Kerala Remedies Vs Union of India (Kerala High Court)
This case involves Kerala Remedies contesting coercive proceedings initiated by DCB Bank for the recovery of a financial advance under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioners received a business loan of ₹58 lakhs in 2019 but faced difficulties in repayment due to factors like floods and the COVID-19 pandemic.
The petitioners requested the bank to allow them to repay the overdue amounts in easy monthly instalments, but the bank proceeded with coercive measures instead. The petitioners argued they could clear the dues if given sufficient time.
The bank, however, contested the petitioners’ claims, asserting that they defaulted on repayment despite reminders and requirements to clear the dues. Consequently, the bank initiated coercive proceedings, issuing notices to the petitioners.
During the court proceedings, the bank’s counsel suggested that if the petitioners could make a substantial payment soon and clear the balance overdue amount immediately thereafter, a short breathing time could be granted to settle the dues.
Considering the arguments from both sides, the court decided to dispose of the writ petition by directing the petitioners to remit ₹1 lakh by a specified date and the balance overdue amount in subsequent equal monthly instalments. If the petitioners comply with these directions, the sale of secured assets will be deferred, and coercive proceedings will be halted. However, if the petitioners default on the payments, the bank will be allowed to continue with coercive measures. Additionally, the petitioners are required to pay current EMIs along with the directed payments to avoid further proceedings.
