IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 22ND OCTOBER 2010 / 30TH ASWINA 1932 WP(C).No. 10548 of 2010(P) --------------------------------------- CRMP.827/2010 of CHIEF JUDICIAL MAGISTRATE COURT, THRISSUR .................... PETITIONER(S): ---------------------- 1. ROY JOSE, S/O.K. JOSE, KUTTUKKARAN VEEDU, KUTTANELLUR P.O., THRISSUR. 2. SHEENA ROY, W/O.ROY, KUTTUKKARAN VEEDU, KUTTANELLUR P.O., THRISSUR. BY ADV. SRI.JIJO PAUL RESPONDENT(S): -------------------------- 1. STATE BANK OF INDIA, RETAIL ASSETS SMALL AND MEDIUM CITY CREDIT CENTRE, 2ND FLOOR, MAHESWARI BUILDING, M.G.ROAD, THRISSUR, REP.BY AUTHORISED OFFICER AND ASSISTANT MANAGER. 2. THE AUTHORISED OFFICER, STATE BANK OF INDIA, RETAIL ASSESTS SMALL AND MEDIUM CITY CREDIT CENTRE, 2ND FLOOR, MAHESWARI BUILDING, M.G. ROAD, THRISSUR. R1 & R2 BY ADV. SRI.K.K.CHANDRAN PILLAI, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/10/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.10548 of 2010 ------------------------------------------- Dated this the 22nd day of October, 2010 J U D G M E N T ---------------------- The petitioners are challenging the proceedings initiated by the respondents under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioners are husband and wife. They availed a Housing Loan from the respondents to the tune of Rs.4,50,000/-, during the year 2005. The proceedings in question was initiated consequent to default committed in effecting regular payment of the monthly instalments. Respondent Bank had invoked Section 14(1) by approaching the Chief Judicial Magistrate Court. An Advocate Commissioner was appointed to take over possession of the immovable property, which is the secured asset as far as the loan transaction is concerned. Ext.P3 is the notice issued by the Advocate Commissioner requesting the petitioner to hand over possession of the property. 2. Even though the petitioner has not resorted to the remedy provided under the statute against the proceedings initiated under the SARFAESI Act, as a gesture of indulgence, this court ordered to maintain status quo with respect to the W.P.(C).10548/10-P -2- property subject to condition of the petitioners remitting a sum of Rs.75,000/-, within three weeks from 31.3.2010 and a further sum of Rs.75,000/- within three weeks thereafter. The petitioners had complied with the conditions stipulated. Thereafter, on the basis of further orders issued by this court a further sum of Rs.1,00,000/- was also paid. Accordingly it is revealed that the petitioners had effected a total payment of Rs.2,50,000/- after filing this writ petition. 3. In a statement filed on behalf of the respondent Bank, it is mentioned that there is a total outstanding balance of Rs.4,86,451/- as on 3.7.2010. It is evident that after 3.7.2010 a further sum of Rs.1,00,000/- was also paid. 4. Eventhough various grounds are raised challenging the proceedings initiated under the SARFAESI Act, learned counsel for the petitioners sought for interference of this court only in permitting the petitioners to continue payment of future instalments in accordance with the original schedule of repayment, on the premise that the loan account in question now stands regularised. It is pointed out that the repayment period of the loan is for 15 years, which will expire only in the year 2024. It is further pointed out that in terms of the Master Circular of the Reserve Bank of India No:RBI9/10-39/DB OD once W.P.(C).10548/10-P -3- the amount in default is cleared payment the Bank is at an obligation to re-classify the account as a 'performing asset'. Therefore the petitioners are seeking direction for effecting regularisation and continuance in payment of the future instalments. 5. The above prayer is opposed by the learned standing counsel for respondents, on the basis that the proceedings initiated under the SARFAESI Act is at its fag end and the Advocate Commissioner is attempting to take over possession of the property. It is stated that when the Advocate Commissioner had visited the property in question the petitioners have undertaken to remit the entire balance within three weeks and it was also noticed by him that the residential building situated therein was occupied by some third parties and some additional constructions are also going on. On that basis it is stated that the petitioners had unauthorisedly transferred the property to somebody. However, in a reply affidavit filed by the petitioners the above allegations were refuted. Copy of encumbrance certificate was produced as Ext.P4 in order to specify that no transfer with respect to the property was effected by registering any documents. However, it is admitted that some constructions are going on and according to the petitioners such constructions W.P.(C).10548/10-P -4- were were effected only to give a face lift to the building for the purpose of obtaining higher price. It is mentioned by the learned counsel for the petitioner that the petitioners are attempting to sell off the property for the purpose of clearing payment of the entire balance. It is contended that since payments in the loan account now stands regularised, they may be permitted to continue payment of future instalments in accordance with the original schedule. 6. Having considered the rival contentions as stated above, and the facts and circumstances attendant in this case, I am of the opinion that the petitioners can be permitted to continue payment of future instalments in accordance with the original schedule of repayment, if the defaulted amount in the loan account has been cleared payment. 7. Under the above circumstances the writ petition is disposed of directing the respondents to keep in abeyance further coercive steps for dispossession and sale of the property, provided the petitioner makes payment of balance if any outstanding with respect to the defaulted instalments along with interest and expenses if any due, within a period of two weeks from today and continues payment of the of monthly instalments without any default, in accordance with the original schedule of W.P.(C).10548/10-P -5- repayment. Needless to say that the petitioner shall be furnished with statement regarding the outstanding balance as and when approached within the time stipulated above. 8. It is made clear that on the event of default in payment of any one of the monthly instalment in future, the respondents will be free to proceed with further steps pursuant to the orders already issued by the Chief Judicial Magistrate Court. Relief is granted subject to the condition that the petitioner is prevented from raising any subsequent challenge against the proceedings. C.K.ABDUL REHIM, JUDGE. okb