Kerala High Court
Baiju Chandran vs Kerala Financial Corporation on 19 November, 2025
Author: V.G.Arun
Bench: V.G.Arun
W.P.(C).No.40084/25
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2025:KER:88990
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
WEDNESDAY, THE 19TH DAY OF NOVEMBER 2025 / 28TH KARTHIKA, 1947
WP(C) NO. 40084 OF 2025
PETITIONER:
BAIJU CHANDRAN
AGED 56 YEARS
PARTNER, CHAND V MOVIES, NENMANIKKARA, AMBALLUR,
PUDUKKAD , TRICHUR 680 301 RESIDING AT
NELLIKKATHARA HOUSE , KAIPAMANGLAM .P.O. TRICHUR,
PIN - 680681
BY ADVS.
SHRI.T.M.CHANDRAN
SRI.S.SUJITH
SRI.JOSEPH ALBIN NEDUNTHALLY
RESPONDENTS:
1 KERALA FINANCIAL CORPORATION
SARB-CENTRAL ZONE, 5TH FLOOR, FINANCE TOWER,
KALUR, ERNAKULAM, REPRESENTED BY BRANCH MANAGER
(HEAD SARB CZ),
PIN - 682017
2 KERALA FINANCIAL CORPORATION
SMART CENTRE BUILDING, SECOND FLOOR KOKKALA,
TRICHUR. REPRESENTED BY ITS MANAGER,
PIN - 682021
W.P.(C).No.40084/25
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3 THE DISTRICT COLLECTOR
CIVIL STATION, AYYANTHOLE, TRICHUR, PIN - 680003
4 THE DEPUTY TAHSILDAR (RR)
KERALA FINANCIAL CORPORATION,SARB- CENTRAL,
FINANCE TOWER, KALUR, ERNAKULAM, PIN - 682017
BY ADVS.
SHRI.M.R.VENUGOPAL, SC, KFC
SMT.DHANYA P.ASHOKAN (SR.)
SRI.S. MUHAMMAD ALIKHAN
SMT.ANJANA S. RAJ
SMT.GAYATHRI VENUGOPAL
OTHER PRESENT:
SRI. RAJEEV JYOTHISH GEORGE, GP.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 17.11.2025, THE COURT ON 19.11.2025
DELIVERED THE FOLLOWING:
W.P.(C).No.40084/25
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V.G.ARUN, J
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W.P.(C).No.40084 of 2025
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Dated this the 19th day of November, 2025
JUDGMENT
The petitioner is the partner of a Cinema Theatre functioning in the name and style 'Chand V Movies' and is also the proprietor of 'Chand V Regency' hotel at Kaipamangalam in Trichur district. The petitioner availed loans from the 2nd respondent, Kerala Financial Corporation ('the KFC' for short) and defaulted repayment. The KFC therefore initiated recovery measures against the property given as security. Thereupon, the petitioner submitted a request for settling the loan availed for Chand V Movies. Acceding to the request, the 1 st respondent agreed for One Time Settlement (OTS) of the account on payment of Rs.134.81 lakhs under the Special Recovery Drive for Doubtful Loans (SRD) Scheme. As the petitioner failed to pay the amount in accordance within the time stipulated, the KFC demanded further sum of Rs.8,16,217/- towards interest on belated payment. W.P.(C).No.40084/25 4
2025:KER:88990 Thereupon, the petitioner submitted Ext.P1 explaining the reasons for the delay in remitting the installments and seeking waiver of the belated interest portion. The 1st respondent sent Ext.P2 reply making it clear that waiver cannot be granted and directed the petitioner to pay the amount of Rs.8,16,217/- on or before 28-02-2024. The petitioner had availed another loan from the 2nd respondent for Chand V Regency Hotel. Meanwhile, he remitted Rs.19,19,800/- for getting the proposal to settle that loan account under OTS, considered. Upon receiving Ext.P2 letter, the petitioner requested the KFC to deduct the Rs.8,16,217/- claimed towards interest on belated payment from the Rs.19,19,800/- deposited as a condition for consideration of the OTS proposal of the Chand V Regency hotel kept under SARB CZ suspense account by the 1st respondent. The request was not considered. Instead, at the instance of the 1 st respondent, revenue recovery notice demanding a sum of Rs.88,32,533/- was issued. Hence this writ petition.
