Kerala High Court: Raja Vijayaraghavan V., J., disposed of this writ petition filed under Article 226 of the Constitution of India.

The petitioner here is the accused in the suit filed under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner took a loan from the Co-operative Urban Bank Ltd (Respondent 1). The petitioner committed some default in the re-payment, hence the initial suit was filed under SARFAESI. The present petition is against the measures initiated under SARFAESI for recovery of the loan amount by the Bank. This Act enables the secured creditors to take possession of the securities of the defaulters, without any intervention of the Court and also alternatively to authorize any Securitization or Reconstruction Company to acquire financial assets of any Bank or Financial Institutions. 

The counsel for the petitioner, K.V. Anil Kumar, contended that default was committed because of some reasons beyond the control of the petitioner. The only prayer of the petitioner is that some time may be granted so that he can clear all the arrears and regularize his account in the bank.

The counsel for the respondent, Deepa Arun V., contended that the bank is only interested in realizing the arrears amounting to Rs 9,23,000, expeditiously. 

The Court referred to the judgments of the Supreme Court- Union Bank of India v. Stayawati Tandon, (2010) 8 SCC 110 and State Bank of Travancore v. Mathew K.C., 2018 (1) KLT 784. The judgment in the above-mentioned case was that, where any alternate remedy is available, the petition under Article 226  should not be entertained by the High Court. Section 17 of the SARFAESI Act provides for the right to appeal. It enumerates that any person who is aggrieved by the measures referred in Section 13(4) of the Act shall make an application to the Debt Recovery Tribunal within 45 days from the date on which measures have been taken. Though the rule of exhaustion of alternate remedy is a rule of discretion and not one of compulsion.

The Court held that it will be indulging for the last and final time as the respondents are also agreeable for an opportunity to salvage the property of the petitioner. Further, the Court directed the petitioner to deposit the total arrears in easy installments divided into 10 equal and monthly installments starting from 15-01-2020. Only after compliance with the said order, the bank account was supposed to be regularized. It was directed that the petitioner has to simultaneously pay regular EMIs without any default. In case of non- compliance on behalf of the petitioner, the benefit granted by this Court would stand vacated and the Bank will be entitled to proceed to recover the loan amount through the procedure stated in the SARFAESI Act. [Abdul Salam v. General Manager, Co-operative Urban Bank Ltd., 2019 SCC OnLine Ker 5762, decided on 27-12-2019]

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