1. The respondents in W.P.(C)No.44529 of 2025 have filed this writ appeal, invoking the provisions under Section 5(i) of the Kerala High Court Act, 1958, challenging the judgment dated 15.01.2026 of the learned Single Judge in that writ petition, which was one filed by the respondents herein-petitioners, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the respondents, namely, Cholamandalam Investment and Finance Company Ltd., which is a Non-Banking Financial Company (NBFC), and its Authorised Officer to regularise the loan availed by the 1st petitioner against Property Account No.HE1OCI00000036216 and the business loan availed by the 2nd petitioner with Loan Account No.BLTLCOCH000005027799, from the Cochin Branch of the said NBFC, and to permit the petitioners to pay the overdue amount in the said loan accounts, in installments, as may be granted by this Court; and a writ of mandamus commanding the respondents not to proceed against the mortgaged property under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

2. Ext.P1 notice dated 06.08.2025 issued by the 2nd respondent Authorised Officer of the 1st respondent NBFC is in respect of the loan availed by the 1st petitioner company against Property Account No.HE1OCI00000036216, for an amount of Rs.1,69,00,000/-, in which the overdue as on 31.07.2025 was Rs.4,75,488/- excluding late payment charges and other charges. In Ext.P2 notice dated 22.05.2024, which is in respect of the business loan availed by the 2nd petitioner with Loan Account No.BLTLCOCH000005027799, for an amount of Rs.20,00,000/-, the overdue as on 22.05.2024 was Rs.51,882/-. The accounts were classified as a non-performing asset (NPA) on 06.08.2025 and the 2nd respondent Authorised Officer issued Ext.P3 notice dated 07.10.2025, under Section 13(2) of the SARFAESI Act, in respect of the loan availed by the 1st petitioner company against Property Account No.HE1OCI00000036216. In the writ petition, it is stated that, due to severe financial hardship, the petitioner could not remit the monthly installments in time.

3. On 11.12.2025, when W.P.(C)No.44529 of 2025 came up for admission, the learned Single Judge granted an interim order, which reads thus;

                  “The learned Standing Counsel appearing for the respondent-Bank seeks time to file a statement showing the amount due and the amount already remitted in respect of the loan. For deciding the maintainability of the writ petition, to consider the prayers seeking installment facility and regarding the willingness of the Bank to regularize the account, and since the Bank is proposing to take physical possession of the property, the coercive steps against the petitioners shall be deferred for a period of eight weeks on condition that the petitioners remit an amount of Rs.1,00,000/- (Rupees One lakh only) within a period of one month from today. It is made clear that if the payment is not made, the respondents will be at liberty to proceed in accordance with law.”

4. On 17.12.2025, the 2nd respondent in W.P.(C)No.44529 of 2025, i.e., the Authorised Officer of the 1st respondent NBFC filed a counter affidavit, opposing the reliefs sought for in that writ petition, producing therewith Ext.R2(a) statement of account of the loan availed by the 1st petitioner company against Property Account No.HE1OCI00000036216. Along with that counter affidavit, the respondents have also filed I.A.No.1 of 2025 seeking an order to vacate the aforesaid interim order dated 11.12.2025. In the affidavit filed in support of I.A.No.1 of 2025, which is one sworn to by the Authorised Officer of the NBFC, the legal and factual contentions raised in the counter affidavit are reiterated. Paragraphs 3 to 6 of the affidavit dated 17.12.2025 filed in support of I.A.No.1 of 2025 read thus;

                  “3. At the very outset, it is submitted that the writ petition is not maintainable since this respondent is a Non-Banking Financial Company (NBFC) and is not an authority of the ‘State’ under Article 12 of the Constitution of India. Therefore, this respondent is not amenable to the writ jurisdiction of this Hon'ble Court. The Hon'ble Supreme Court, in Phoenix ARC Pvt. Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345], has categorically held that a writ petition against a private financial institution is not maintainable in matters arising out of securitization proceedings. Hence, the writ petition is liable to be dismissed on this ground alone.

