IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 11TH NOVEMBER 2010 / 20TH KARTHIKA 1932 WP(C).No. 30971 of 2010(V) --------------------------------------- CRMP.3451/2010 of C.J.M.,THRISSUR .................... PETITIONER(S): ------------------------ PRASAD, AGED 45 YEARS, S/O.SADASIAVAN, VAZHAVILA VEEDU, PAMBUR, KUTTUR P.O., THRISSUR-680 013. BY ADV. SRI.V.C.MADHAVANKUTTY RESPONDENT(S): --------------------------- HOUSING DEVELOPMENT FINANCE CORPORATIN LTD., RAMON HOUSE, 169 BLOCK BAY, RECLAMATION, MUMBAI-20, REPRESENTED THROUGH THE AUTHORISED OFFICER, NISHAD AHMED, AGED 46 YEARS, S/O.OOMMER ESSA, HDFC HOUSE, III FLOOR, RAVIPURAM JUNCTION, M.G.ROAD,COCHIN-15. BY SRI.K.K.CHANDRAN PILLAI, SENIOR ADVOCATE BY ADV. SRI.A.S.SAJUSH PAUL SRI.THOMAS JAMES MUNDACKAL SRI.BOBBY THOMAS THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts C. K. ABDUL REHIM, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) No. 30971of 2010 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 11th day of November, 2010 JUDGMENT Proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) against the secured asset, which was mortgaged by the petitioner for securing loan availed from the respondent, is under challenge. 2. The petitioner availed the loan for construction of a residential house. As per the agreement, the loan amount has to be repaid along with interest, in 192 equal monthly instalments. Consequent to default committed in repayment, the respondent initiated proceedings and they invoked Section 14(1) of the SARFAESI Act before the Chief Judicial Magistrate Court. An Advocate Commissioner was appointed by that court to take over possession of the immovable property. Ext.P1 is the notice issued by the W.P.(C) No. 30971/2010 2 Advocate Commissioner requesting the petitioner to hand over possession of the property. . 3. According to the petitioner, the petitioner was ready to make payment of the defaulted amount and to regularize the account. But the respondents had proceeded with the coercive steps. Hence, the petitioner is seeking a direction to quash the proceedings pending before the Chief Judicial Magistrate Court. 4. It is evident that the petitioner has not resorted to any of the statutory remedies provided under the SARFAESI Act, at the stages of notices issued either under sections 13 (2) or under section 13(4). Even against the proceedings impugned herein the petitioner is not raising any challenges, which is legally sustainable. Therefore, I am not inclined to interfere with the matter on merits, especially taking note of the directions contained in the recent decision of the Apex Court in United Bank of India V. Satyawati Tandon ((2010) 8 SCC 110). 5. However, learned counsel for the petitioner made W.P.(C) No. 30971/2010 3 an appeal to this Court to permit payment of the defaulted arrears in order to regularize the account on the promise that the petitioner is not intending the pursue any statutory remedies and that he is relinquishing all challenges raised against the impugned proceedings. 6. Learned counsel for the respondent, on the basis of the instructions, submitted that the total amount due under the loan account is more than 6.7 lakhs. It is further submitted that the arrears with respect to defaulted payments along with interest and other expenses will come around to Rs.1.73 lakhs. Since the loan account is in chronic default, the respondent is not intending to regularize the account. 7. Having considered the facts and circumstances, I am of the opinion that, even though interference on merits is not possible, the petitioner can be permitted to regularize the account, since he had relinquished all challenges against the impugned proceedings. Guidelines of the Reserve Bank of India issued in the matter of reclassifying W.P.(C) No. 30971/2010 4 'Non Performing Accounts', which is having statutory force, is also taken note of in this regard. Therefore, I am inclined to show indulgence in permitting the petitioner to regularize the account. 8. Under the above circumstances, the writ petition is disposed of directing the respondents to keep in abeyance all further steps for dispossession and sale of the secured asset, subject to condition of the petitioner remitting the entire amount in default (defaulted instalments along with interest and expenses if any) in two equal monthly instalments, falling due on or before 30-11-2010 and on or before 30-12-2010. The petitioner shall also make payment of the regular instalments due with respect to the months of November, 2010 and December, 2010, along with the above said payments. 9. If payment of the defaulted amount is regularized as directed above, the respondent shall permit the petitioner to continue payment of future instalments in accordance with the original schedule of repayment. W.P.(C) No. 30971/2010 5 10. It is made clear that on the event of default in payment of amount as stipulated above or any of the future monthly instalments, the respondent will be at liberty to proceed with further steps on the basis of the orders already issued by the Chief Judicial Magistrate Court. It is also made clear that the relief granted above is subject to condition that the petitioner is precluded from raising any subsequent challenge. 11. It is further made clear that this judgment will not stand in the way of the petitioner approaching the respondent seeking waiver of any of the amounts demanded and the respondent from considering such request favourably. C. K. ABDUL REHIM, JUDGE. mn.