IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 13TH JUNE 2011 / 23RD JYAISHTA 1933 WP(C).No. 7831 of 2011(D) -------------------------------- PETITIONER(S): ------------------- T.N. THANKAMMA, AGED 49 YEARS, W/O.M.J. APREYAN, MANTHADATHIL HOUSE, VALIYA POYIL, OLAT.P.O, CHERUVATHUR VIA, KASARAGOD DISTRICT. BY ADV. SRI.K.P.HARISH RESPONDENT(S): -------------------- 1. THE AUTHORISED OFFICER AND PA TO PRESIDENT, THE KASARAGOD DISTRICT CO-OPERATIVE BANK LTD., HEAD OFFICE, P.B. NO. 48, NAYAK'S ROAD, KASARAGOD - 671 121. 2. THE KASARAGOD DISTRICT CO-OPERATIVE BANK LTD., KASARAGOD REPRESENTED BY ITS SECRETARY, PIN - 671 121. 3. THE GENERAL MANAGER (IN CHARGE), THE KASARAGOD DISTRICT CO-OPERATIVE BANK LTD., HEAD OFFICE, P.B. NO. 48, NAYAK'S ROAD, KASARAGOD - 671 121. R2-3 BY ADV. SRI.M.SASINDRAN,SC,KASARGOD DIST.CO.BANK THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.7831 of 2011 ------------------------------------------- Dated this the 13th day of June, 2011 J U D G M E N T ---------------------- Consequent to default committed in repayment of a housing loan availed by the petitioner from the respondent Bank, proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was initiated. When Ext.P1 demand notice was issued under Section 13(2) of the Act, the petitioner submitted Ext.P5 reply requesting for statement intimating overdue amounts (arrears) and to permit regularisation of the account offering remittance of the amounts overdue for payment. Raising complaint against non-consideration of the reply submitted, the petitioner had approached this court in WP(C). 2362/11. In Ext.P6 judgment the writ petition was disposed of directing the respondents to consider Ext.P5 and to take a decision thereof and further to intimate such decision to the petitioner at the earliest. It was made clear by this court that further steps can be proceeded only after taking a decision on Ext.P5 and after intimating such decision to the petitioner. 2. Grievance of the petitioner is that, in spite of Ext.P6 judgment issued on 1.2.2011, without taking note of the W.P.(C).7831/11 -2- directions contained therein, the respondents had issued Ext.P7 letter on 3.2.2011 refusing the request for permitting regularisation, assigning the reason that when a demand under Section 13(2) raised, there is no provision for regularisation or for re-schedulement of the loan account. Under such circumstances, the petitioner is challenging Ext.P7 proceedings and further the coercive steps. The petitioner inter alia seeks direction to the respondent Bank to permit regularisation of the account. 3. Heard; learned standing counsel appearing for the respondent Bank. It is stated that, after availing the loan in the year 2006, the petitioner had effected repayments only upto March 2008 and thereafter the account is in chronic default. It is stated that the account was declared as 'NPA' and further steps under the SARFAESI Act was proceeded. It is also mentioned that, in spite of receipt of demand under Section 13 (2), the petitioner had not taken any earnest efforts to pay off the liability. Under such circumstances, the respondent Bank is not favouring in permitting regularisation of the account. 4. Considering the effective remedy provided under Section 17(1) of the Act, it may not be justified on the part of this court to interdict with the proceedings, at this stage. However, W.P.(C).7831/11 -3- learned counsel for petitioner made a request to permit regularisation on the basis of a specific undertaking that the petitioner is relinquishing all challenges raised against the proceedings and that she is not intending to pursue any statutory remedy. It is offered that the amounts overdue for payment will be remitted within a short period, in instalments. However, the offer for regularisation is not acceptable to the respondents in view of the contentions as stated above. But, it is pertinent to note that in the 'Master Circulars' issued by the Reserve Bank of India, which is having statutory force, it is held as obligatory on the part of creditors to re-classify the loan as 'performing assets', once the default in payment is regularised. Considering the fact that the repayment period of the loan is for 15 years and also considering the relinquishment made, I am of the view that the petitioner can be permitted to regularise the account. 5. Therefore the writ petition is disposed of directing the respondents to keep in abeyance all further coercive steps of recovery initiated pursuant to Ext.P4 and P5, provided the petitioner remits the entire amounts remaining overdue for payment (defaulted monthly instalments along with interest and expenses if any) on or before 15.7.2011, along with payment of regular monthly instalments due for the month of July 2011. W.P.(C).7831/11 -4- 6. If payments of the defaulted amounts is regularised as directed above, then the respondents shall permit the petitioner to continue payment of future monthly instalments in accordance with the original schedule of repayment. 7. It is made clear that on the event of default in payment of any one of the instalments as stipulated above or any of the future monthly instalments, the respondents will be at liberty to proceed with further steps and on such event the petitioner will be precluded from raising any subsequent challenge against such proceedings. C.K.ABDUL REHIM, JUDGE. okb