                  4. Vide interim order dated 11.12.2025, this Hon'ble Court deferred the SARFAESI proceedings initiated by this respondent, on the condition that the petitioner deposits Rs.1,00,000/- within one month, and directed this respondent to file a statement showing the amount due and the amounts already remitted by the petitioner. In compliance, it is submitted that the SARFAESI proceedings initiated by this respondent is only with respect to Loan against property availed by the petitioner. The details of the said loan account are as follows;

                  a. The loan account No. is HE01OC100000036216.

                  b. Amount of loan availed: - Rs.1,69,00,000/-

                  c. The tenure is 158 months (13 years and 2 months);

                  d. The monthly EMI is Rs.2,17,025.

                  e. As on 15.12.2025, the total outstanding in the loan account is Rs.1,69,41,249/- and the total overdue is Rs.14,38,867/-.

                  5. During the period of loan, the petitioners have thus defaulted 6 EMIS, amounting to Rs.13,01,175/- (Rupees Thirteen Lakh One Thousand One Hundred and Seventy Five), with respect to the above loan account No. HE01OC100000036216.

                  6. The loan account No.HE01OC100000036216 is classified as a Non-Performing Asset (NPA) on 03.10.2025. Since the petitioner has failed to pay 6 EMIS with respect to loan account No.HE01OC100000036216 and continues to remain in default, and as the total loan overdue amount including charges is Rs.14,38,867/-, this respondent was constrained to proceed under the SARFAESI Act. This respondent is not willing to extend any installment facility or restructuring since the petitioner has been in continuous default from 05.06.2023, and has not exhibited any bona fide intention to clear the overdue amounts or regularise the monthly instalments.”

                  (underline supplied)

5. On 15.01.2026, when W.P.(C)No.44529 of 2025 came up for consideration, the learned Single Judge disposed of the same, by the judgment dated 15.01.2026, permitting the petitioner to remit the overdue amount of Rs.15,90,225/-, together with any accrued interest, cost and allied charges, in 8 equal monthly installments commencing from 15.02.2026 and the subsequent installments payable on or before 15th day of every succeeding months, along with regular monthly installments. In the judgment it was made clear that, in the event of default of any one installment, the 1st respondent NBFC shall be entitled to proceed with the coercive steps, in accordance with law. Paragraphs 2 to 4 of the judgment dated 15.01.2026 read thus;

                  “2. On 11.12.2025, an interim order was passed by this Court deferring the coercive steps against the petitioner on condition that the petitioner remits an amount of Rs.1,00,000/- within one month. It is submitted that the said interim order has been complied with.

                  3. The learned Standing Counsel for the Bank, on instructions, submits that the overdue amount as on date is Rs.15,90,225/- and the Bank has no objection in regularizing the loan accounts.

                  4. Having heard the learned counsel on both sides, and taking note of the fact that the Bank is proposing to take physical possession of the property and since the Bank has no objection in regularizing the loan accounts, I deem it appropriate to dispose of this writ petition with the following directions:

                  a) The petitioner shall remit the overdue amount of Rs.15,90,225/- (Rupees Fifteen Lakhs Ninety Thousand Two Hundred and Twenty Five only) together with any accrued interest, cost and allied charges, in eight equated monthly installments, starting from 15.02.2026 and the subsequent installments shall be paid on or before 15th of every succeeding months.

                  b) The petitioner shall continue to pay the regular EMIs/installments along with the installments as directed above.

                  c) In the event of default of any one installment, the respondent Bank shall be entitled to proceed in accordance with law.

                  d) All coercive proceedings shall be kept in abeyance to enable the petitioner to repay the entire amount as directed above.”

6. Challenging the judgment dated 15.01.2026 of the learned Single Judge in W.P.(C)No.44529 of 2025, the appellants- respondents are before this Court in this writ appeal.

7. Heard arguments of the learned counsel for the appellants-respondents and also the learned counsel for the respondents-petitioners.

