Kerala High Court
Biju Mathew Abraham vs State Bank Of Travancore on 31 August, 2010
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
FRIDAY, THE 7TH DAYOF OCTOBER 2016/15TH ASWINA, 1938
WP(C).No. 26222 of 2016 (C)
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PETITIONER(S):
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BIJU MATHEW ABRAHAM,
S/O. MATHEW ABRAHAM,
NANAVEETTIL PUTHENPARAMBIL,
KOZHENCHERI EAST P.O.
BY ADVS.SRI.LIJU.V.STEPHEN,
SMT.INDU SUSAN JACOB.
RESPONDENT(S):
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1. STATE BANK OF TRAVANCORE,
(ASSOCIATE OF THE STATE BANK OF INDIA),
KOZHENCHERRY BRANCH, POYANIL PLAZA,
KOZHENCHERRY, REPRESENTED BY ITS
BRANCH MANAGER.
2. AUTHORISED OFFICER,
STATE BANK OF TRAVANCORE,
KOZHENCHERRY BRANCH, PATHANAMTHITTA.
BY ADV. SRI.R.S.KALKURA, SC.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 07-10-2016, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
rs.
WP(C).No. 26222 of 2016 (C)
APPENDIX
PETITIONER'S EXHIBITS:-
EXHIBIT P1 : A TRUE COPY OF NOTICE ISSUED UNDER SECTION 13(2)
OF THE SARFAESI ACT.
EXHIBIT P2 : A TRUE COPY OF NOTICE ISSUED UNDER SECTION 13(4) OF
THE SARFAESI ACT.
RESPONDENT'S EXHIBITS:-
EXT.R1A COPY OF THE APPLICATION FOR LOAN SUBMITTED BY THE
PETITIONER DATED 31/08/2010.
EXT.R1B COPY OF THE LETTER OF THE OF SANCTION DATED 24/09/2010
ISSUED BY THE 1ST RESPONDENT BANK AND ENDORSED BY
THE PETITIONER.
EXT.R1C COPY OF THE AGREEMENT DATED 24/09/2010 EXECUTED BY
THE PETITIONER IN FAVOUR OF THE BANK.
EXT.R1D COPY OF THE DEED OF GUARANTEE DATED 24/09/2010
EXECUTED BY MATHEW ABRAHAM AND ANNAMMA MATHEW
ABRAHAM.
EXT.R1E COPY OF THE AMORTIZATION SCHEDULE ENDORSED BY
THE PETITIONER.
EXT.R1F COPY OF THE BIO-DATA SUBMITTED BY THE PETITIONER AT
THE TIME OF AVAILING THE LOAN TO THE 1ST RESPONDENT
BANK.
EXT.R1G COPY OF THE PERMANENT RESIDENT CARD STANDING IN
THE NAME OF THE PETITIONER SUBMITTED BY THE PETITIONER
AT THE TIME OF AVAILMENT OF LOAN.
EXT.R1H COPY OF THE NEWS REPORT APPEARING IN MANORAMA
DAILY DATED 21/10/2015.
EXT.R1I COPY OF THE AGREEMENT DATED 24/09/2010.
//TRUE COPY//
P.S.TO JUDGE
rs.
A.M. SHAFFIQUE, J.
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W.P.(C) No.26222 of 2016
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Dated this the 7th day of October, 2016
JUDGMENT
Petitioner challenges Exts.P1 and P2. Ext.P1 is a notice issued by the respondent Bank under Section 13 (2) of the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'Act'), by which the petitioner is called upon to remit an amount of 50,12,939/- with future interest, other expenses and costs etc. This is followed by Ext.P2 a notice to take possession of the secured asset.
2. The main contention urged by the petitioner is that issuance of Exts.P1 and P2 is totally without jurisdiction. Reference is made to Section 31 (j) of the Act and it is contended that insofar as the amount due to the Bank is less than 20%, taking into account the principal amount and interest, the Bank is not entitled to take further proceedings under the Act.
W.P.(C) No.26222 of 2016 -2-
3. Counter affidavit has been filed by respondents 1 and 2 objecting to the above contention and it is inter alia contended that once the loan has been recalled, the entire amount become due and the Bank is entitled to enforce the security interest by invoking Section 13 (2) of the Act. Specific reference is made to Section 13 (1) and (2) of the Act. It is submitted that the account of the petitioner had been declared as Non Performing Asset (NPA) as early as on 1.5.2016 and thereafter it shall be open for the Bank to take proceedings under the Act. In regard to the contentions regarding maintainability, it is contended that the petitioner will be entitled to the said benefit only if he had discharged substantial portion of the amount and the balance due would only come to less than 20%.
4. The only question to be considered is whether the petitioner is entitled to the benefit of Section 31 (j) of the Act. Section 31 (j) reads as under:
"31. Provisions of this Act not to apply in certain cases.- The provisions of this Act shall not apply to- W.P.(C) No.26222 of 2016 -3-
(j) any case in which the amount due is less than twenty per cent of the principal amount and interest thereon."
5. Learned counsel for the petitioner submits that the statute had given various benefits to the debtors also as reflected in Section 31 and if the amount due is less than 20%, SARFAESI proceedings cannot be initiated. The amount due according to the learned counsel is the amount ie; outstanding beyond the loan amount which has been granted in favour of the petitioner. In other words, only if the liability exceeds 20% of the loan amount, SARFAESI proceedings can be initiated. Reference is also made to 5th proviso to Section 13 (9) wherein an explanation is given to the amount outstanding in the said section. Clause (b) of the Explanation which reads as under:
"(b) "amount outstanding" shall include principal, interest and any other dues payable by the borrower to the secured creditor in respect of secured asset as per the books of account of the secured creditor."
6. On the other hand, the learned counsel for the respondent Bank submits that the scheme of the Act enables W.P.(C) No.26222 of 2016 -4- the Bank to take SARFAESI proceedings when the account had been declared as NPA and therefore, on a consideration of the scheme of the Act, the amount due as stated in Section 31 (j) is the balance amount due after discharging major portion of the liability, ie; upto 80%.
7. Having heard the learned counsel on either side, I do not think that the contentions urged by the petitioner can be accepted. The words 'amount due is less than 20% of the principal amount and the interest thereon' clearly means the total amount due after discharging the liability upto 80%. There is no ambiguity to the words used in the statute to have a different interpretation. If this interpretation is not given to Section 31 (j), Section 13 (1) and (2) and other measures will become meaningless. There is no legal basis for the contentions urged by the petitioner.
Writ petition is therefore dismissed.
Sd/-
A.M. SHAFFIQUE JUDGE Scl/07.10.2016