Anil Kumar P. v Axis Bank & The Authorized Officer, SARFAESI Act, 2002

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE N.NAGARESH`** ``` FRIDAY, THE 5[TH] DAY OF APRIL 2024 / 16TH CHAITHRA, 1946 ``` ## **`WP(C) NO. 8761 OF 2024`** ## **`PETITIONER:`** ``` ANILKUMAR P., AGED 60 YEARS S/O. KESAVAN, PADUKANI (HOUSE), CHAKKALAKUTH NILAMBUR P O, MALAPPURAM, PIN – 679329 ``` ``` BY ADVS. M.S.KIRAN LISHA WILLIAM REMESH KARTHA E.K. ROHITH R. KARTHA ``` ## **`RESPONDENTS:`** ``` 1AXIS BANK, NILAMBUR BRANCH, KEERTHI PADI, BUILDING NO.10/12, AYISHA TOWER, OPPOSITE SREE SUBRAMANYA SWAMY TEMPLE, NILAMBUR, KERALA, PIN - 679329 REPRESENTED BY ITS MANAGER 2THE AUTHORIZED OFFICER, UNDER SARFAESI ACT, 2002,AXIS BANK, PARAYANCHERI, MAVOOR ROAD,KOZHIKODE, PIN – 673016 ``` ``` BY ADVS. MADHU RADHAKRISHNAN NELSON JOSEPH M.D.JOSEPH DEEPAK ASHOK KUMAR ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.04.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) No.8761 of 2024 ``` ``` 2 ``` ## JUDGMENT Dated this the 5[th] day of April, 2024 The petitioner availed a Home Loan of 19,57,635/- for₹ construction of a residential house on 21.12.2017 from the 1[st] respondent-Bank. The total amount sanctioned was ₹33,32,701/-, but the amount disbursed was 22,57,635/-.₹ Out of this ₹22,57,635/-, an amount of ₹2,99,400/- was debited as insurance amount by the Bank. The loan availed by the petitioner was secured by mortgaging 3.23 Ares of land with building constructed in Nilambur Village, Nilambur Taluk in Malappuram District. 2. The petitioner states that he had paid substantial amounts to the loan account initially. But, thereafter, due to Covid-19 pandemic, the petitioner became unable to remit the monthly instalments. Hence, the respondents initiated SARFAESI proceedings against the petitioner. The Bank issued a settlement offer as per Ext.P2. As per Ext.P2, the ``` WP(C) No.8761 of 2024 ``` ``` 3 ``` petitioner has to pay an amount of ₹16,00,000/by 30.11.2023 and balance ₹2,00,000/- by 31.12.2023. The petitioner remitted ₹14,00,000/on 07.11.2023, but unfortunately, he became movement less and was diagnosed as suffering from L45 L5S1 DISC BULGE RIGHT SCIATICA and became bedridden four weeks due to severe pain and was under treatment. The petitioner informed his situation to the 1[st] respondent-Bank. 3. The petitioner submitted that the petitioner when relieved of his aggravated pain struggled a lot and adjusted an amount of 4,00,000/- from his well wishers and relatives.₹ The petitioner approached the Bank on 20.01.2024 and informed the 1[st] respondent-Bank that he is ready with the balance amount and requested them to permit him to remit the amount. But the 1[st] respondent refused to accept the amount as the time of remittance expired on 31.12.2023. The Advocate Commissioner issued notice on 01.02.2024 which was received by the petitioner on 07.02.2024, which directed ``` WP(C) No.8761 of 2024 ``` ``` 4 ``` the petitioner to vacate the premises by 09.02.2024. The petitioner’s representation before the respondents is pending consideration. Now, the petitioner is served with Ext.P8 notice by the Advocate Commissioner directing to vacate the premises by 07.03.2024. The petitioner is ready and willing to pay the balance amount of 4,00,000/- with delayed period₹ interest. 4. The petitioner approached the 1[st] respondent-Bank for availing the settlement of the loan account and paid almost 80% of the settled amount and due to an unfortunate situation, the petitioner was unable to remit the balance amount. Immediately after 50% recovery, he rushed to the Bank after a 20 days delay with the balance amount. Now, the 1[st] respondent-Bank is trying to grab the only residential property of the petitioner due to a delay of 20 days for payment of 4,00,000/-, which is the remaining settlement₹ amount. Hence, the petitioner is before this Court. ``` WP(C) No.8761 of 2024 ``` ``` 5 ``` 5. Standing Counsel entered appearance and resisted the writ petition. On behalf of the respondents, it is submitted that the petitioner has availed a credit facility of 22,57,635/-₹ on 08.03.2017 from the 1[st] respondent. The petitioner was highly irregular in payment towards the credit facility. The petitioner has defaulted the repayment within one year of availing the credit facility. Thus, the account was classified as NPA on 10.12.2018. Further, notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was issued on 30.04.2019 and the loan facility was recalled. The petitioner has not remitted any amount after 2018. 6. The Bank has provided ample opportunities to the petitioner for repayment. Later, when the Bank has proceeded with further measures under the SARFAESI Act 2002, the petitioner requested the Bank for One Time Settlement. As per the request of the petitioner, the Bank has sanctioned Ext.P2 One Time Settlement proposal for an amount of 18₹ ``` WP(C) No.8761 of 2024 ``` ``` 6 ``` lakhs. At that point of time, the total outstanding was ₹39,02,738/-. As per Ext.P2 proposal, the petitioner agreed to remit an amount of 16 lakhs on or before 30.11.2023 and 2₹ ₹ lakhs on or before 30.12.2023. The Bank has waived off maximum interest and also a small margin of principal outstanding. It was informed to the petitioner that in case of default of any one condition, the One Time Settlement proposal will get cancelled. The petitioner remitted only an amount of 14 lakhs and Ext.P2 ₹ One Time Settlement facility was automatically cancelled on 30.11.2023. 