V.K. Noushad vs State Bank of India

A.M. Shaffique, J.—The appellant challenged the proceedings initiated by the respondent Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ''SARFAESI Act''). It appears that the Bank had taken possession of the property of the appellant after issuing notice u/s 13(4) and the property came to be sold on 02.02.2012. However, taking into consideration the fact that the sale was not confirmed and the petitioner had offered to liquidate the entire liability due to the Bank, the learned Single Judge permitted the appellant to pay the entire amount due to the Bank on or before 28.02.2012 and in that event there was a direction to restore the property to the appellant. There was a further direction that if the payment is made by the appellant as above, the sale held on 02.02.2012 shall not be confirmed.

At the time of hearing it is submitted by the learned counsel for the respondent Bank that on account of the delay in confirming the sale, the auction purchaser had already backed out and therefore the bank will have to take fresh steps for conducting sale of the property.

The learned counsel for the appellant submits that the appellant is willing to pay the defaulted amount within a period of two weeks and if an opportunity is given, the balance loan amount shall be paid in terms of the agreement by paying the Equivated Monthly Instalment (for short ''EMI'') on the stipulated dates. After hearing the learned counsel for the appellant and the learned counsel for the Bank, we are of the view that an opportunity can be given to the appellant to pay the outstanding amount to regularise the loan account on the following conditions:

i) that the appellant shall pay the defaulted amount of Rs. 3,50,000/-(Rupees three lakhs fifty thousand only) within two weeks from this date.

ii) the appellant shall also pay the charges incurred by the respondent Bank for initiating SARFAESI proceedings which shall be intimated by the Bank within a period of one week from today and the appellant shall pay the said amount along with the outstanding dues payable within two weeks as stated above.

iii) the appellant shall continue to pay the EMI regularly. On payment of the outstanding amount and the bank charges as stated in (i) and (ii) above, the Bank shall restore the possession of the property to the appellant.

iv) if there is any default in payment of the aforesaid amount or EMI, it is open for the Bank to proceed under the SARFAESI Act in accordance with law.

The Writ Appeal is disposed of as above.