Facts of the Case

Shini Raju, represented through a power-of-attorney holder, filed a writ petition before the Kerala High Court against the State Bank of India after the Bank initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to take physical possession of secured property mortgaged against a cash credit facility.

The petitioner and her husband had availed the cash credit facility by creating an equitable mortgage of title deeds, but had defaulted on instalments due to circumstances beyond their control; the Bank issued a possession notice under Section 13(2) of the SARFAESI Act.

The petitioner sought permission to clear the outstanding amount (Rs.25,39,027 as of 16.06.2023) in equated monthly instalments and close the loan account, rather than face enforcement.

The matter was heard and decided on 27.07.2023.

Issues Involved

  1. Whether the Bank's SARFAESI enforcement proceedings should be deferred to allow the petitioner to repay the outstanding amount in instalments.

Petitioner's Arguments

  • The petitioner submitted she was ready and willing to pay the outstanding amount in equated monthly instalments to close the loan account and avert dispossession of the mortgaged property.

Respondent's Arguments

  • The Bank's counsel, on instructions, confirmed the outstanding amount as Rs.25,39,027 as on 16.06.2023, and stated the Bank was willing to permit repayment in ten equated monthly instalments.

Court Order / Findings

  • Recording the consensus reached between the parties, the Court exercised its Article 226 jurisdiction to grant the petitioner 'one last opportunity' to clear her liability.
  • It directed the Bank to defer further coercive SARFAESI proceedings to enable repayment in ten equated monthly instalments commencing 27.08.2023, with future interest and costs, failing which the petitioner would lose the benefit of the order and the Bank could resume recovery from the stage it then stood.
  • The Court made clear that no further application for modification or extension of time would be entertained.

Important Clarification

This is a banking/SARFAESI recovery matter resolved by consent on an instalment repayment plan; it has no connection to GST law. The petitioner's old GST registration certificate appears only as one supporting exhibit, unrelated to the core dispute.

Sections Involved

  • Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 13(2) (possession notice)
  • Constitution of India, 1950 – Article 226

Decision – In Favour of

The writ petition was disposed of on terms broadly favourable to the petitioner-borrower, Shini Raju, by deferring coercive recovery action to allow an instalment repayment plan; the underlying debt itself was not disputed or reduced.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No. 19539 of 2023
  • Coram: Justice C.S.Dias
  • Date: 27th July, 2023

Link to Download the Order

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