IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 10TH JANUARY 2011 / 20TH POUSHA 1932 WP(C).No. 37450 of 2010(E) -------------------------- PETITIONER: ------------------ CHANDRA BHUPESH U., ULLADATH HOUSE, NEAR T.P.S.HOSPITAL, CHERUVANNUR, FEROK P.O., KOZHIKODE DISTRICT. BY ADV. SRI.M.MUHAMMED SHAFI RESPONDENTS: --------------------- 1. SOUTH INDIAN BANK, REGIONAL OFFICE KOZHIKODE, P.B.NO.933, CHAKKAROTHKULAM, P.O.WEST HILL, KOZHIKODE-673005. 2. BHASKARAN T., THAYYIL HOUSE, CHERUVANNUR, FEROK P.O., KOZHIKODE DISTRICT-673009. R1 BY ADV. SRI.GEORGE VARGHESE,SC,SOUTH INDIAN BANK THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.37450 of 2010-E ---------------------------------------- Dated this the 10th day of January, 2011. J U D G M E N T Consequent to default committed by the petitioner in repaying a business loan availed from the 1st respondent Bank, immovable property, which is the secured asset was proceeded against by invoking provisions under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Ext.P3 is the notice issued under Rule 8 of the Security Interest (Enforcement) Rules intimating steps taken under Section 13(4). 2. According to the petitioner, the property belongs to the 2nd respondent, who is his father-in-law, who stood as guarantor. It is further stated that due to financial crisis, the petitioner is not in a position to make payment of the entire amounts due. The petitioner points out that the loan in question was availed in the year 2008 and the repayment period is for five years. According to the petitioner inspite W.P(C) No.37450 of 2010-E 2 of approaches made offering payment of the defaulted amounts, within a short period, the 1st respondent is proceeding with coercive steps. Hence the writ petition is filed. 3. Heard; counsel appearing for the 1st respondent Bank. It is stated that an amount of Rs.2,00,000/- was availed in the year 2008 and the petitioner had defaulted payments. According to the 1st respondent, the outstanding balance is around Rs.2.56 lakhs. Since the loan account is in chronic default, the 1st respondent is not favouring regularisation of the account. 4. Considering the fact that the petitioner has got an effective alternative remedy to challenge Ext.P3, I am not inclined to entertain this writ petition. However, learned counsel for the petitioner submitted that neither the petitioner nor the 2nd respondent is intending to pursue any statutory remedy and that they are relinquishing all challenges against the impugned proceedings. On the other hand, limited prayer of the petitioner is only to permit to W.P(C) No.37450 of 2010-E 3 regularise the account, on the basis of an offer that the defaulted amounts will be paid within a short period, in instalments. 5. Eventhough the 1st respondent Bank is not favouring regularisation, I am of the view that in view of the guidelines issued by the Reserve Bank of India in its Master Circulars, which is having statutory force, the Bank is at an obligation to reclassify the loan as 'performing asset', if the petitioner makes payment of the defaulted amounts. Under such circumstances, I am of the view that since the petitioner had relinquished all challenges, he can be permitted to regularise the account. 6. Therefore, the writ petition is disposed of directing the 1st respondent to keep in abeyance all further coercive steps initiated on the basis of Ext.P3 notice, if the petitioner remits the amounts in default (defaulted instalments along with interest and expenses if any due ) in 3 (three) equal monthly instalments, falling due on or before 31.1.2011 and on or before the last day of two succeeding W.P(C) No.37450 of 2010-E 4 months. The petitioner shall also make payment of the regular monthly instalments due for the respective months along with such payments. 7. If payment of the defaulted amounts is regularised as per the stipulations contained above, the respondent shall permit the petitioner to continue payment of the future monthly instalments in terms of the original schedule of repayment. 8. It is made clear that on the event of default in payment of any one of the instalments as stipulated above or any future monthly instalments, the respondent will be free to proceed with further steps. It is further made clear that the above relief is granted subject to the condition that the petitioner is precluded from raising any subsequent challenge against such proceedings. C.K.ABDUL REHIM JUDGE ab