ASHRAF K vs MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD & ORS

Petitioner availed a term loan from the Malappuram District Co-operative Bank Limited (the bank). He has not remitted the instalments of the

loan as agreed. Consequently, proceedings have been initiated by the bank under the Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (the Act) for realisation of the outstanding in the loan account. The petitioner is aggrieved by the said

proceedings.

Heard the learned counsel for the petitioner as also the learned counsel for the bank.

When the matter was taken up, the learned counsel for the petitioner pointed out that non-payment of the instalments of the loan by the

petitioner was due to reasons beyond his control and not wilful and that if a reasonable time is granted, the petitioner is prepared to liquidate the

overdue in the loan account, so that he can repay the outstanding in the loan account in instalments.

The learned counsel for the bank, on instructions, submitted that a sum of Rs.6,81,385/- is overdue in the loan account.

Having regard to the facts and circumstances of the case as also the orders passed by this Court in similar writ petitions, this writ petition is

disposed of as follows :

(i) The petitioner shall pay the overdue in the loan account with the interest due, in ten equal monthly instalments, of which the first instalment shall

be paid within one month from today. The petitioner shall also pay, in addition, the regular instalments of the loan on the due dates.

(ii) If the petitioner remits the overdue in the loan account as directed above, the bank shall regularise the loan account so as to enable the

petitioner to liquidate the remaining liability in accordance with the terms of the loan.

(iii) Needless to say that if the petitioner liquidates the overdue as directed above, coercive action against the petitioner shall be deferred. It is,

however, made clear that if the petitioner commits default in remitting any one of the instalments as directed, the proceedings initiated against the

petitioner under the Act can be continued.