2. Heard.
3. Learned counsel for the petitioner submitted that the 1 st respondent committed gross illegality by refusing to adjust the belated interest of Rs.8,16,217/- demanded for settling the account of W.P.(C).No.40084/25 5 2025:KER:88990 'Chand V Movies' from the sum of Rs.19,19,800/- deposited for consideration of the OTS proposal for settling the account of 'Chand V Regency'. It is contended that, since the sum of Rs.19,19,800/- is kept in a suspense account, the 1 st respondent is bound to release the amount at the request of the account holder. Referring to the meaning of the word 'suspense account' in Prem & Saharay's Judicial Dictionary of Words and Phrases, it is submitted that a person whose money is held in suspense is entitled to withdraw it any moment he likes, though he neither gets a passbook nor is entitled to draw any cheques or to be paid interest in respect of the amount. Attention is drawn to Ext.R1(b) notice to submit that, the 2 nd respondent had only decided to cancel the OTS facility of 'Chand V Movies', but had not actually cancelled the facility. As such, the demand for additional amount of Rs.8,16,217/- as interest towards belated payment, in spite of the petitioner remitting the entire OTS amount by 30.09.2023 as against the last date fixed as 31.05.2023, is patently illegal. Learned counsel then submitted that the petitioner is ready and willing to pay the amount of Rs.8,16,217/- towards belated interest and the 2 nd respondent may be directed to accept that amount and close the loan account of 'Chand V Movies'.
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4. The learned Senior Counsel appearing for the KFC submitted that a term loan of Rs.2 Crore was sanctioned to the partnership firm M/s.Chand V Movies during 2015-2016. As repayment towards the loan was defaulted the KFC initiated recovery measures. Thereupon, the petitioner requested for One Time Settlement facility to settle the loan account. The KFC approved the petitioner's proposal dated 31/03/2023 for settling the loan account under a One Time Settlement (OTS) scheme and sanctioned under the "Special Recovery Drive for Doubtful Loans" (SRD Scheme) for Rs. 134.81 lakh, as against the actual outstanding amount of Rs.180.32 lakhs as on 31.03.2023 . Even though the OTS amount was to be remitted on or before 31/05/2023, the petitioner remitted only Rs. 18,03,200/-. Subsequently, the Board of the KFC extended the benefit of OTS till 30/09/2023, subject to remittance of the revised amount. The petitioner remitted Rs.59 lakh during this extended period, but the amount was insufficient to settle the account under the SRD Scheme. Hence, Ext.R1(b) OTS cancellation letter dated 31/10/2023 was issued to the petitioner. After receipt of Ext.R1(b), the petitioner remitted Rs.57.78 lakh and considering the sizeable amount remitted, the Board of the KFC extended the time for settlement under the SRD W.P.(C).No.40084/25 7 2025:KER:88990 Scheme up to 31/03/2024, subject to payment of the revised amount. The petitioner remitted Rs.134.81 lakh by 22/12/2023, and was directed to remit Rs.8,16,217/- , being the balance amount as per the revised settlement figure of Rs.1,42,97,417/-. Subsequently, the petitioner, vide letter dated 05/01/2024, requested waiver of Rs.8,16,217/- and sought to settle the account at Rs.1,34,81,200/-. The KFC, after due consideration, informed the petitioner that the request cannot be considered and directed him to remit the balance amount on or before 31/03/2024. As the petitioner failed to remit the balance amount within the deadline of 31/03/2024, the sum of Rs.1,34,81,200/- remitted by him was adjusted towards gross recovery of the loan pertaining to Chand V Movies.
