Kerala High Court
K. Sethamma Pillai vs State Bank Of India on 23 May, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 23RD DAY OF MAY 2024 / 2ND JYAISHTA, 1946
WP(C) NO. 16818 OF 2024
PETITIONER:
K. SETHAMMA PILLAI, AGED 75 YEARS
D/O KUNJIKRISHNAN PILLAI, PROPRIETOR
MANNASSERIL AGENCIES,
RESIDING AT MANNASSERIL KIZHAKKETHIL,
NEENDAKARA P.O., KOLLAM, PIN - 691582
BY ADVS.
R.RAJESH (VARKALA)
M.KIRANLAL
MANU RAMACHANDRAN
T.S.SARATH
SAMEER M NAIR
SAILAKSHMI MENON
RESPONDENTS:
1 STATE BANK OF INDIA,
SMEC OFFICE 1ST FLOOR, ARPAN TOWERS,
PRATHIBA JUNCTION, KADAPAKKADA, KOLLAM,
REPRESENTED BY ASSISTANT GENERAL MANAGER - 691008
2 MANAGER, STATE BANK OF INDIA, SAKTHIKULANGARA
OFFICE AT BRANCH PB NO1, ALBICO BUILDINGS,
SAKTHIKULANGARA P.O., KOLLAM, PIN - 691581
3 THE AUTHORIZED OFFICER UNDER SECURITIZATION ACT
STATE BANK OF INDIA OFFICE AT: 1ST FLOOR,
ARPAN TOWERS PRATHIBA JUNCTION, KADAPAKKADA,
KOLLAM, PIN - 691008
REPRESENTED BY ASSISTANT GENERAL MANAGER
SRI.JAWAHAR JOSE
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 23.05.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
WP(C) No.16818 of 2024
2
JUDGMENT
Dated this the 23rd day of May, 2024
The petitioner is a septuagenarian lady Proprietor of a
small MSME enterprise. The petitioner had availed a Cash
Credit facility for an amount of ₹20,00,000/-, which was being
promptly maintained till February, 2024.
2. The petitioner states that she could not pay the
repayment instalments promptly later due to Covid-19
pandemic and due to ill health and family issues. The Bank
proceeded against the petitioner invoking the provisions of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 issuing a Demand
Notice.
3. The petitioner had approached the Bank seeking
the benefit of Master Direction-Lending to Micro, Small and
Medium Enterprises (MSME) Sector of RBI. The said
applications were disregarded and the Bank is illegally,
arbitrarily and improperly proceeding as per the SARFAESI
Act upon the petitioner's sister's residential property.
Proceeding against the petitioner's sister's residential property
will cause irreparable injury and hardship to the petitioner.
4. In the circumstances, the petitioner seeks to direct
the 2nd respondent to forward the petitioner's Ext.P3
application to the 1st respondent-Bank's Committee for
stressed Micro, Small and Medium Enterprises constituted as
per Ext.P5. The petitioner also seeks to declare that no
proceedings under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act,
2002 can be initiated until remedies under Ext.P5 Framework
for revival and rehabilitation are exhausted.
5. Standing Counsel entered appearance on behalf of
the respondents and resisted the writ petition. The Standing
Counsel submitted that the petitioner's Unit is not functioning
since 2020. The land, where the Unit is functioning, has been
acquired by the National Highways Authority of India. Prior to
Ext.P3 representation, the Committee constituted under
Ext.P4 Master Direction, considered the case of the petitioner
and found that the Unit is not functioning and there is no
proposal for revival of the same, inasmuch as the petitioner
has not pointed out alternate land or building for continuing
the industry.
6. Be that as it may, the petitioner's intention is to
settle the loan account availing waiver of permissible interest.
The Standing Counsel for the Bank would submit that there is
no Scheme for One Time Settlement available as of now and
any relaxations can be considered only under a compromise
settlement. If that be so, I am of the view that the petitioner
should be permitted to avail that benefit, without prejudice to
her right for a One Time Settlement as and when a Scheme
comes.
In the light of the afore facts, the writ petition is disposed
of permitting the petitioner to approach the Bank with
appropriate compromise proposal. If the petitioner makes
such a compromise proposal paying upfront payment if
necessary as per the rules of the Bank, the Bank shall
consider the same expeditiously. This will be without
prejudice to the right of the petitioner to challenge the decision
taken by the Committee under the Master Circular constituted
under Ext.P4. If the petitioner makes such a compromise
proposal within a period of one week from today, coercive
proceedings against the petitioner shall stand deferred till the
Bank takes a decision in the matter, which decision shall be
taken within a further period of two weeks.
Sd/-
N.NAGARESH
JUDGE
spk
APPENDIX OF WP(C) 16818/2024
PETITIONER EXHIBITS
Exhibit P1 A TRUE COPY OF THE MANNASSERIL
AGENCIES ACCOUNT STATEMENT FROM 01-01-
2020 TO 18-04-2024
Exhibit P2 A TRUE COPY OF THE NOTICE UNDER
SECTION 13(2) OF SARFAESI ACT MAKING
DEMAND OF IMMEDIATE REPAYMENT OF
ENTIRE DUE TO PETITIONER FROM 3RD
RESPONDENT DATED 29-02-2024
Exhibit P3 A TRUE COPY OF THE OTS PROPOSAL TO 2ND
RESPONDENT FROM PETITIONER AS ON 25-
04-2024
Exhibit P4 A TRUE COPY OF THE. (MASTER DIRECTION
FIDD.MSME & NFS.12/06.02.31/2017-18)
MASTER DIRECTION - LENDING TO MICRO,
SMALL & MEDIUM ENTERPRISES (MSME)
SECTOR
Exhibit P5 A TRUE COPY OF THE (RBI/2015-16/338
FIDD.MSME & NFS.BC.NO.21/06.02.31/
2015-16) FRAMEWORK FOR REVIVAL AND
REHABILITATION OF MICRO, SMALL AND
MEDIUM ENTERPRISES (MSMES)
Exhibit P6 A TRUE COPY OF THE CODE OF COMMITMENT
OF BANK'S COMMITMENT TO MICRO AND
SMALL ENTERPRISE PAGES 1 TO 8 AND PAGE
18 OF AUGUST 2015
