IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 5TH JANUARY 2011 / 15TH POUSHA 1932 WP(C).No. 31839 of 2010(D) -------------------------- PETITIONER: ------------------- PUSHPALATHA V., VEENA VISHNAVAM, ALAMPALLAM, KOLLENGODE, PALAKKAD. BY ADV. SRI.VINOD KUMAR.C RESPONDENTS: ----------------------- 1. THE MANAGER, HDFC, MISSION SCHOOL JUNCTION, PALAKKAD-14. 2. AUTHORISED OFFICER, HDFC, MISSION SCHOOL JUNCTION, PALAKKAD-14. R1 BY ADV. SRI.K.K.CHANDRAN PILLAI, SENIOR ADVOCATE R2 BY SRI.SAJUSH PAUL, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.31839 of 2010-D ---------------------------------------- Dated this the 5th day of January, 2011. J U D G M E N T Consequent to default committed in repaying a housing loan availed by the petitioner from the respondent Bank during the year 2004, steps was initiated against the immovable property, which is he secured asset, under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It is stated that on invoking Section 14(1) of the Act, the respondent Bank had already approached the Chief Judicial Magistrate Court and an Advocate Commissioner was appointed to take over possession of the property. 2. According to the petitioner, repayment period of the loan in question was 20 years, which will expire only in the year 2024, and inspite of approaches made by the petitioner offering payment of the defaulted amounts, the Bank is not permitting regularization of the loan account. W.P(C) No.31839 of 2010-D 2 Hence the petitioner is seeking interference of this Court to restrain the recovery steps and to permit the petitioner to regularize the account. 3. Learned standing counsel appearing for the respondent Bank, on the basis of instructions, submitted that the loan account is in chronic default and the petitioner has not paid any amount since March 2009 onwards. It is further stated that even on earlier two occasions the petitioner had defaulted payment of the regular instalments. But the Bank had permitted him to pay off the defaulted amounts and to continue payment of monthly instalments in accordance with the original schedule. Under such circumstances, the Bank is opposing regularization of the account. 4. Considering the fact that the petitioner has not chosen to avail statutory remedy provided under the SARFAESI Act, it is not proper for this Court to interdict the proceedings, exercising jurisdiction under Article 226 of the Constitution of India. This is especially in view of the W.P(C) No.31839 of 2010-D 3 dictum laid by the Hon’ble Supreme Court in United Bank of India V Sathyawati Tondon & others (2010(8) SCC 110) 5. However, learned counsel for the petitioner submitted that the petitioner is relinquishing all challenges against the proceedings and that she is not intending to pursue any of the statutory remedies. On the other hand, limited prayer of the petitioner is only to permit the petitioner to regularise the account, on the basis of an offer that the defaulted amounts will be paid within a short period. 6. Considering the above submission, an interim order of stay against dispossession was granted by this Court on 18.10.2010, subject to condition of the petitioner remitting a sum of Rs.40,000/- within three weeks thereof. It is conceded that the petitioner had remitted the said amount. 7. Considering mandate of the Master Circular issued by Reserve Bank of India which is having statutory W.P(C) No.31839 of 2010-D 4 force, I am of the view that if the petitioner makes payment of the defaulted amount, the respondents are at an obligation to re-classify the account as 'performing asset'. Further in view of the fact that the petitioner is relinquishing all challenges against the SARFAESI proceedings, I am of the view that indulgence can be shown in permitting regularization, subject to rights reserved in favour of the respondent Bank to proceed with further steps in case any default. 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 property in question, subject to condition of the petitioner remitting the entire amounts in default, along with interest and expenses if any due, on or before 31.1.2011, along with payment of regular instalment due for the month of January 2011. 9. If payment in the account is regularised as directed above, the respondents shall permit the petitioner W.P(C) No.31839 of 2010-D 5 to continue payment of future monthly instalments in terms of the original schedule. 10. It is made clear that on the event of default in payment of any one of the instalments as stipulated or any future monthly instalments, the respondents will be free to proceed with further steps on the basis of the proceedings now initiated by the Chief Judicial Magistrate Court. 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