7. Thereafter, the Bank has proceeded with SARFAESI measures and the Advocate Commissioner appointed in MC No.633/2023 has issued notice for taking physical possession on 07.03.2024. At this Juncture, the petitioner has filed this writ petition. Now, the total outstanding amount payable by the petitioner is ₹21,43,947 as on 26.03.2024. ``` WP(C) No.8761 of 2024 ``` ``` 7 ``` 8. The petitioner approached the Bank only after two months from expiry of the One Time Settlement facility. At that point of time, there is no One Time Settlement sanction in existence as the earlier sanction was expired. It is true that the petitioner has approached the Legal Services Authority. However, it is false that on instruction of Legal Services Authority, the Bank has not proceeded. The Bank also appeared before the Legal Services Authority and narrated the true facts of the case. 9. Further, the Legal Services Authority, considering the procedures initiated by the respondents in accordance with law, has refused to interfere with the same. Further, the petitioner has assured the 1[st] respondent-Bank that he will submit a fresh One Time Settlement proposal for the balance outstanding amount. On such assurance only the Bank has deferred the taking of physical possession. 10. It is already informed to the petitioner that Ext.P2 One Time Settlement facility was expired on 30.11.2023 itself. ``` WP(C) No.8761 of 2024 ``` ``` 8 ``` Further, as per the assurances, the petitioner failed to submit any fresh One Time Settlement proposal and the 1[st] respondent-Bank was constrained to proceed with further recovery measures by issuing Ext.P8 notice. It is wrong to state that the petitioner approached the Bank in 20 days time for balance One Time Settlement payment. The OTS facility was expired on 30.11.2023 itself and the petitioner has approached the Bank only when the respondents proceeded with physical possession. 11. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondents. 12. It is not in dispute that the 1[st] respondent-Bank has offered a One Time Settlement proposal to the petitioner on 09.11.2023. The settlement was for an amount of 18 lakhs,₹ out of which 16 lakhs ought to have been paid on or before₹ 30.11.2023 and 2 lakhs ought to have been paid on or₹ before 30.12.2023. The petitioner paid ₹14 lakhs on ``` WP(C) No.8761 of 2024 ``` ``` 9 ``` 17.11.2023. The petitioner could not pay the balance amount of 2 lakhs on or before 30.11.2023. ₹ 13. The pleadings in the writ petition would indicate that the petitioner had serious health problems and according to the counsel for the petitioner, the petitioner was motionless during this period. Consequent to which, the amounts could not be raised and paid before 30.11.2023. Subsequently, order was passed by the Bank for taking physical possession of the property. The petitioner thereupon approached this Court and pursuant to the directions of this Court, the petitioner paid the balance amount due to under the One Time Settlement amounting to 4 lakhs on 19.03.2024.₹ 14. The Standing Counsel representing the Bank would argue that as the petitioner did not remit the entire One Time Settlement amount by 30.12.2023, the One Time Settlement has lapsed and this Court in exercise of the powers under Article 226 of the Constitution of India, cannot enlarge the time of One Time Settlement in view of the judgment of the ``` 10 ``` ``` WP(C) No.8761 of 2024 ``` Hon’ble Apex Court in State Bank of India v. Arvindra Electronics Private Limited [(2023) 1 SCC 540]. 15. The pleadings and arguments in the writ petition would, however, indicate that the petitioner has strived to remit the One Time Settlement amount and a substantial major portion of the amount was paid on 17.11.2023 much before the due date. It is the medical condition of the petitioner that caused delay in payment of the subsequent amount. The Hon’ble Apex Court has held in Vijayakumari P. and another v. Indian Bank represented by its Chief Manager [2018 (14) SCC 735] that if the agreed amount stood paid though with some delay, condonation of delay is a possible course of action, if the grounds for delay justified a departure from what was also agreed upon, ie. the right of a Bank to recover the entire dues. 16. In the facts of the case, I am inclined to take a reasonable view in favour of the petitioner to bring a quietus to the dispute. ``` WP(C) No.8761 of 2024 ``` ``` 11 ``` The writ petition is accordingly disposed of directing that if the petitioner remits interest at the rate of 18% for the belated payment of 4 lakhs from the due date of payment₹ under the One Time Settlement agreement within a period of two weeks, the 1[st] respondent-Bank shall treat the account as settled under the One Time Settlement agreement arrived at on 09.11.2023. Sd/- N.NAGARESH JUDGE spk ``` WP(C) No.8761 of 2024 ``` ``` 12 ``` ## **`APPENDIX OF WP(C) 8761/2024`** ## **`PETITIONER EXHIBITS`** ``` Exhibit P1A TRUE COPY OF THE DISBURSEMENT MEMO Exhibit P2A TRUE COPY OF THE COMMUNICATION NO. AXISB2023-2024/2902748DATED 09.11.2023ISSUEDBYTHE1ST RESPONDENT Exhibit P3A TRUE COPY OF THE TRANSACTION DETAILS SHOWING REMITTANCE OF RS.14,00,000/- Exhibit P4A TRUE COPY OF THE MEDICAL REPORTS ON VARIOUS DATES Exhibit P5A TRUE COPY OF THE NOTICE DATED 01.02.2024 ISSUED BY THE ADVOCATE COMMISSIONER Exhibit P6A TRUE COPY OF THE POSTAL COVER DATED 05.02.2024 Exhibit P7A TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 23.02.2024 Exhibit P8A TRUE COPY OF THE NOTICE ISSUED BY ADVOCATE COMMISSIONER DATED 23.02.2024 ```