IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 6TH DECEMBER 2010 / 15TH AGRAHAYANA 1932 WP(C).No. 35981 of 2010(W) -------------------------- PETITIONER(S): --------------- JAYAKUMAR S., AGED 56 YEARS, S/O.SIVANANDAN, SIVA SOUDHAM, KOTTUKAL P.O., THIRUVANANTHAPURAM. BY ADV. SRI.B.HARISH KUMAR RESPONDENT(S): --------------- 1. THE AUTHORIZED OFFICER, CHIEF MANAGER (ADVANCES), UNION BANK OF INDIA, M.G.ROAD, THIRUVANANTHAPURAM-695004. 2. THE CHIEF MANAGER, UNION BANK OF INDIA, RETAIL ASSET BRANCH, STATUE, THIRUVANANTHAPURAM-695001. 3. UNION BANK OF INDIA, REP. BY BRANCH MANAGER, RETAIL ASSET BRANCH, STATUE, THIRUVANANTHAPURAM-695001. STANDING COUNSEL SRI.A.S.P. KURUP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06/12/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K. ABDUL REHIM, J ------------------------------ WP(C) NO. 35981 OF 2010 --------------------------------------- Dated this the 6th day of December, 2010 JUDGMENT Petitioner is challenging coercive steps initiated under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Consequent to failure on the part of the petitioner in effecting regular repayments of a vehicle loan availed from the 3rd respondent Bank, the respondents are now proceeding with steps for attachment of the vehicle in question by approaching the Chief Judicial Magistrate Court, invoking Section 14 (1) of the Act. 2. According to the petitioner the classification of the loan account as 'NPA' was done in an illegal and irregular manner. Further it is contended that the petitioner had remitted considerable amounts to regularize the account, but the respondents are still 2 WP(C) No. 35981/2010 proceeding with coercive steps and hence the Writ Petition is filed. 3. According to standing counsel appearing for the respondent Bank the loan was availed in the year 2008 to the tune of Rs.2,25,000/- with a period of repayment extending to four years. Since there was consecutive default for more than three monthly instalments, the loan account was classified as 'NPA' on 10.03.2010. It is further stated that on 30.11.2010 there is an outstanding liability of Rs.1.90 lakhs. 4. Considering the fact that the statute provides effective alternate statutory remedy to challenge the steps initiated under SARFAESI Act, it is not proper or justified to interfere to restrain such proceedings. This is especially in view of the directions of the Hon’ble Supreme Court in United Bank of India Vs. Satyavati Tondon and others [2010 (8) SCC 110]. 5. However, learned counsel appearing for the 3 WP(C) No. 35981/2010 petitioner submitted that the petitioner is relinquishing all challenges against the SARFAESI proceedings and he is not intending to invoke any of the statutory remedies. On the other hand, the limited prayer is to permit to regularize the account, on the basis of an offer that he will pay off the defaulted arrears within a short period. 6. Having considered the facts and circumstances, I am of the view that, eventhough interference on merits is not desirable, indulgence can be shown in permitting the petitioner to regularize the account. 7. Accordingly the Writ Petition is disposed of directing the respondents to keep in abeyance all further coercive steps pursuant to the notices already issued, provided the petitioner remits the amounts in default (defaulted monthly instalments along with interest and expenses if any due) in 9 (nine) equal monthly instalments falling due on or before 31.12.2010 and on or before the last day of the succeeding months. The petitioner shall also 4 WP(C) No. 35981/2010 make payment of the regular instalments due for the respective months from December, 2010 onwards. 8. If payment of the defaulted amounts is regularised as directed above, the respondents shall permit the petitioner to make payment of the future monthly instalments in accordance with the original schedule. 9. It is also made clear that the respondents will be free to proceed with further steps on the basis of the notices issued, in the case of default in payment of any of the instalments. The petitioner is precluded from raising any subsequent challenge against such proceedings at any later point of time. C.K. ABDUL REHIM JUDGE dnc