5. The learned Senior Counsel then submitted that the unit M/s. Chand V Regency, which is a proprietorship concern, had availed a loan facility of Rs.148.00 lakh from the KFC. Repayment towards that loan was also defaulted and the petitioner, vide letters dated 23/02/2023 and 16/06/2023, expressed his intention to settle the loan account of 'Chand V Regency,' under the SRD Scheme. To prove the bona fides of his request, the petitioner remitted Rs.19.08 lakh as advance and Rs.11,800/- as processing fee. Thereupon, the W.P.(C).No.40084/25 8 2025:KER:88990 petitioner was granted time up to 30/09/2023 for settling the account. As no further amount was remitted, the OTS was cancelled.
6. The Senior Counsel refuted the averment of the petitioner that he had submitted Ext.P4 requesting to transfer the OTS payment made for Chand V Regency for settling the loan account of Chand V Movies and submitted that Ext.P4 was never served on the KFC. It is contended that remittance made towards one unit cannot be adjusted against another unit, particularly when both accounts are having substantial dues. The expression Suspense Account is used for convenience and does not confer any right on the petitioner to demand adjustment of the amount in one account for settling another loan account.
7. The contention that the KFC could not have demanded further amount of Rs.8,16,217/- as interest towards belated payment cannot be countenanced as payments were not made in accordance with the original OTS schedule or the extended period. The averment that the request to transfer Rs.8,16,217/- from the Suspense Account of Chand V Regency for settling the loan account of Chand V Movies was not considered is based on Ext.P4 letter. Apart from the fact that the KFC is stoutly denying receipt of such a W.P.(C).No.40084/25 9 2025:KER:88990 letter, even if such a letter is received, it is for the KFC to decide whether to make the adjustment, 'Chand V Movies' and 'Chand V Regency' being different entities and both accounts being in default. Therefore, refusal on the part of the KFC to make such adjustment, cannot prompt this Court to interfere by exercising the extraordinary jurisdiction under Article 226 of the Constitution of India.
For the aforementioned reasons, the writ petition is dismissed. It is made clear that, dismissal of the writ petition will not stand in the way of the petitioner approaching the KFC seeking leniency in the matter of settlement of the account of 'Chand V Movies'. If such a request is made, the KFC may take appropriate decision, considering that the petitioner has remitted the OTS amount originally fixed.
Sd/-
V.G.ARUN, JUDGE sj W.P.(C).No.40084/25 10 2025:KER:88990 APPENDIX OF WP(C) 40084/2025 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF REQUEST LETTER DATED 05- 01-2024 SENT BY PETITIONER TO RESPONDENT NO.1 REQUESTING TO WAIVE BELATED INTEREST PORTION Exhibit P2 A TRUE COPY OF THE REPLY DATED 15-02-
