The Kerala High Court recently made a decision regarding government orders concerning bank debt recovery.
Stay Order Issued
The court issued a stay order on the government’s directive to revenue officials. This directive instructed them not to take coercive measures or attach properties based on requests from nationalized, scheduled, and commercial banks to recover debts from borrowers.
Interim Plea Granted
The court granted an interim plea from Federal Bank Ltd. The bank requested the court to allow revenue authorities to proceed with their request to initiate proceedings for selling and attaching properties of defaulters.
Challenge and Argument Presented
When a petition challenging the order was brought to the court, the bank’s counsel argued against it. They pointed out a circular issued by the government in 1979. This circular stated that a particular section of the Kerala Revenue Recovery Act applied to recoveries from individuals owing money to banks for agricultural purposes. The counsel argued that the government’s order contradicted this circular.
Allegation of Discrimination
The bank claimed that the government had treated recoveries by Kerala Bank differently. This, they argued, made the order discriminatory.
Court’s Observation
The court acknowledged the merit in the bank’s arguments. It believed that the bank’s counsel presented valid points, indicating a potential flaw in the government’s directive.
