IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 21ST OCTOBER 2009 / 29TH ASWINA 1931 WP(C).No. 25200 of 2009(T) -------------------------- PETITIONER(S): --------------- 1. K.RAVINDRANATHAN, SOLE PROPRIETOR, M/S. R. SOMANATHA PILLAI, IOC DEALERS, KALLAYATH KADAVU, KAVANAD, KOLLAM. 2. P.T.AMMINI, W/O. RAVINDRANATHAN, DO-DO- BY ADV. SRI.K.B.PRADEEP RESPONDENT(S): --------------- 1. UCO BANK, BEACH ROAD BRANCH, BEACH ROAD, KOLLAM-691001, REP. BY ITS AUTHORISED OFFICER & CHIEF MANAGER. 2. THE INDIAN OIL CORPORATION LTD., PANAMPILLY AVENUE, PANAMPILLY NAGAR, ERNAKULAM, REP. BY ITS GENERAL MANAGER. R1 BY ADV. SRI.GEORGE KARITHANAM VARGHESE, STANDING COUNSEL R2 BY ADV. SRI. E.K. NANDAKUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: shg/ C.K. ABDUL REHIM, J - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.25200 of 2009 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 21st day of October, 2009 J U D G M E N T 1. Petitioners are husband and wife. They have availed different loans from the 1st respondent Bank in connection with the business in petroleum products conducted by the 1st petitioner. Property belonging to the petitioners were mortgaged as security for the loan transactions. Consequent to default in repayment in the term loan and default in regular operations in the cash credit account, the 1st respondent Bank initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Ext.P1 is the notice issued under Section 13 (2) of the Act, with respect to one of the accounts. According to the petitioners, on receipt of Ext.P1, they have approached the 1st respondent and W.P.(C)No. 25200 of 2009 -2- expressed willingness to regularise the account by paying the defaulted amounts, within a reasonable time. Complaint of the petitioners is that without acceding to any such demand, coercive steps are now being persued for taking over possession and for sale of the secured assets. 2. In the statement filed on behalf of the 1st respondent it is mentioned that the total loan facility availed by the petitioners is about Rs.75,00,000/- and the operation of the cash credit account was not at all satisfactory. The term loan was once rescheduled and even after such facility granted there was no prompt repayments. It is further alleged that the petitioners are routing their business transactions through other Banks, without conducting operations in the cash credit facility, which is in total violation of the terms of the loan agreement. It is stated that the amounts outstanding in the cash credit accounts and mortgage loan accounts availed by the 1st petitioner is Rs.47,54,299/- as on 31.03.2009 and the amounts due in the W.P.(C)No. 25200 of 2009 -3- cash credit and mortgage loan account availed by the 2nd petitioner is Rs.27,40,133.11/- as on 31.03.2009. Therefore learned counsel for the 1st respondent submitted that the total amount due is about Rs.75,00,000/- along with interest due from 01.04.2009 onwards. 3. By virtue of an interim order of this court dated 28.08.2009, the petitioners have effected payment of Rs.10 lakhs in two installments. The petitioners have produced an additional document, Ext.P2 , from which it is revealed that the petitioners have already approached the Chief Manager of the 1st respondent Bank with a request for consideration of the accounts for settlement under the 'One Time Settlement Scheme'. But the learned standing counsel had produced copy of a reply already issued by the 1st respondent informing the petitioners that the request was rejected for the reason that no Scheme for One Time Settlement is prevailing at present. W.P.(C)No. 25200 of 2009 -4- 4. Having confronted with the above circumstances, learned counsel for the petitioners submitted that the petitioners are intending to approach the authorities of the 1st respondent Bank at the Regional Office level in order to seek waiver of interest/default interest to the possible extent. It is further submitted that the petitioners are ready and willing to pay off the entire liability after considering such waiver, within a reasonable time in installments. However learned standing counsel for the Bank is not favouring any such suggestions on the ground that the loan accounts are in chronic default and the petitioners have violated terms and conditions of the loan agreement. 5. Having considered rival contentions and facts and circumstances of the case I am of the opinion that if the petitioners makes payment of a considerable portion of the outstanding amount, he can be permitted to persue remedies regarding waiver if any possible. Accordingly the writ petition is disposed of directing the petitioners to make W.P.(C)No. 25200 of 2009 -5- a further payment of Rs.25,00,000/- in two installments of Rs.12.5 lakhs each, on or before 15.11.2009 and 30.11.2009. After effecting such payments, the petitioners shall make a representation to the Zonal Manager of the 1st respondent Bank having jurisdiction requesting for considering waiver of interest/penal interest to the possible extent. The 1st respondent Bank shall inform the petitioners about the balance outstanding after considering waiver of interest/penal interest to the possible extent. The petitioners shall continue payment of the outstanding balance so intimated in three (3) equal monthly installments starting from 31.12.2009 onwards and on or before the last day of the two succeeding months. If amounts as stipulated above are paid without any default the respondent Bank shall keep further actions pursuant to Ext.P1 notice in abeyance. 6. It is made clear that on the event of default in payment of any amounts as stipulated above, the 1st W.P.(C)No. 25200 of 2009 -6- respondent will be free to proceed with further steps under the SARFAESI Act and on such event the petitioner is precluded from raising any further challenge against the proceeding either before this court or before any other forum. C.K. ABDUL REHIM JUDGE shg/