Madras High Court clears decks for arresting orator

December 27, 2014 11:55 am | Updated 11:55 am IST - MADURAI:

There is no prohibition under Code of Civil Procedure (C.P.C.) for banks to seek a court order for arresting loan defaulters even before filing an application in the court concerned to attach their properties, the Madras High Court Bench here has held.

Justice M. Duraiswamy passed the ruling while clearing the decks for arresting orator and television personality N.S.S. Nellai Kannan and his son N.K. Arumugam on a charge of failing to repay a personal loan of Rs 5 lakh obtained from Tamilnad Mercantile Bank in 2003.

Stating that the third Additional District Sessions Court in Tirunelveli had rightly ordered for the arrest of the loan defaulter and his son, the guarantor, on April 30, 2012, the judge directed the lower court to complete the execution proceedings within three months. The bank’s counsel, V. Karthikeyan, said the orator had taken the loan on December 13, 2003, and agreed to repay it in 60 equated monthly instalments of Rs 11,784, including 14.5 per cent interest per annum. His wife and son were the guarantors.

When he defaulted, the bank filed a civil suit before a district court in Tirunelveli in December 2006 for recovering the principal and interest totalling Rs 6.52 lakh. The orator contested the suit by accusing the bank of charging an exorbitant interest rate.

The District Court on July 1, 2010, decreed the suit in favour of the bank and directed the orator to repay the amount along with 17.75 per cent interest per annum from the date of filing of the suit. It also ordered him to pay Rs 58,061 towards litigation expenses.

When Mr. Kannan did not comply with the order, the bank filed an execution petition in 2012 and sought direction to arrest him and his son and lodge them in a civil prison for recovery of the loan amount which had risen to over Rs 10.62 lakh due to non-payment for years.

The district court ordered their arrest and production before it on June 8, 2012.

Immediately, the father-son duo filed a civil revision petition in the High Court Bench here in 2012 and succeeded in keeping the arrest order in abeyance until Mr. Justice Duraiswamy took up their case for final hearing recently and dismissed it.

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