Takeover of educational institution over loan default put on hold temporarily

A tense situation following an attempt by a private bank to take over the property of Sree Narayana Guru Institute of Science and Technology (SNIGST) at Manjali near North Paravur in Ernakulam, owing to an alleged loan default by the management, was temporarily resolved after the institute authorities agreed to make an immediate repayment of ₹1 crore.

It was the third attempt by the bank officials to initiate the acquisition process after receiving a favourable court order to take over the property under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Several police personnel were posted on the campus amidst concerns that the employees and students might resist the takeover of the property.

V.P. Asprasad, chairman and chief co-ordinator of the SNGIST Group of Institutions, said that the takeover process was halted after they agreed to make an immediate repayment of ₹1 crore. “We have agreed to repay about ₹50 lakh within three months. We are also considering a proposal for handing over the institution to a new management as part of settling the huge dues,” he said.

The institution set up by the Guru Deva Trust had taken a loan of ₹4 crore from Kotak Mahindra Bank Ltd. in 2014. The default in repayment had resulted in the arrears piling up to around ₹19 crore. The bank officials had made an attempt to acquire the property a month ago, but it was put on hold after the management agreed to repay around ₹1 crore. However, the delay in the repayment prompted them to take over the property on Friday.

Published - November 21, 2024 07:33 pm IST