8. The learned counsel for the appellants-respondents would contend that the judgment dated 15.01.2026 is contrary to the settled law laid down by the Apex Court in Phoenix ARC Pvt. Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345] on the maintainability of a writ petition against a private financial institution/NBFC and also the law laid down by the Apex Court as well as this Court on the maintainability of a writ petition in view of an efficacious alternative remedy provided under Section 17 of the SARFAESI Act. The learned counsel for the appellants would point out that the averments in paragraph 8 of the statement of facts in the memorandum of writ appeal, wherein it is stated that in the counter affidavit filed in W.P.(C)No.44529 of 2025 and also in the affidavit filed in support of I.A.No.1 of 2025 seeking an order to vacate the interim order dated 11.12.2025, the appellants- respondents have explicitly stated that they are not willing to extend any installment facility or restructuring, since the respondents-petitioners have been in continuous default, and they have not exhibited any bona fide intention to clear the overdue amount or regularise the monthly installments. However, in the judgment dated 15.01.2026 the learned Single Judge observed that the appellants-respondents have no objection in regularising the loan account. The learned counsel would point out that, as evident from Ext.R2(a) statement of accounts for the period from 31.01.2023 to 15.12.2025, there is continuous default from 05.06.2023, in respect of the loan availed by the 1st petitioner company against Property Account No.HE1OCI00000036216. The learned counsel would also point out the specific contention raised in Ground F of the memorandum of writ appeal that “the counsel for the appellants has not conceded for the grant of 8 installments for payment of the balance outstanding from the respondents- petitioners”.

9. On the other hand, the learned counsel for the respondents-petitioners would submit that by the judgment dated 15.01.2026 in W.P.(C)No.44529 of 2025, the learned Single Judge has only granted a breathing time to the petitioners to clear the overdue amount, so as to enable the 1st respondent NBFC to regularise the loan account. Such a discretion exercised by the learned Single Judge, while disposing of the writ petition, cannot be interfered with in an intra-court appeal filed under Section 5(i) of the Kerala High Court Act.

10. Cholamandalam Investment and Finance Company Ltd., the 1st appellant-1st respondent is a non-banking financial company (NBFC). In the counter affidavit dated 17.12.2025 filed in W.P.(C)No.44529 of 2025 and also in the affidavit filed in support of I.A.No.1 of 2025 seeking an order to vacate the interim order dated 11.12.2025, the appellants-respondents have stated that they are not willing to extend any installment facility or restructuring since the respondents-petitioners have been in continuance default from 05.06.2023 and they have not exhibited any bona fide intention to clear the overdue amount or regularise the monthly installments. The persistent default committed by the 1st petitioner company in the payment of monthly installments in respect of the loan availed by the 1st petitioner company against Property Account No.HE1OCI00000036216 is evident from Ext.R2(a) statement of account produced along with the counter affidavit dated 17.12.2025 filed in the writ petition.

11. In Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345] the Apex Court was dealing with a case in which Phoenix ARC (P) Ltd. (for brevity ‘ARC’), which is a private financial institution, proposed to take action under the SARFAESI Act to recover the borrowed amount as a secured creditor. The Apex Court held that ARC as such cannot be said to be performing public functions which are normally expected to be performed by State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lends money to the borrowers and the said activity of the bank/ARC cannot be said to be as performing a public function, which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken, and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, he has to avail the remedy under the SARFESI Act, and no writ petition would lie and/or is maintainable and/or entertainable.