2024 SENT BY RESPONDENT NO.1 TO PETITIONER STATING THAT WAIVER OF BELATED INTEREST CANNOT BE GRANTED AND DIRECTED THE PETITIONER TO PAY A SUM OF RS 8,16,217/- ON OR BEFORE 28-02-2024 FOR SETTLING THE LOAN ACCOUNT AND RELEASING THE DOCUMENTS Exhibit P3 TRUE COPY OF JOURNAL VOUCHER DATED 15- 09-2023 ISSUED BY RESPONDENT NO.1 TO THE PETITIONER FOR KEEPING AN AMOUNT OF RS 18,00,000/- IN THE SARB CZ SUSPENSE ACCOUNT OF REFERENCE NO.110246554-CHAND V REGENCY Exhibit P3(a) TRUE COPY OF JOURNAL VOUCHER DATED 15- 09-2023 ISSUED BY RESPONDENT NO.1 TO THE PETITIONER FOR KEEPING AN AMOUNT OF RS1,08,000/- IN THE SARB CZ SUSPENSE ACCOUNT OF REFERENCE NO.110246554-CHAND V REGENCY Exhibit P3(b) TRUE COPY OF JOURNAL VOUCHER DATED 15- 09-2023 ISSUED BY RESPONDENT NO.1 TO THE PETITIONER FOR KEEPING AN AMOUNT OF RS10,000/- IN THE SARB CZ SUSPENSE ACCOUNT OF REFERENCE NO.110246516 -CHAND V REGENCY W.P.(C).No.40084/25 11 2025:KER:88990 Exhibit P3(c) A TRUE COPY OF JOURNAL VOUCHER DATED 15- 09-2023 ISSUED BY RESPONDENT NO.1 TO THE PETITIONER FOR KEEPING AN AMOUNT OF RS 900/- IN THE SARB CZ SUSPENSE ACCOUNT OF REFERENCE NO.110246553 -CHAND V REGENCY Exhibit P3(d) TRUE COPY OF JOURNAL VOUCHER DATED 15- 09-2023 ISSUED BY RESPONDENT NO.1 TO THE PETITIONER FOR KEEPING AN AMOUNT OF RS 900/- IN THE SARB CZ SUSPENSE ACCOUNT OF REFERENCE NO.110246553 -CHAND V REGENCY Exhibit P4 A TRUE COPY OF THE LETTER DATED 29.03.2024 SENT BY THE PETITIONER TO THE RESPONDENT NO.1 Exhibit P5 A TRUE COPY OF THE REVENUE RECOVERY NOTICE DATED 29-05-2024 (MAY BE A MISTAKE FOR 29-05-2025) SENT BY RESPONDENT NO.1 TO THE PETITIONER DEMANDING A SUM OF RS 88,32,533/- TO CLOSE THE LOAN ACCOUNT Exhibit P6 A TRUE PHOTOCOPY OF THE STATEMENT DATED 18-10-2025 GIVEN BY THE RESPONDENT NO.1 ON THE REQUEST OF THE PETITIONER SHOWING THE DETAILS OF PAYMENTS MADE BY PETITIONER Exhibit P7 A TRUE COPY OF THE PROVISIONAL STATEMENT OF ACCOUNT UP TO JUNE 2025 FURNISHED BY THE RESPONDENT NO.1 TO THE PETITIONER Exhibit P8 A TRUE COPY OF THE STATEMENT FURNISHED BY THE RESPONDENT NO.1 TO PETITIONER SHOWING CREDIT OF THE AMOUNT OF RS 10 , 00,000/- ON 30-03-2024 TO THE LOAN ACCOUNT OF CHAND V REGENCY FROM THE AMOUNT OF RS 19,19,800/-, KEPT UNDER SARB CZ SUSPENSE ACCOUNT Exhibit P9 A TRUE PHOTOCOPY OF THE NOTICE DATED 12- 08-2025 ISSUED BY THE RESPONDENT NO.4 TO THE PETITIONER W.P.(C).No.40084/25 12 2025:KER:88990 Exhibit P10 A TRUE COPY OF THE NOTICE DATED 14-10- 2025 ISSUED BY RESPONDENT NO.4 ON THE PETITIONER THREATENING SALE OF SECURED AND UNSECURED PROPERTIES RESPONDENT EXHIBITS Exhibit R1(b) True copy of the OTS cancellation letter dated 31/10/2023 Exhibit R1(c) True copy of the extension letter dated 27/12/2023 Exhibit R1(d) True copy of the letter dated 23/02/2023 submitted by the petitioner Exhibit R1(e) True copy of the letter dated 16/06/2023 submitted by the petitioner Exhibit R1(f) True copy of the OTS application dated nil under the SRD Scheme August 2023 submitted by the petitioner Exhibit R1(g) True copy of the extension letter dated 07/03/2024 issued by the Corporation Exhibit R1(a) True copy of the OTS sanction letter dated 03/04/2023 issued by the 2nd respondent