IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 21ST FEBRUARY 2011 / 2ND PHALGUNA 1932 WP(C).No. 3544 of 2011(P) ------------------------- PETITIONER(S): --------------- T.K.VENKITESH, PUTHENPURAYIL, KILIROOR, KANJIRAM P.O., KOTTAYAM. BY ADV. SRI.PRATHEESH.P RESPONDENT(S): --------------- 1. AUTHORISED OFFICER, STATE BANK OF TRAVANCORE, STRESSED ASSETS RESOLUTION CENTRE, ZONAL OFFICE, KOTTAYAM-686 002. 2. THE BRANCH MANAGER, STATE BANK OF TRAVANCORE, KANJIRAM BRANCH, KOTTAYAM-686 002. ADV. SRI.K.S.DILIP - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.3544 of 2011-P ---------------------------------------- Dated this the 21st day of February, 2011. J U D G M E N T Challenge in this writ petition is against the proceedings initiated under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Consequent to default committed in repayment of a housing loan availed by the petitioner from the respondent Bank, immovable property which is the secured asset was proceeded against. Ext.P1 notice was published intimating steps taken under Section 13(4) of the Act. According to the petitioner the loan in question was availed in the year 2007 with a repayment period of 20 years and the coercive steps are now being pursued without considering his request for permitting regularisation on the basis of an offer made for payment of the amounts overdue. 2. Learned standing counsel appearing for the respondents on the other hand submitted that the loan W.P(C) No.3544 of 2011-P 2 account is in chronic default and the petitioner has not effected any considerable payment. It is further stated that the petitioner had clandestinely transferred a portion of the mortgaged property and the building was not completed construction. There is a clear misuse of the fund and also malafide acts on the part of the petitioner in transferring the secured asset. Hence the Bank is not favouring regularisation of the account. 3. Considering availability of effective alternative remedy, I am of the view that it is not justified on the part of this Court in interfering with the proceedings. However, learned counsel for the petitioner undertook that the petitioner is relinquishing all challenges against the proceedings and also rights if any to invoke the statutory remedy. On the other hand, limited prayer is made to permit regularisation of the account by making an offer that the amount in default will be paid within a short period. 4. Eventhough it was contended by the respondents that there occurred a clandestine transfer of a portion of the W.P(C) No.3544 of 2011-P 3 property mortgaged, I am of the view that any such transfer will not affect the rights of the respondent Bank since it will not vitiate the mortgage already created. Considering the fact that the repayment period is for 20 years, I am of the view that there is no justification in denying regularisation of the account. This is especially in view of the terms of the master circular issued by the Reserve Bank of India insisting upon the financial institutions to reclassify the loan as performing asset, once the arrears is cleared payment. 5. Under the above circumstances, I am of the view that eventhough interference on merits is not proper, indulgence can be shown in permitting the petitioner to regularise the account, especially in view of the fact that the petitioner had relinquished all challenges. 6. Therefore, the writ petition is disposed of directing the respondents to keep in abeyance all further steps for dispossession and sale of the property, subject to condition of the petitioner remitting the amounts overdue (defaulted monthly instalments along with interest and W.P(C) No.3544 of 2011-P 4 expenses if any due) in 2(two) equal monthly instalments falling due on or before 15.3.2011 and on or before 31.3.2011. The petitioner shall also make payment of the regular instalments due for the month of March 2011, along with said payments. 7. If payment of the defaulted amount is regularised as directed above, the respondents shall permit the petitioner to continue payment of future monthly instalments in accordance with the original schedule of repayment. 8. It is made clear that on the event of default in payment of any one of the instalments, the respondents will be free to proceed with further steps. It is made clear that the above relief is granted subject to condition that the petitioner is precluded from raising any subsequent challenge against the proceedings. C.K.ABDUL REHIM JUDGE ab