Leneesh M. Paul v. South Indian Bank

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE GOPINATH P.** **THURSDAY, THE 19[TH] DAY OF JANUARY 2023 / 29TH POUSHA, 1944** **WP(C) NO. 41661 OF 2022** ## **PETITIONER:** LENEESH.M.PAUL AGED 39 YEARS HOUSE NO.47/88, MECHERY HOUSE YUVADHARA STREET, ANCHERY, THRISSUR., PIN - 680006 BY ADVS. C.A.ANOOP R.KRISHNA VANESHA VISWAMBARAN ## **RESPONDENTS:** 1 SOUTH INDIAN BANK REPRESENTED BY ITS MANAGER, REGIONAL OFFICE, THRISSUR., PIN - 680006 2 THE MANAGER SOUTH INDIAN BANK LTD.,REGIONAL OFFICE THRISSUR., PIN - 680006 BY ADVS. SUNIL SHANKER VIDYA GANGADHARAN(K/000424/2020) SANDHRA.S(K/001610/2021) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.41661/2022 -2- ## **J U D G M E N T** Petitioner availed a cash credit facility from the respondent bank. On default being committed, proceedings have been initiated against the petitioner to recover the amounts due from the petitioner. The proceedings are at the stage where the bank has issued redemption notice under Section 13 (8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as the Securitisation Act). The outstanding amount in cash credit loan availed by the petitioner as on 15-01-2023 is stated to be Rs.9,79,152.67. 2. The learned counsel for the petitioner submits that the petitioner may be permitted to clear the liability in installments. 3. The learned counsel for the respondent bank would submit that the writ petition is not maintainable before this court in the light of the judgment of the Supreme Court in _**Phoenix Arc Private Limited v. Vishwa Barati Vidya Mandir**_ (Civil Appeal Nos.257-259/2022 dated 12-01-2022), _**United bank of India v. Satyavati Tandon and others**_ ; _AIR 2010 SC 3413_ and _**Authorised Officer, State Bank of Travancore v. K.C. Mathew**_ ; _(2018) 3 SCC 85_ . It is submitted that if the petitioner is aggrieved by any of the proceedings initiated by the respondent bank, it is for the petitioner to approach the Tribunal by filing a securitization application under Section 17 of the SARFAESI Act. 4. The learned counsel appearing for the petitioner in reply would submit that that the petitioner is not disputing the liability and is not challenging the proceedings initiated under the SARFAESI Act on merits. It is submitted that in such circumstances, going by the judgment of a Division Bench of this court in _**Sundaram BNP Paribas Home Finance Ltd. v. Nisha; 2016 (1) KHC 167,**_ W.P (C) No.41661/2022 -3- it is open to the petitioner to seek some accommodation to clear the liability in installments. 5. Having heard the learned counsel for the petitioner and the learned Standing Counsel for the respondent bank, I am of the opinion that since the petitioner is not challenging the proceedings initiated by the respondent bank and is only seeking some installments to clear the liability, the decisions cited at the bar by the learned counsel for the respondent bank which indicate that the writ petition is not maintainable in matters arising under the SARFAESI Act may not strictly apply. Those cases are cases where proceedings have been challenged on merits. In such a situation the remedy of borrower can only be to approach the Tribunal under Section 17 of the SARFAESI Act. However, _**Sundaram BNP Paribas Home Finance Ltd (supra)**_ a Division Bench of this court after noticing the judgment of the Supreme Court in _**Satyavati Tandon and others (supra)**_ as well as certain other judgments, held as follows; _“3. The appellant, aggrieved by the said direction, has come up in the writ appeal. Adv.Sri.C.Varghese Kuriakose, learned counsel for the appellant contended that the learned Single Judge ought not to have exercised jurisdiction under Article 226 of the Constitution of India by interfering in a proceedings under the SARFAESI Act. It is submitted that the Apex Court in United Bank of India v. Satyawati Tondon and Others [2010 KHC 4518] has held that the Supreme Court, in exercise of writ jurisdiction under Article 226 of the Constitution of India, should not interfere in matters under the SARFAESI Act and no such interim order be granted staying the SARFAESI Act. He placed reliance on another judgment of the Apex Court in Devi Ispat Ltd. and another v. State Bank of India and Others [2014 KHC 4262] where the same proposition has been laid down. Another judgment relied upon by the learned counsel for the appellant is Federal Bank Ltd. v. Sagar Thomas [2003 KHC 1206]. He referred to another judgment in Mardia Chemicals v._ W.P (C) No.41661/2022 -4- _Union of India [2004 KHC 584]._ _4. We have considered the submission of