IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 17TH MARCH 2011 / 26TH PHALGUNA 1932 WP(C).No. 7806 of 2011(A) -------------------------------- PETITIONER(S): ------------------- GIGY MATHEW, D/O. JOSEPH VARGHESE, KOLADY HOUSE, CHEMPLAVU.P.O., CHERPONKAL, PALA, KOTTAYAM DISTRICT. PIN-686584. BY ADVS. SRI.MOHAN JACOB GEORGE SMT.P.V.PARVATHI SMT.REENA THOMAS SRI.L.RAM MOHAN RESPONDENT(S): -------------------- 1. AUTHORIZED OFFICER, UCO BANK, CYRILLS TOWER. STATION ROAD, NEAR COLLECTORATE, KOTTAYAM. PIN-686001. 2. UCO BANK, KOTTAYAM BRANCH, REPRESENTED BY ITS MANAGER. BY ADV. SRI.GEORGE KARITHANAM VARGHESE,SC,UCO BANK THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs C.K.ABDUL REHIM, J --------------------------------------- W.P(C) No.7806 of 2011-A ---------------------------------------- Dated this the 17th day of March, 2011. J U D G M E N T Consequent to default committed in repayment of a term loan availed by the petitioner from the respondent Bank, proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was initiated. On receipt of Ext.P1 notice of demand issued under Section 13(2), the petitioner filed objections claiming that the property in question is an agricultural land, which is exempted from the purview of the SARFAESI Act. After considering the matter as contemplated under Section 13 (3A), the Bank had issued Ext.P6 reply in which the claim was specifically rejected, for the reason that in the loan application itself the petitioner had described the nature of the property as commercial land. It is noticed that the petitioner has got an effective remedy under Section 17(1), if any further steps are proceeded against under Section 13(4). W.P(C) No.7806 of 2011-A 2 2. However, learned counsel for the petitioner made an appeal to this Court to permit regularisation of the account, on the basis of an undertaking that the petitioner is relinquishing all challenges raised against the proceedings and that she is not intending to pursue any statutory remedy. The above request is made especially on the ground that the loan in question was availed only in the year 2007 and the repayment period will expire only in the year 2015. 3. Heard; counsel appearing for the respondent Bank. It is stated that the Bank had already filed a civil suit claiming the amounts due and the said suit is being pursued. Under such circumstances, the Bank is not favouring in permitting regularisation of the account. 4. Eventhough, considering the effective alternative remedy available, it is not justified on the part of this Court to interdict with the proceedings, the limited prayer for regularisation can be considered. In view of the relinquishment of challenges and also in view of the fact W.P(C) No.7806 of 2011-A 3 that the term of the loan will expire only in the year 2015, I am inclined to permit the petitioner to regularise the account. This is especially in view of the fact that the terms of the guidelines issued by the Reserve Bank of India, which is having statutory force, insist the creditor to re-classify the debt as 'performing asset', as and when the default is cleared payment. 5. In the result, the writ petition is disposed of directing the respondents to restrain from proceeding with any further steps against the secured asset, subject to condition of the petitioner remitting the entire amount overdue for payment (defaulted monthly instalments along with interest and expenses if any due) in 4 (four) equal monthly instalments, falling due on or before 31.3.2011 and on or before the last day of succeeding months, along with payment of regular monthly instalments due for the respective months. 6. If payments of defaulted amounts is regularised as directed above, the respondents shall permit the petitioner W.P(C) No.7806 of 2011-A 4 to continue payment of the future instalments in terms of the original schedule. 7. It is made clear that on the event of default in payment of any one of the instalments, the respondents will be free to proceed with further steps. It is further made clear that the above relief is granted subject to the condition that the petitioner is precluded from raising any subsequent challenge against such proceedings. C.K.ABDUL REHIM JUDGE ab