The petitioner is aggrieved by the SARFAESI proceedings initiated against the petitioner for default committed in repayment of Term Loan facility availed of by the petitioner. The petitioner's contention is that for reason of the Term Loan facility having been defaulted, the Bank is proceeding with the recovery of the Cash Credit facility also.
2. The learned counsel appearing for the respondent Bank, however, submits that though payments towards the Cash Credit facility is regular, recovery proceedings are to be initiated against both the Cash Credit facility and the Term Loan as per the Reserve Bank of India Regulations. The Regulations of RBI prescribe that all loans availed of by a borrower is to be foreclosed, if any of the loans availed is declared as NPA and hence, the Cash Credit loan has also been proceeded against, is the argument.
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3. In the context of the averments made in the writ petition regarding the impecunious circumstance as also the submission of the learned Standing Counsel appearing for the Bank that the Cash Credit facility is regular; if the entire arrears in the Term Loan account are paid the Bank could consider regularisation of the Term Loan. Accordingly, the following orders are issued:
4. The proceedings for taking actual possession of the secured asset shall be kept in abeyance on condition of the petitioner paying an amount of Rs.2,00,000/- (Rupees two lakhs only) on or before 15.07.2014 and settling the entire loan in ten equal monthly instalments thereafter; the due date of instalments falling on the 15th of each succeeding month. The petitioner shall also remit the regular payments of EMIs of the Term Loan account on its due dates. In the event of the petitioner satisfying the entire arrears/default in the Term Loan account along with the regular payment of EMIs on the respective due dates, then there shall be a WP(C).No.14913 of 2014 - 3 -
direction to the respondent-Bank to regularize the Term Loan loan account and permit the petitioner to pay the equated monthly installments as per the original agreement. If any arrears exist in the Cash Credit facility, the same also shall be cleared in the period aforesaid. The recovery proceedings shall stand closed for the present on the satisfaction of the arrears and also on regular EMIs being paid. If two consecutive defaults are committed during the instalment period, granted by this Court, the Bank shall be entitled to revive and proceed with the recovery proceedings initiated.
The writ petition stands disposed of as above. No costs.
vku.
Sd/- K.Vinod Chandran, Judge ( true copy )