Puliyilethu Distributors vs Authorised Officer, South Indian Bank Ltd

C.S Dias, J

The writ petition is filed to direct the respondent to permit the petitioner to pay off the entire overdue amount in fifteen equated monthly instalments.

The petitioner’s case is that they had availed cash credit facility from the respondent – Bank – for an amount of Rs.5,03,49,484/-, by creating an equitable mortgage. The petitioner could not pay the instalments on time. The respondent has now initiated proceedings against the secured asset under Sec.13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (in short, ‘Act’). The petitioner is ready and willing to pay off the entire overdue amount in equated monthly instalments. Hence, the writ petition.

The learned counsel appearing for the respondent has filed a statement, inter alia, contending that the writ petition is not maintainable in view of the law laid down by the Hon’ble Supreme Court in Phoenix ARC Pvt. Ltd vs. Vishwa Bharati Vidya Mandir and others [2022 (5)SCC 345]. In addition to the same, the loan account has been classified as Non-Performing Asset as early as on 25.2.2022. The Bank had sanctioned a manual TOD, which was disallowed by the statutory auditors. Though the petitioner remitted the overdue amounts subsequently, the statutory auditors did not permit the upgradation of the account and directed the respondent to classify the account as Non-Performing Asset. The statutory auditors also held that the account was continuously overdrawn, interest was not being serviced and there was stock failure. Hence the petitioner’s request for regularising the loan account cannot be permitted by the respondent. Therefore, the writ petition may be dismissed.

Heard; Sri.George Cherian, the learned Senior Counsel appearing for the petitioner and Sri.Mohan Jacob George, the learned counsel appearing for the respondent.

The Hon’ble Supreme Court in South Indian Bank Ltd vs. Naveen Mathew Philip (2023 LiveLaw (SC) 320), after adverting to a myriad of earlier judicial pronouncements rendered under the Act, has categorically declared that High Courts shall not, unless in extra ordinary circumstances, interfere with proceedings initiated under the Act, in writ proceedings under Article 226 of the Constitution of India.

Having considered the pleadings and materials on record and taking note of the stand taken by the respondent, I am of the definite view that it is not a fit case to entertain the writ petition by invoking the plenary powers of this Court under Article 226 of the Constitution of India. Nonetheless, it would be up to the petitioner to invoke his statutory remedies under the Act.

Resultantly, without prejudice to the right of the petitioner to work out its remedies in accordance with law, the writ petition is dismissed.