IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID MONDAY, THE 23RD MARCH 2009 / 2ND CHAITHRA 1931 WP(C).No. 4501 of 2006(J) ------------------------------------ PETITIONER(S): ---------------------- HOLY CROSS HOSPITAL, PUTHUKAD, THRISSUR DISTRICT REPRESENTED BY ITS POWER OF ATTORNEY, DR. JOHNY M.C. BY ADVS. MR.SHAJI CHIRAYATH SMT.JIJI M. VARKEY RESPONDENT(S): ------------------------- 1. KERALA FINANCIAL CORPORATION, VELLAYAMBALAM, THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING DIRECTOR. 2. THE CHIEF MANAGER, KERALA FINANCIAL CORPORATION, BRANCH OFFICE, SMART CENTRE, KOKKALA, THRISSUR DISTRICT. ADV. MR.M.M.SAYED MUHAMMED, SC, KFC FOR R1 & 2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.4501/2006 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE LOAN SANCTION LETTER ISSUED BY THE IST RESPONDENT TO THE PETITIONER. P2:- COPY OF THE ONE TIME SETTLEMENT APPLICATION SUBMITTED BY THE PETITIONER TO IST RESPONDENT. P3:- COPY OF THE ORDER DIRECTING PETITIONER TO DEPOSIT ONE TIME SETTLEMENT PURSUANT TO EXT.P2 APPLICATION. P4:- COPY OF THE CASH RECEIPT FOR SUM OF RS.9,00,000/- DEPOSITED BY THE EPTITIONER PURSUANT TO EXT.P3 ORDER. P5:- COPY OF THE CASH RECEIPT FOR SUM OF RS. 50,000/- DEPOSITED BY THE PETITIONER PURSUANT TO EXT.P3 ORDER. P6:- COPY OF THE NOTICE ISSUED UNDER SECTION 29 OF THE STATE FINANCIAL CORPORATION ACT BY THE 2ND RESPONDENT BRANCH MANAGER TO THE PETITIONER. P7:- COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DIRECTING PETITIONER TO STOP ACTIVITIES IN THE HOSPITAL. TRUE COPY P.S. TO JUDGE TSS HARUN-UL-RASHID,J. --------------------------- W.P.(C).NO.4501 OF 2006 ---------------------------- DATED THIS THE 23RD DAY OF MARCH, 2009 JUDGMENT Petitioner availed an industrial term loan for construction of a hospital. The lst Respondent sanctioned an amount of Rs.106 lakhs for the construction of a hospital. Petitioner availed 71.58 lakhs out of the sanctioned amount during 1998 –2001. Petitioner had executed loan agreement on 25/3/1998 and 20/11/2001, hypothecated the movable assets and created equitable mortgage by deposit of title Deeds. The petitioner defaulted payment of instalments, in spite of repeated requests made by the Corporation. 2. Learned Standing Counsel for the respondents submitted that as on 25/10/2008 the outstanding amount is Rs.1,55,17,700/-. Ext.P6 is a notice dated 11/7/05 issued under Section 29 of the State Finance Corporation Act calling upon the petitioner to remit a sum of Rs.94,89,139/-, the amount -2- W.P.(C).No.4501/2006 outstanding as on the said date. In spite of Ext.P6 notice, the petitioner did not make any payment. 3. Petitioner had submitted a proposal for One Time Settlement of the loan account in November, 2004. The offer made by the petitioner is Rs.25,00,000/- towards the full ad final settlement of the account. At that time the amount outstanding in the loan account is approximately Rs.98 lakhs. The proposal was rejected for the reason that the amount offered is too low and is not acceptable to the respondents. 4. This writ petition is pending for the last more than 3 years. No amount was remitted by the petitioner during the pendency of this writ petition. According to the counsel for the respondents, the balance outstanding in the loan account is more than Rs.1.60 crores. 5. The prayer made in this writ petition is to quash Exts.P6 and P7 notices issued by the 2nd respondent. I find that the petitioner is a chronic defaulter and there was no bona fide -3- W.P.(C).No.4501/2006 attempt on his side to remit the amounts due. I do not find any reason to interfere with Exts.P6 and P7 notices issued by the 2nd respondent. 6. Considering the fact that the petitioner had availed term loan to run a hospital and till now the hospital is functioning, I am of the view that an opportunity may be given to the petitioner to close the loan account, if the petitioner desires so. Considering the facts and circumstances, I direct the respondents to consider the request of the petitioner for settlement under the OTS guidelines for the year 2004-05 (Circular No.20 dated 23/8/2004). If the petitioner pays an amount of Rs.80/- lakhs (Rupees eighty lakhs) and submits a fresh request for consideration under the OTS scheme within a period of two months from the date of receipt of a copy of this judgment, the respondents shall apply the OTS guidelines for the year 2004-05 (Circular No.20 dated 23/8/2004) and re-fix the amount due. While fixing the amount due under the OTS -4- W.P.(C).No.4501/2006 scheme, the respondents shall take into consideration the payment of Rs.80 lakhs now ordered by this Court. If the petitioner fails to comply with the terms as stated above within the stipulated time, the respondents are free to continue the proceedings initiated by Exts.P6 and P7. Writ Petition is disposed of as above. Sd/- HARUN-UL-RASHID, Judge. kcv.