IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 3RD APRIL 2009 / 13TH CHAITHRA 1931 WP(C).No. 19635 of 2007(K) -------------------------------------- PETITIONER(S): ------------------------- 1. SEENA BABU, PROPRIETRIX OF JESUS UMBRELLA FACTORY, NEW CHURCH ROAD, THRISSUR, THRISSUR DISTRICT. 2. JOSEPH BABU, S/O. VARGHESE, ARIMBOOR ADAMBUKULAM HOUSE, KODANNUR, THRISSUR DISTRICT. BY ADV. MR.M.K.DILEEP KUMAR RESPONDENT(S): -------------------------- 1. THE BRANCH MANAGER, DHANALAKSHMI BANK LTD., HIGH ROAD, THRISSUR, THRISSUR DISTRICT. 2. AUTHORISED OFFICER, DHANALAKSHMI BANK LTD., ZONAL OFFICE, PUNKUNNAM P.O., THRISSUR DISTRICT. ADV. MR.C.K.KARUNAKARAN,SC,DHANALAKSHMI BAN FOR R1 & 2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/04/2009 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.19635/2007 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE PLAINT IN OS. 641/04 BEFORE THE SUB COURT, THRISSUR. P2:- COPY OF THE WRITTEN STATEMENT FILED BY THE PETITIONERS INPURSUANCE TO EXT.P1. P3:- COPY OF THE NOTICE DT. 15.3.07 ISSUED BY 2ND RESPONDENT TO THE PETITIONERS. P4:- COPY OF THE REPLY DT. NIL ISSUED BY THE PETITIONER'S COUNSEL TO THE 2ND RESPONDENT. TRUE COPY P.A. TO JUDGE TSS P.R.RAMACHANDRA MENON, J. ~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C) No. 19635 of 2007 ~~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 3rd day of April, 2009 J U D G M E N T The petitioners are challenging the proceedings pursued by the respondent Bank, under the SARFAESI Act, when they happened to be a defaulter in clearing the liability to the Bank. 2. The first petitioner is the borrower and the second petitioner, who is her husband is the guarantor. The first petitioner was running a small scale industrial unit engaged in 'umbrella making' and had availed a cash credit facility of Rs.1,00,000/- from the Bank. Because of the adverse circumstances, the over draft facility as stated above was closed, after raising a 'term loan' from the Bank on 17.1.2002. It is the case of the petitioners that the respondent Bank has already filed a civil case as O.S. 641/2004 before the Sub Court, Trichur for recovery of the amount under the 'term loan' and that it is still pending. The petitioners contend that the proceedings pursued by the respondent bank under the SARFAESI Act, during the pendency of the civil case are wrong; that the said proceedings are not correct or sustainable in so far as the debt is “time barred” and when there is a clear hurdle as provided under Section 36 of the SARFAESI Act prohibiting the Bank from pursuing such exercise in view of the Law of Limitation. It is asserted by the petitioners that since the overdraft facility was already closed and the amount stated as due as W.P.(C) No. 19635 of 2007 -:2:- borne by Ext.P1 complaint is only on the basis of the cause of action under the 'term loan' granted on 17.1.2002, the prescribed period of limitation expired on 16.1.2005 and no proceedings under the SARFAESI Act would lie. The petitioners have conceded that the civil suit has been preferred well within the prescribed period of 3 years and the respondent Bank is at liberty to pursue the same before the civil court. 3. It has to be noted that the 'term loan' was secured by the petitioners admittedly by depositing the title deeds, creating equitable mortgage over the property. This being the position, the prescribed period of limitation as provided under Article 62 of the Limitation Act is '12' years and not 3 years and hence the plea of Limitation cannot be of any consequence. 4. When the above matter came up for consideration before this Court on 27.6.2007, an interim order of stay was passed by this Court on condition that the petitioners paid an amount of Rs.50,000/- within a period of 3 weeks. No counter affidavit has been filed by the Bank as to whether the said amount was paid. The learned counsel for the respondent Bank, on the basis of the instructions stated as received, submits that the petitioners have paid an amount of Rs.50,000/- on different dates, though not within the time fixed by this Court. 5. Considering the facts and circumstances of this case, it is found fit W.P.(C) No. 19635 of 2007 -:3:- and proper to permit the petitioners to clear the outstanding liability by way of six equal monthly installments commencing from May, 2009. The first installment shall be paid on or before 30th May, 2009 and the subsequent installments shall be paid on or before 30th of every succeeding month. If there is failure to deposit any of the instalments as aforesaid, the benefit of this judgment will stand recalled automatically and the Bank will be at liberty to forthwith proceed with the recovery steps. The Writ Petition is disposed of accordingly. P.R.RAMACHANDRA MENON, JUDGE kmd.