A humane approach is warranted in cases involving senior citizens: High Court Grants Relief in Bank Loan Recovery Case, Allows Installment Repayments

The High Court of Kerala at Ernakulam has granted significant relief to a 71-year-old petitioner by allowing her to repay an outstanding loan in monthly installments. The judgment, delivered by Justice Dr. Kauser Edappagath on May 14, 2024, underlines the court’s consideration of the petitioner’s age and financial circumstances while dealing with the recovery proceedings initiated by Kerala Gramin Bank under the SARFAESI Act, 2002.

The petitioner, Sainaba A P K, a senior citizen, had availed a credit facility from Kerala Gramin Bank, Cheemeni Branch. Due to her failure to repay the loan, the account was declared a Non-Performing Asset (NPA), leading the bank to initiate recovery proceedings. Challenging these proceedings, Sainaba approached the High Court seeking relief.

The counsel for the bank confirmed that an amount of Rs. 11,40,929 was outstanding as of the hearing date. The bank expressed willingness to allow the petitioner to repay the amount in reasonable monthly installments.

The court considered the petitioner’s age and financial condition, directing her to repay the entire amount along with interest in 12 equal monthly installments starting from June 1, 2024. Justice Edappagath emphasized a compassionate approach, stating, "A humane approach is warranted in cases involving senior citizens."

The court stipulated that the petitioner must pay subsequent installments by the 5th of every month. If the petitioner defaults on any installment, the facility of installment payments would be canceled, and the bank would be free to proceed with recovery.

The judgment underscores the balance between financial institutions' rights to recover dues and the need for judicial compassion in special cases. By allowing installment payments, the court acknowledged the petitioner’s inability to repay the lump sum while ensuring the bank’s interests were protected. This approach is consistent with judicial precedents emphasizing the need for flexible solutions in recovery cases involving vulnerable individuals.

Justice Kauser Edappagath remarked, "The petitioner, being a senior citizen, deserves a considerate approach in dealing with the recovery proceedings. Allowing her to repay in installments ensures justice is served while safeguarding the bank’s interests."

The High Court’s decision provides a significant precedent for similar cases, highlighting the judiciary's role in offering equitable solutions in financial recovery matters. This judgment is expected to influence future cases, encouraging a balanced approach that considers the debtor's circumstances without compromising the creditor's rights.

Date of Decision: May 14, 2024