Liji.N.Nair vs. State Bank Of INDIA
Facts
The petitioner, Liji.N.Nair, proprietor of A and A Associates, filed a writ petition seeking regularization of loan facilities availed from the State Bank of India. The respondent bank, through its authorized officer and manager, submitted that out of two loan accounts, only the Term Loan could be regularized, while the Cash Credit facility required full payment. As of August 2, 2019, the overdue amount in the Term Loan was Rs. 1,96,761, and the total outstanding in the Cash Credit was Rs. 8,52,044. The bank offered to regularize the Term Loan and close the Cash Credit if the petitioner paid these amounts along with applicable charges and interest in not more than 10 equal monthly installments. The petitioner accepted this offer.
Held
The Court directed the petitioner to pay a total of Rs. 10,48,805, representing the sum of the overdue in the Term Loan and the outstanding in the Cash Credit, along with all applicable charges and interest. This payment is to be made in 10 equal monthly installments, commencing from September 6, 2019. Upon successful completion of these payments, the Cash Credit facility will be closed, and the Term Loan will be regularized at the end of the installment period. The petitioner is also obligated to continue paying the regular Equated Monthly Installments (EMIs) for the Term Loan as they fall due. The Court emphasized that these directions are peremptory and any default in payment would vacate the benefits granted, allowing the bank to recover the entire liability. No further requests for extension or modification will be permitted except in exceptional circumstances.
Key Issues
1. Whether the Court has the power to direct the regularization of loan facilities and the closure of loan accounts based on a settlement between the petitioner and the respondent bank, and if so, under what terms? The petitioner argued that the writ petition should be ordered on the terms proposed by the respondent bank, which involved a payment plan for the outstanding amounts. The respondent bank argued that only the Term Loan could be regularized, and the Cash Credit facility needed to be paid off in full. They proposed a specific payment schedule and amount for the petitioner to comply with to achieve this outcome. The bank's submission formed the basis of the court's directions.
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN FRIDAY, THE 02ND DAY OF AUGUST 2019 / 11TH SRAVANA, 1941 WP(C).No.21155 OF 2019(T) PETITIONER: LIJI.N.NAIR AGED 49 YEARS W/O.AGIKUMAR, PROPRIETOR OF A AND A ASSOCIATES, VI/435, VADAKKUKAD, PALLATHERY.P.O, PALAKKAD BY ADV. SRI.V.A.JOHNSON (VARIKKAPPALLIL) RESPONDENTS: 1 STATE BANK OF INDIA RETAIL ASSET SMALL AND MEDIUM ENTERPRISES, CENTRE(RASMEC), S.B.I.BUILDINGS, ENGLISH CHURCH ROAD, PALAKKAD-678001, REP BY ITS AUTHORIZED OFFICER 2 STATE BANK OF INDIA, KANJIKODE BRANCH, KANJIKODE, PALAKKAD-678621 REP BY ITS MANAGER BY ADVS. SRI.GEORGE THOMAS (MEVADA)(SR.) SRI.AMAL GEORGE, SC, SBI THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No.21155 OF 2019(T) 2 JUDGMENT The petitioner prays that certain loan facilities availed of by her from the respondent – Bank, be directed to be regularized.
However, Sri.Amal George, learned Standing Counsel for the respondent - Bank, submits that out of the two loan accounts availed of by the petitioner, only the Term Loan can be regularized; while the Cash Credit facility wil
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