IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 12TH AUGUST 2010 / 21ST SRAVANA 1932 WP(C).No. 23448 of 2010(E) -------------------------- PETITIONERS: --------------- 1. NAJUMA SALI, W/O.K.M.SALI,AGED 40, 42/2252C,ST.BENEDICT ROAD,ERNAKULAM,KOCHI-18 NOW RESIDING AT HOUSE NO.2256G,PRIVIDENCE ROAD,ERNAKULAM-18,ERNAKULAM VILLAGE, KANAYANNUR TALUK. 2. K.M.SALI,S/O.LATE K.A.MOHAMMED,AGED 52, 42/2252C,ST.BENEDICT ROAD,ERNAKULAM,KOCHI-18 NOW RESIDING AT HOUSE NO.2256G,PRIVIDENCE ROAD,ERNAKULAM-18,ERNAKULAM VILLAGE, KANAYANNUR TALUK. BY ADV. MR. K.C.CHARLES MR. M.POLY MATHAI MR. P.CHELLAPPAN MR. HARI MENON. MR. VIMAL K.CHARLES MS. A.T.RENJU RESPONDENT: --------------- VIJAYA BANK LIMITED REPRESENTED BY ITS BRANCH MANAGER, VYTTILA BRANCH,KOCHI-19, POONITHURA VILLAGE, KANAYANNUR TALUK. ADV. MS. SALLY THOMAS CHACKO THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/08/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P. (C) No. 23448 of 2010 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 12th day of August, 2010 JUDGMENT The petitioner is stated as aggrieved of the declaration of the account as 'NPA' and the steps being pursued by the respondent Bank, under the SARFAESI Act. 2. The petitioner had availed 'three' different loans from the respondent Bank way back in the year 2005. The first one was of 'housing loan' to the tune of Rs. 90 lakhs and the second and third were 'term loans' for a sum of Rs. 9.5 lakhs and Rs. 40 lakhs respectively, sanctioned and disbursed after creating security interest over the property in question. It is contended that, the petitioner was very much regular in effecting the EMIs without default. The case projected by the petitioner is that, the rate of interest in respect of the first loan, as borne by the documents produced as Exts. P1 to P5, was only @ 9 %, while in respect of the 2nd and 3rd loans, it was originally stipulated @ 14.25 %, which was supposed to be converted as 'V-rent Scheme', on generating rent form the concerned tenants, on which event, the rate of interest was agreed to be reduced to @ 9%. 3. The learned counsel for the petitioner submits that, there was W.P. (C) No. 23448 of 2010 : 2 : absolutely no dispute till the year, 2002 and thereafter arose some difference of opinion with the concerned officer, in connection with a 'corruption case' registered by the CBI officials against the officers of the respondent Bank, in which the second petitioner is an eye witness. It was pursuant to this, that the officers of the respondent Bank, chose to harass the petitioner and the rate of interest originally agreed in respect of the first loan was unilaterally enhanced to be charged @ 14.25% and in respect of the other two term loans, even after generating funds by way of rent, they were not converted to 'V-Rent Scheme' as agreed so as to bring down the rate of interest from 14.25% to 9 %. The learned counsel submits that, because of the recalcitrant attitude pursued by the Bank, the petitioner was constrained to file two civil suits before the concerned Civil Court, wherein interim order of injunction was passed, which is still subsisting, whereby the respondent Bank has been prevented from raising interest above the rate of 9% in respect of the 'housing loan'. 4. The respondent has filed a detailed counter affidavit explaining the sequence of events and also producing copies of the relevant documents as Annexure R1 (a) to R1 (h). With reference to the contents of the counter affidavit, the learned counsel for the respondents submits that, there is no basis for the averments and W.P. (C) No. 23448 of 2010 : 3 : allegations in the Writ Petition and that the rate of interest is being charged in confirmity with the relevant guidelines issued by the 'RBI' from time to time and the respondent is bound to follow the said guidelines. It is also pointed out that, after effecting the construction utilizing the amount availed under 'housing loan', the petitioner used the same for 'commercial purpose' and this being the position, going by mandate given under RBI, the rate of interest is liable to be converted to commercial rate. As such, the EMIs to be remitted by the petitioner have gone up to Rs.1,40,080/- from Rs. 81,000/-. In spite of communicating the position, the petitioner has never chose to satisfy the enhanced EMIs, under which circumstances, the Bank was constrained to proceed with further steps under the relevant provisions of the SARFAESI Act, after declaring the account as NPA. The factual position as to the 'overdue' amount under the 'three' different loans are discernible from Exts.R1 (e) to R1 (h). The relevant stipulations issued by the RBI from time to time are not liable to be challenged under any circumstance, submits the learned counsel for the respondent Bank. 5. The learned counsel for the petitioner submits that, in view of the averments in paragraph 17 of the counter affidavit that the petitioner is still at liberty to take remedial measures to avoid consequences of W.P. (C) No. 23448 of 2010 : 4 : remaining the account as 'NPA', the petitioner has thought it fit to satisfy the amounts shown as 'overdue' in Ext. R1 (e), R1 (g) and R(h), without prejudice to rights and liberties of the petitioner to challenge the proceedings before the appropriate forum. The learned counsel submits that the petitioner is ready and willing to satisfy Rs. 17 lakhs on 18.8.2010, which is recorded 6. In the above circumstances, this Court does not find it necessary to analyze the correctness or sustainability as to the rival submissions and as to the sequence of events for the time being. The petitioner is directed to deposit Rs. 17 lakhs on or before 18.8.2010, as assured and undertaken. On satisfying the said amount, further steps shall be taken by the respondent Bank, to take out the account from the purview of 'NPA' status forthwith. The Writ Petition is disposed of. P. R. RAMACHANDRA MENON, JUDGE kmd 1. The figure “2002” occurring in the first line of page No.2 of the judgment in W.P.(C) 23348/2010 dated 12.08.2010 is substituted with figure “2006”. W.P. (C) No. 23448 of 2010 : 5 : 2. The word “proceedings” occurring in the 4th line of page 4 of the judgment is substituted with the words “rate of interest”. 3. The words “without prejudice to the contentions regarding rate of interest” are inserted immediately after the word “undertaken” occurring the last but one sentence of the above judgment in paragraph 6 The above corrections are made as per order dated 19.08.2010 in I.A. No. 11782/2010.