The Supreme Court recently invoked its powers under Article 142 of the Constitution to reduce a loan sum in a case where the woman was unable to pay the loan amount after her husband died during the COVID-19 pandemic.
A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi passed the order considering the unusual and unfortunate circumstances which prompted the Court to invoke its powers to do complete justice on equitable consideration. However, it clarified that the order was passed in peculiar circumstances and shall not be treated as precedent.
To briefly state, the wife has challenged the Madras High Court's order, which disallowed her to repay the loan amount after the expired one-time settlement offer. Her husband had taken a loan of Rs. 50 lakhs against which he had mortgaged a residential house.
During the pandemic, he passed away in 2021. Till then, he continued to pay the due installments but after his death, the account was classified as a non-performing asset, and the dues were to be recovered from the mortgaged house. However, the bank offered a one-time settlement of Rs. 34, 69,000.
While the wife deposited the upfront amount of Rs. 3,46,900, she was unable to pay the rest within six months. When she applied again to the bank for securing another one-time settlement opportunity, the respondent bank demanded an additional Rs. 9 lakh. But since she could not pay the said amount, a possession notice was issued to her. She filed a writ petition before the High Court against this, which was dismissed.
When she filed a Special Leave Petition against the High Court's order, the Supreme Court ordered a status quo on the property. Eventually, she was asked to submit a fresh one-time settlement offer under the old scheme under which she originally submitted.
After negotiations, the compromise amount came to be Rs. 46, 34, 000, which includes the upfront amount she had earlier paid. But the wife argued that she was deprived of the earlier one-time settlement due to the bank's mistake, because of which the deadline was crossed. She also claimed a lack of resources. Therefore, she argued that her liability should not exceed more than Rs. 31, 22, 000.
The bench considered the extreme hardship faced by the Appellant. In view of this, the Court on January 16 arrived at a conclusion that she should pay Rs. 33,00,000 over and above the upfront amount she has already deposited.
"We have considered the submissions. Though the demand raised by the Bank is legally sustainable, we find that compliance thereof would lead to extreme hardship for the appellant. While keeping in view the fact that the balance amount of Rs.31,22,000/- as per the first OTS was to be paid by the appellant by 30.06.2024, it seems to us that the ends of justice would be adequately met with if the appellant deposits a sum of Rs.33,00,000/-, over and above the upfront amount of Rs.3,46,900/- already deposited by her."
The Court has granted her eight weeks to deposit the amount.
Case Details: SUMAIYA PARVEEN v THE BRANCH MANAGER CENTRAL BANK OF INDIA & ANR. SLP (CIVIL) NO(S). 29289-29290 OF 2024
Appearances: For Petitioner(s) : Ms. Aswathi M.k., AOR Mr. S. Sethuraman, Adv. For Respondent(s) : Mr. Krishan Kumar, AOR Mr. Seemant Kr Garg, Adv. Mr. Nitin Pal, Adv.