IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 19TH JANUARY 2011 / 29TH POUSHA 1932 WP(C).No. 30307 of 2010(K) -------------------------- CMP.4614/2010 of C.J.M.,KOLLAM .................... PETITIONER:- ------------------ M.RAMACHANDRAN PILLAI, SAVIDHAM, VALLIKEEZHU, KAVANADU.P.O., KOLLAM, KERALA-691 003. BY ADV. SRI.JOHN BRITTO SRI.C.A.RAJEEV RESPONDENTS:- ---------------------- 1. KOTAK MAHINDRA BANK LTD., IST FLOOR, TRUST PHARMA BUILDING, KAYATH LANE, JANATHA JN., PALARIVATTOM, COCHIN-682 025, REPRESENTED BY ITS MANAGER. 2. THE AUTHORIZED OFFICER, KOTAK MAHINDRA BANK LTD., IST FLOOR, TRUST PHARMA BUILDING, KAYATH LANE, JANATHA JN., PALARIVATTOM, COCHIN-682 025. ADV. SRI.LAL K.JOSEPH FOR R1 SRI.A.A.ZIYAD RAHMAN FOR R1 SRI.P.MURALEEDHARAN (THURAVOOR) FOR R1 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. = = = = = = = = = = = = = WP(C).No.30307 of 2010-K. = = = = = = = = = = = = = Dated this the 19th January, 2011. J U D G M E N T Consequent to default committed in repayment of a housing loan availed by the petitioner from ICICI bank, the respondents who had been assigned with the mortgage and underlying securities, has now initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Through Ext.P5, the Chief Judicial Magistrate Court was approached invoking Section 14(1) of the Act. That court had appointed an Advocate Commissioner to take over the possession of the property, who in turn had issued Ext.P4 notice. 2. The petitioner is challenging the proceedings on various grounds, inter-alia the rights of the respondents to initiate the proceedings on the basis of alleged assignment. However, it was also contended that the WP(C).No.30307 of 2010-K. 2 coercive steps were being persuaded without acceding to the request of the petitioner to regularise the account on the basis of an offer to make payment of the amounts within a short period. 3. It is noticed that the petitioner had failed to invoke the statutory remedy available against the steps initiated under Sec.13(4) on an appropriate stage. It is further noticed that the challenge against validity of the assignment of the securities by M/s.ICICI Bank in favour of the respondent, has already been upheld by the Hon'ble Supreme Court. Under the above circumstance, I find no merit to interfere with the proceedings and rather it is not justified to interdict with the steps by invoking powers vested under Article 226 of the Constitution of India. 4. However, learned counsel appearing for the petitioner submitted that the petitioner is ready and willing to regularise the account by making payment of the entire defaulted amounts ,within a short period, on the basis of the WP(C).No.30307 of 2010-K. 3 specific undertaking that the petitioner is relinquishing all challenges against the proceedings and that the petitioner is not intending to pursue any statutory remedy. It is submitted that the petitioner had already paid a sum of ` 2 lakhs. According to the petitioner, the balance amount in default will be only around ` 1 lakh and that the repayment period of the loan in question is for 15 years. 5. Learned standing counsel appearing for the respondent Bank submitted that the loan account in question was classified as 'NPA' even prior to the year 2007. Under such circumstance revival of the loan account is not possible. Learned counsel also raised dispute regarding correctness of the arrears outstanding. 6. Considering the guidelines issued by the Reserve Bank of India which is having statutory force, especially those contained in the Master Circular No.RBI/2009- 10/39/DBOD.No.BP.BC.17/ 21.02.048/2009-10, it is evident that the respondent Bank had an obligation to reclassify the WP(C).No.30307 of 2010-K. 4 loan account as a 'performing asset', once the arrears is cleared payment. Considering the fact that the repayment period of the loan is for 15 years and also considering the fact that the petitioner had effected payment of considerable amounts, I am of the view that the petitioner can be permitted to regularise the account, especially in view of the fact that he is relinquishing all challenges against the proceedingsunder the SARFAESI Act. 7. In the result, the writ petition is disposed of directing the respondents to keep in abeyance all further proceedings under the SARFAESI Act, provided the petitioner remits the entire arrears (defaulted instalments along with interest and expenses if any due) in 2 (two) equal monthly instalments, falling due on or before 15.2.2011 and on or before 15.3.2011. The petitioner shall also make payment of the regular monthly instalments due for the respective months along with the above said payments. 8. If payment of amount in default is regularised as WP(C).No.30307 of 2010-K. 5 directed above, the respondents shall permit the petitioner to continue payment of the future monthly instalments in accordance with the original schedule of payment. 9. It is made clear that on the event of default in payment of any one of the instalments as stipulated above or in default in payment in any one of the future monthly instalments, the respondents will be free to proceed with further steps pursuant to the notices already issued. It is also made clear that the above relief is granted subject to condition that the petitioner is precluded from raising any subsequent challenges against such proceedings. C.K.ABDUL REHIM, (Judge) Kvs/-