IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 24TH MARCH 2011 / 3RD CHAITHRA 1933 WP(C).No. 7700 of 2011(J) --------------------------------------- PETITIONER(S): ---------------------- DINSIL LONAPPAN, S/O.LONAPPAN, ELAYACHATTIL HOUSE, NELLIKUNNU P.O. BY ADV. SRI.K.V.SADANANDA PRABHU RESPONDENT(S): -------------------------- 1. CANARA BANK, KURIACHIRA SME, KURIACHIRA P.O., THRISSUR-680006. 2. THE DEPUTY TAHSILDAR RR, THRISSUR-680020. R1 BY ADV. SRI.PAULY MATHEW MURICKEN, SC. R2 BY SR.GOVT. PLEADER SRI.MATHEW GEORGE VADAKKEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss W.P.(C) NO.7700/2011 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE DEMAND NOTICE RR 2.3029/2010 DTD. 28.7.2010 BY THE 2ND RESPONDENT. P2:- COPY OF THE ORDER OF THE GOVERNMENT OF KERALA RR/4593/M/REV/2010 DTD. 10.8.2010. P3:- COPY OF THE COMMUNICATION FROM THE IST RESPONDENT IN CR/STAR GOLD/2010 DTD. 31.12.2010 ISSUED TO THE VILLAGE OFFICER OLLOOKKARA. P4:- COPY OF THE REMITTANCE SLIP ISSUED BY THE IST RESPONDENT BANK TO THE PETITIONER DTD. 20.1.2011 AND 23.2.2011 RESPECTIVELY. P5:- COPY OF THE RECEIPT F. NO.5336828 DTD. 24.2.2011 ISSUED IN FAVOUR OF THE PETITIONER. P6:- COPY OF THE POSSESSION NOTICE ISSUED BY THE IST RESPONDENT DTD. 26.2.2011. RESPONDENT'S EXHIBITS NIL:- TRUE COPY P.A. TO JUDGE tss C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.7700 of 2011-J ---------------------------------------- Dated this the 24th day of March, 2011. J U D G M E N T Petitioner availed a loan from the 1st respondent Bank, repayment of which was defaulted. At the behest of the 1st respondent revenue recovery action was initiated to realise the arrears. Ext.P1 is the notice issued under Section 7 of the Kerala Revenue Recovery Act demanding payment of a sum of Rs.9,56,500/- along with interest due thereon from 23.4.2010 onwards. On receipt of the demand notice the petitioner had approached the State Government and obtained Ext.P2 order from the Hon’ble Minister for Revenue to the extent of permitting payment in a phased manner. Through Ext.P2, the petitioner was directed to make payment of 10% of the amounts on or before 25.9.2010 and the balance amount was directed to be paid in 50 equal monthly instalments. 2. According to the petitioner he had remitted 10% of the amount as stipulated under Ext.P2 and was continuing payment of the monthly instalmets. It is contended that the payments made under Ext.P2 order was within the knowledge of W.P(C) No.7700 of 2011-J 2 the 1st respondent Bank and as per their request under Ext.P3, the revenue authorities have collected revenue recovery commission, as evidenced from Ext.P5. 3. But without considering all the above aspects, the 1st respondent had initiated coercive steps of recovery by resorting to provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The immovable property, which is the secured asset, was taken over possession symbolically by invoking Section 13(4) on issuing Ext.P6 notice. Since the action was initiated in violation of Ext.P2 order issued by the State Government, the petitioner is challenging the proceedings. 4. Heard; standing counsel appearing for the 1st respondent. It is contended that Ext.P2 order was issued in a proceedings without any notice or intimation to the 1st respondent Bank. It is further contended that the pendency of the proceedings under the Revenue Recovery Act is not a bar for initiating steps under the SARFAESI Act. The 1st respondent relies on various decisions of the Hon’ble Supreme Court in support of the above proposition. W.P(C) No.7700 of 2011-J 3 5. I take note of the fact that the debt due to the 1st respondent was allowed to be paid in a phased manner through Ext.P2 order issued by a competent authority. It was not at all justified on the part of the 1st respondent to initiate steps in contravention of Ext.P2 order invoking the provisions of the SARFAESI Act, unless there is an allegation of default in compliance of the terms of that order. So even accepting the argument that proceedings under the SARFAESI Act can be initiated during pendency of the revenue recovery proceedings, such an action was not justified on the phase of Ext.P2 order. 6. Learned counsel for the 1st respondent Bank submitted that the coercive steps under the SARFAESI Act was initiated because of the fact that the petitioner is in default of payment of the monthly instalments in accordance with the schedule of repayment under the terms of the loan agreement. It is stated that the amount outstanding overdue for payment is around Rs.1.65 lakhs. However learned counsel for the respondent submitted that, if the petitioner is clearing payment of the defaulted amount within a short time, he can be permitted to continue payment of the future monthly instalments in W.P(C) No.7700 of 2011-J 4 accordance with the original schedule of repayment. 7. Under the above mentioned circumstances, I am of the view that the writ petition can be disposed of with a direction to the respondents to restrain further coercive steps under the SARFAESI Act, provided the petitioner regularize the account by paying the amount remaining overdue as per the original schedule of repayment. 8. Hence the writ petition is disposed of directing the 1st respondent to keep in abeyance all further coercive steps, initiated pursuant to Ext.P6 notice, provided the petitioner remits the amount remaining overdue (defaulted monthly instalments along with interest and expenses if any due) on or before 15.4.2011 along with payment of regular monthly instalments due for the month of April 2011. 9. If payments of the amounts in default is regularised as directed above, the petitioner shall be permitted to continue payment of the future monthly instalments in terms of the original schedule of repayment. 10. Needless to say that once the loan account is regularised as directed above, the 1st respondent shall take steps W.P(C) No.7700 of 2011-J 5 to withdraw the revenue recovery proceedings. 11. It is made clear that on the event of default in payment of the amounts as stipulated above or any one of the future monthly instalments, the respondents will be free to proceed with further steps on the basis of Ext.P6 or to pursue steps initiated under the Kerala Revenue Recovery Act. 12. 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 such proceedings, either before this Court or before any other forum. C.K.ABDUL REHIM JUDGE ab