Kerala High Court
Vijayaraj Pillai vs The Kollam Co-Operative Urban Bank Ltd on 31 May, 2010
Author: P.R.Ramachandra Menon
Bench: P.R.Ramachandra Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 11431 of 2010(D)
1. VIJAYARAJ PILLAI,S/O. P.MADHAVAN
... Petitioner
Vs
1. THE KOLLAM CO-OPERATIVE URBAN BANK LTD.
... Respondent
For Petitioner :SRI.BIJU ABRAHAM
For Respondent :SRI.N.DHARMADAN (SR.)
The Hon'ble MR. Justice P.R.RAMACHANDRA MENON
Dated :31/05/2010
O R D E R
P.R. RAMACHANDRA MENON J.
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W.P. (C) No. 11431 of 2010
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Dated, this the 01st of June, 2010
JUDGMENT
The petitioner had availed a loan of Rs. 8 lakhs from the respondent Bank in March, 2007. But the repayment could not be effected on time, which made a the defaulter, under which circumstances, the Bank proceeded with steps under the SARFAESI Act for realization of the amount due under the loan transaction. The case of the petitioner is that, the Bank has already filed an Arbitration case as ARC No. 518/2008 before the Assistant Registrar of Co- operative Urban Bank and has obtained Ext.P2 Award, aggrieved of which, the petitioner has preferred appeal before the Co-operative Tribunal, Trivandrum and has obtained an interim stay as borne by Ext.P3. The grievance of the petitioner is that, he has complied with the condition imposed by the Tribunal and since the matter is pending before the Tribunal, it is not correct or proper for the Bank to proceed with steps under the SARFAESI Act, which hence is under challenge.
2. The learned counsel appearing for the Bank submits that, the steps taken by the respondent Bank for realization of the amount is strictly in conformity with the relevant provisions of law. True, that an Award has been passed by the concerned Arbitrator and the remedy of the Bank to have the realization of the amount due under the Award is W.P. (C) No. 11431 of 2010 : 2 : something different from the right of the Bank to proceed with SARFAESI Act for realization of the amount due on the basis of the security interest created over the property in question without any involvement of any Court of law. The legal position is squarely covered by the decision rendered by the Apex Court in (M/s Transcore Vs. Union of India)AIR 2007 SC 712.
3. In response to the submissions made from the part of the petitioner for extending the benefit of 'OTS', the learned counsel for the Bank submits, on instruction, that as on date, there is Scheme of OTS. It is also brought to the notice of this Court that, a total sum of Rs. 7,15,657/- is liable to be paid by the petitioner so as to wipe off the entire liability under the loan transaction. It is also stated that, as on date 28.05.2010, a sum of nearly Rs. 4,13,000/- is lying as 'overdue' towards the defaulted installments, and that unless and until the petitioner clears the 'overdue' amount, the question of regularization is not liable to be entertained.
4. Taking note of the facts and circumstances, this Court finds that the petitioner could be given one more opportunity to have the loan account regularized, on condition that, the petitioner satisfies the entire 'overdue' amount by way of 'six' equal monthly installments; the first of which shall be effected on or before the 30th June, 2010 to be followed by the similar installments to be effected on or before the 30th of the W.P. (C) No. 11431 of 2010 : 3 : succeeding months. Subject to this, the coercive proceedings stated as being pursued against the petitioner shall be kept in abeyance. This will be in addition to the petitioner's liability to effect the regular EMIs as well. It is made clear that, if the petitioner commits any default in satisfying the installment as above in respect of the overdue amount, or if two consecutive defaults are made with regard to the regular EMIs, the respondent Bank will be at liberty to proceed against the petitioner for realization of the entire amount in a lump sum, from the stage where it stands now. It is further made clear that, if any OTS benefit is declared and notified in the meanwhile, the petitioner will be at liberty to approach the Bank and the benefit under such Scheme shall be extended to the petitioner as well and this judgment will not be a bar to consider such request, as and when such Scheme is notified.
The Writ Petition is disposed of P. R. RAMACHANDRA MENON, JUDGE kmd