and to venture upon an adjudication regarding correctness of the demand. The petitioner has got an effective remedy as provided under Section 17(1) for redressal of the disputes. Hence no interference is warranted in this writ petition. 4. However, learned counsel for the petitioner appealed for indulgence of this court in permitting regularisation of the loan account by paying the entire defaulted amounts as demanded by the respondents, within a reasonable time, in W.P.(C).20965/10-U -3- installments. The counsel for respondents is not favouring such proposal on the ground that the loan account is in chronic default. 5. Having considered the rival submissions and the facts and circumstances attendant in this case, I am of the opinion that, eventhough interference on merits is not possible, the petitioner can be permitted to regularise the accounts by paying the defaulted amount as demanded, within a short period. This is especially in view of the fact that the mandate of regulations issued by the Reserve Bank, which is having binding nature, the Bank is at an obligation to re-classify the debt as a performing asset, once the default is cleared. 6. In the result, the writ petition is disposed of directing the respondents to keep in abeyance further coercive steps pursuant to the notices already issued, provided the petitioner remits the entire amount outstanding (defaulted installments along with expenses and other charges) in 3 (three) equal monthly installments, falling due on or before 31.10.2010 and on or before the last day of two succeeding months. The petitioner shall also make payment of the normal installments falling due during these 3 months, along with such payments. 7. If the arrears are cleared payment as directed above, the respondents shall permit the petitioner to continue payment W.P.(C).20965/10-U -4- of future monthly installments, in terms of the original loan agreement. 8. It is made clear that on the event of default in payment of any of the installments, the respondents will be free 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