the learned counsel for the appellant and perused the records._ _5. It is clear from the judgment of the learned Single Judge as noted above that the learned Single Judge has considered the sole prayer of the petitioner to permit her to remit the balance amount outstanding to the bank in easy instalments. The petitioner thus accepted the liability as disclosed by the bank in the impugned notice. The only indulgence granted by the learned Single Judge was that the amount of Rs.10,55,662/- which was outstanding along with the accrued interest was permitted to be paid in ten equal and successive monthly instalments commencing from 30/11/2015. The said payment was in addition to the regular instalments. Under the second direction, it was directed that in the event the petitioner commits default in respect of any of the instalments, she will loose the benefit of the judgment of the learned Single Judge and the bank was free to continue the recovery proceedings against her from the stage at which it stands at the relevant date. The judgment in Satyawati Tondon (supra), on which strong reliance has been placed by the learned counsel for the appellant was a case where, challenging the proceedings under the SARFAESI Act, a writ petition was filed and this Court had stayed the SARFAESI proceedings. The Apex Court noted the submissions of the parties and the order passed by the High Court by which the High Court had restrained the bank from taking proceedings under the SARFAESI Act with regard to the property of the petitioner. In paragraph 24, the Apex Court laid down the following:_ _“24. There is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression `any person' used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or_ W.P (C) No.41661/2022 -5- _Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute."_ _6. There cannot be any dispute to the proposition laid down by the Apex Court that the High Court, in exercise of jurisdiction under Article 226 of the Constitution of India should not stay the proceedings under the SARFAESI Act and ordinarily the petitioner should be asked to avail statutory remedy provided under Section 17 of the SARFAESI Act. In Satyawati Tondon (supra), the High Court entertained the writ petition and stayed the further proceedings under Section 13(4) of the SARFAESI Act. Present is the case where, although possession notice was sought to be quashed in the prayer made, at the time of hearing, the only prayer pressed was that the petitioner may be permitted to clear the outstanding amount due to the bank in easy instalments. The only indulgence asked for was to grant her some time to_ W.P (C) No.41661/2022 -6- _clear the outstanding amount along with interest accrued together with regular instalments. The learned Single Judge exercised his discretion in granting ten instalments to pay the entire outstanding amount along with interest accrued with regular instalments. The learned Single Judge did not stay the proceedings and, by the 2nd direction, gave liberty to the bank to proceed further from the stage at which it stands at the relevant date, in the event of any single default committed by the petitioner. We are of the view that the interest of the bank was protected by the judgment passed by the learned Single Judge and it cannot be said to be an order by which the proceedings of the bank were either stayed or interfered with._ Therefore, I am inclined to dispose of this writ petition permitting the petitioner to clear the outstanding liability of Rs.9,79,152.67 in twelve (12) equal monthly installments. 6. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire outstanding amount of Rs.9,79,152.67 along with bank charges from the petitioner on the following conditions: - (i) The outstanding amount of Rs.9,79,152.67 together with any accrued interest/costs shall be repaid in twelve (12) equated monthly instalments. - (ii) The first instalment shall be paid on or before 10-02-2023 and subsequent instalments shall be paid on or before 10[th] day of every succeeding month. - (iii) In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law. W.P (C) No.41661/2022 -7- - (iv) In order to enable the petitioner to repay the entire amounts, all coercive proceedings shall be kept in abeyance. The writ petition is disposed of as above. Sd/- **GOPINATH P. JUDGE** AMG W.P (C) No.41661/2022 -8- ## **APPENDIX OF WP(C) 41661/2022** PETITIONER EXHIBITS Exhibit-P1 THE TRUE COPY OF THE BANK STATEMENTS FROM THE YEAR 12/03/2014 TO 13/08/2019 Exhibit- P2 THE TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT BANK DATED 26/10/2022