Rajachar Nataraj vs Fullerton India Credit Co. Ltd on 22 December, 2020

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Karnataka High Court

Rajachar Nataraj vs Fullerton India Credit Co. Ltd on 22 December, 2020

Bench: P.S. Dinesh Kumar

                             1

    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE 22ND DAY OF DECEMBER, 2020

                          BEFORE

      THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR

        WRIT PETITION No.9782 OF 2020 (GM-RES)

BETWEEN :

RAJACHAR NATARAJ
S/O LATE RAJACHARY
AGED 51 YEARS
R/A NO.33/A, 6TH CROSS
MARUTI EXTENSION
GAYATHRI NAGARA
BANGALORE-560 021                             ... PETITIONER

(BY SHRI. A. KESHAVA BHAT, ADVOCATE)

AND :

FULLERTON INDIA CREDIT CO. LTD
2ND FLOOR, BRAHAMANANDA COURT
NO.37, LALBAGH ROAD
BANGALORE-560 027
REPRESENTED BY ITS
AUTHORIZED SIGNATORY                         ... RESPONDENT

(BY SHRI. AMIT DESHPANDE, HCGP)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER
DATED 02.03.2020 IN C.MISC NO.1183/2020 PASSED BY THE VII
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BANGALORE
(ANNEUXRE-A) AND ETC

     THIS WRIT PETITION, HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 02.12.2020, COMING ON FOR PRONOUNCEMENT OF
ORDERS THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:-
                               2

                           ORDER

Petitioner has availed a loan of Rs.62,89,000/- from respondent to run his firm named 'Surya Construction and Engineering'. Respondent issued a Demand notice on May 14, 2019 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short) and Possession Notice dated October 10, 2019. Respondent moved the VII Additional Chief Metropolitan Magistrate, Bangalore under Section 14 of the SARFAESI Act and by his order dated March 2, 2020, the learned Magistrate has directed the jurisdictional police to assist the respondent to evict occupants from the mortgaged property. Petitioner has challenged the same in this writ petition.

2. Shri. Keshava Bhat, learned Advocate for petitioner submitted that petitioner is required to repay the loan in equal installments. It is true that there were certain defaults due to COVID pandemic. However, petitioner has paid all installments up to date. Adverting to Statement of 3 Accounts dated November 12, 2020 (Annexure-F) issued by respondent, Shri. Bhat submitted that there are no dues payable either towards principal or interest. Accordingly, he prayed for allowing this writ petition.

3. Shri. Amit Deshpande, learned Advocate for the respondent submitted that once petitioner's status was declared as an 'NPA', the question of reviving the account does not arise, even though petitioner has paid all installments upto date, 'NPA' status cannot be reversed. He further submitted that once default occurs, petitioner becomes liable to pay the entire amount due as on that date.

4. I have carefully considered rival contentions and perused the records.

5. The Statement of accounts dated November 12, 2020, issued by respondent which is produced as Annexure-F to this writ petition is not disputed by the respondent. It clearly shows that there is no over due 4 interest or principal payable by the petitioner. However, the argument advanced by Shri. Deshpande is, even though petitioner has paid the amount, once an account is declared as 'NPA', it cannot be reversed. But in the facts of this case, it is relevant to note that the respondent has received the over due amounts and issued the Statement of Accounts clearly mentioning that there is no outstanding amount due. COVID pandemic has seriously affected private businessmen. In view of the fact that petitioner has voluntarily paid all dues up to date, in extra-ordinary circumstance of the pandemic, in the opinion of this Court, any further coercive measure to permit respondent to recover the entire balance amount at once would be harsh. Further, respondent having accepted the amount and certifying that there is no over due EMI or interest, is estopped to contend that it desires to recover the entire amount at once. As per the agreement, petitioner still has time to pay further EMIs.

6. In view of the above, this petition merits consideration. Hence, the following:

ORDER

(a) Writ Petition is allowed.

(b) Order dated March 2, 2020 in C.Misc.

No.1183/2020 passed by the VII Additional Chief Metropolitan Magistrate, Bangalore vide Annexure-A is quashed.

(c) The respondent has already regularized the account of petitioner. Hence, prayer clause (b) does not survive for consideration.

No costs.

Sd/-

JUDGE SPS

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