Noushad Ottathai and Jaseela Noushad v. Authorized Officer, Housing Development Finance Corporation Ltd, Kannur Branch, and Housing Development Finance Corporation Ltd, represented by its Branch Manager, Kanhangad Branch

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 16[TH] DAY OF JANUARY 2023 / 26TH POUSHA, 1944** **WP(C) NO. 1361 OF 2023** ## **PETITIONERS:** 1 NOUSHAD OTTATHAI, AGED 56 YEARS, SON OF SHADULI, JUNAIDA MANZIL, PARAPPALLI.P.O, AMBALATHARA, PULLUR VILLAGE, HOSDURG TALUK, KASARAGOD DISTRICT-671 531. 2 JASEELA NOUSHAD, AGED 46 YEARS, WIFE OF NOUSHAD OTTATHAI, AGED 56 YEARS, JUNAIDA MANZIL, PARAPPALLI.P.O, AMBALATHARA, PULLUR VILLAGE, HOSDURG TALUK, KASARAGOD DISTRICT-671 531. BY ADVS. A.ARUNKUMAR SACHIN GEORGE ARAMBAN ## **RESPONDENTS:** 1 AUTHORIZED OFFICER, HOUSING DEVELOPMENT FINANCE CORPORATION LTD, KANNUR BRANCH, HIGHWAY ARCADE, THANA, KANNUR – 670 002. 2 HOUSING DEVELOPMENT FINANCE CORPORATION LTD, REPRESENTED BY ITS BRANCH MANAGER, KANHANGAD BRANCH, KASARAGOD DISTRICT-671 315. BY ADVS. S.AMBILY LAKSHMI ANIL(K/002184/2022) K.K.CHANDRAN PILLAI (SR.)(C-41) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 1361 OF 2023 2 ## **JUDGMENT** The petitioners availed two housing loans and two insurance loans from the respondent financial institution. On default being committed, proceedings have been taken against the petitioners under the provisions of the SARFAESI Act and physical possession of the secured asset is scheduled to be taken on 18.01.2023. 2. The learned counsel appearing for the petitioners would submit that the 1[st] petitioner was working abroad and he has now returned owing to loss of his employment. It is submitted that the default occurred only on account of the above and the petitioners may be permitted to clear the overdue amount in instalments. 3. The learned counsel appearing for the respondent financial institution would submit that an Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Kasaragod had proposed to take physical possession of the secured asset in the month of November 2022. It is submitted that at that point of time, the petitioners had executed an undertaking to clear the liability within 15 days after selling the property in question. It is submitted that WP(C) NO. 1361 OF 2023 3 despite the passage of more than two months, the petitioners have not settled the liability and have now filed the present writ petition when the taking of physical possession was scheduled on 18.01.2023. It is submitted that the overdue amount as on today is Rs.17,57,367/-. It is submitted that as per the instructions received from the respondent financial institution, the respondent financial institution is not willing to regularise the loan account and the entire outstanding of nearly Rs.43 lakhs has to be paid by the petitioners. It is submitted that the respondent financial institution has no objection in some instalments being granted to the petitioners provided some substantial payment is made within this month to show bonafides. 4. Having regard to the fact that the loans in question are housing loans and insurance loans(in respect of the housing loans), I am of the view that the petitioners can be given one opportunity to regularise the loan by paying the overdue amount in instalments. Such a direction can be issued taking into consideration of the law laid down by this Court in _**Sundaram BNP Paribas Home Finance Ltd. v. Nisha**_ [2016(1) KHC 167], where it was held:- “ _3. The appellant, aggrieved by the said direction, has come up in the writ appeal. Adv.Sri.C.Varghese_ WP(C) NO. 1361 OF 2023 4 _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. 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_ WP(C) NO. 1361 OF 2023 5 _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 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_ WP(C) NO. 1361 OF 2023 6 _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 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 2[nd] 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_ WP(C) NO. 1361 OF 2023 7 _of the bank were either stayed or interfered with.”_ The Division Bench has considered the judgments of the Supreme Court and has taken the view that where the liability is not disputed and where the borrower is asking only for some accommodation to clear the liability in instalments, such relief can be granted in exercise of jurisdiction under Article 226 of the Constitution of India. 5. Having regard to the circumstances of the case and the situation now prevailing, apart from the submissions made as recorded above, I am of the view that the petitioners can be granted an opportunity to repay the total overdue amount on condition that Rs.3,00,000/- shall be paid on or before 31.01.2023 and the balance amount is paid in 12 equal monthly instalments, the first of which shall be paid on or before 28.02.2023 and thereafter, if the amount so directed is repaid within the time as directed above, to have the loan account regularised. 6. Accordingly, there will be a direction to the respondent financial institution to accept repayment of the entire overdue amount of Rs.17,57,367/-(Rupees seventeen lakhs fifty seven thousand three hundred and sixty seven only) along with any accrued interest, costs and charges from 8 WP(C) NO. 1361 OF 2023 the petitioners and regularise the loan account of the petitioners on the following conditions: - i. The petitioners shall pay a sum of Rs.3,00,000/- (Rupees three lakhs only) on or before 31.01.2023; balance overdue amount along with any accrued interest, costs and charges shall be repaid in 12 equal monthly instalments. - ii. The first instalment shall be paid on or before 28.02.2023 and the subsequent instalments shall be paid on or before the last working day of every succeeding month. - iii. Petitioners shall continue to pay the regular EMI’s along with the instalments directed above. - iv. In the event of default of any one instalment, the respondent financial institution shall be entitled to proceed in accordance with law. - v. In order to enable the petitioners 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** DK WP(C) NO. 1361 OF 2023 9 ## **APPENDIX OF WP(C) 1361/2023** PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE PETITION NUMBERED AS CRL.M.P.NO.1885 OF 2022 ON THE FILES OF CHIEF JUDICIAL MAGISTRATE, KASARAGOD