12. In Sobha S. v. Muthoot Finance Limited [2025 (2) KHC 229], the Apex Court considered the question of maintainability of writ petitions under Article 226 of the Constitution of India against a private non-banking financial company and also a private company carrying on banking business as a Scheduled Bank. In the said decision, the Apex Court was dealing with a case in which the question raised was whether the Division Bench of the High Court was right in taking the view that Muthoot Finance Ltd., a non-banking financial institution registered under the Companies Act, 1956, is not a ‘State’ within the meaning of Article 12 of the Constitution of India. Before the Apex Court, it was contended that, although Muthoot Finance Ltd. may not be strictly falling within the ambit of ‘State’, yet being a non-banking financial institution is governed by the rules and regulations framed by the Reserve Bank of India and if statutory rules and regulations framed by Reserve Bank of India are breached by a non-banking financial institution, then as a statutory authority such financial institution is amenable to writ jurisdiction. The Apex Court found that the position of law is otherwise. Applying the test, as per the decision in LIC of India v. Escorts Ltd. [AIR 1986 SC 1370], the Apex Court held that Muthoot Finance Ltd., which is a non-banking financial institution, cannot be called a public body. It has no duty towards the public. Its duty is towards its account holders, which may include borrowers having availed of the loan facility. It has no power to take any action or pass any orders affecting the rights of the members of the public. The binding nature of its orders and actions is confined to its account holders and borrowers and to its employees. Its functions are also not akin to governmental functions. A body, public or private, should not be categorised as ‘amenable’ or ‘not amenable’ to writ jurisdiction. The most important and vital consideration should be the ‘function’ test as regards the maintainability of a writ application. If a public duty or public function is involved, any body, public or private, concerned or connection with that duty or function, and limited to that, would be subject to judicial scrutiny under the extraordinary writ jurisdiction of Article 226 of the Constitution of India. Although a non-banking finance company like Muthoot Finance Ltd. is duty bound to follow and abide by the guidelines provided by the Reserve Bank of India for smooth conduct of its affairs in carrying on its business, yet those are of regulatory measures to keep a check and provide guideline and not a participatory dominance or control over the affairs of the company. Paragraph 9 of the decision, the Apex Court held as follows;

                  ‘9. We may sum up thus;

                  (1) For issuing a writ against a legal entity, it would have to be an instrumentality or agency of a State or should have been entrusted with such functions as are Governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence Governmental.

                  (2) A writ petition under Article 226 of the Constitution of India may be maintainable against (i) the State Government; (ii) Authority; (iii) a statutory body; (iv) an instrumentality or agency of the State; (v) a company which is financed and owned by the State; (vi) a private body run substantially on State funding; (vii) a private body discharging public duty or positive obligation of public nature; and (viii) a person or a body under liability to discharge any function under any Statute, to compel it to perform such a statutory function.

                  (3) Although a non-banking finance company like the Muthoot Finance Ltd. with which we are concerned is duty bound to follow and abide by the guidelines provided by the Reserve Bank of India for smooth conduct of its affairs in carrying on its business, yet those are of regulatory measures to keep a check and provide guideline and not a participatory dominance or control over the affairs of the company.

                  (4) A private company carrying on banking business as a Scheduled bank cannot be termed as a company carrying on any public function or public duty.

                  (5) Normally, mandamus is issued to a public body or authority to compel it to perform some public duty cast upon it by some statute or statutory rule. In exceptional cases, a writ of mandamus or a writ in the nature of mandamus may issue to a private body, but only where a public duty is cast upon such private body by a statute or statutory rule and only to compel such body to perform its public duty.

                  (6) Merely because a Statute or a rule having the force of a statute requires a company or some other body to do a particular thing, it does not possess the attribute of a statutory body.

                  (7) If a private body is discharging a public function and the denial of any rights is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial but, nevertheless, there must be a public law element in such action.

                  (8) According to Halsbury's Laws of England, 3rd Ed. Vol.30, p.682, "a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform, and which performs the duties and carries out its transactions for the benefit of the public and not for private profit”. There cannot be any general definition of public authority or public action. The facts of each case decide the point.’

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13. During the course of a commercial transaction and under the contract, Cholamandalam Investment and Finance Company Ltd., which is a non-banking financial company (NBFC), lend money to the borrowers like the respondents-petitioners. In view of the law laid down by the Apex Court in Phoenix ARC (P) Ltd. [(2022) 5 SCC 345] and Sobha S. [2025 (2) KHC 229], the said activity of the NBFC cannot be said to be as performing a public function, which is normally expected to be performed by the State authorities. If proceedings are initiated by the said NBFC under the provisions of the SARFAESI Act and the borrower or the guarantor or any other person is affected by the action taken by the NBFC, he has to avail the statutory remedy provided under Section 17 of the SARFESI Act, and no writ petition would lie, maintainable or entertainable under Article 226 of the Constitution of India.

14. When the continuance of credit facilities as NPA will cause severe prejudice to bank/NBFC, as provisioning requires banks/NBFCs to set aside capital based on asset quality as per the guidelines issued by the Reserve Bank of India, no mandamus can be issued directing a bank/NBFC to accept the overdue amount in monthly installments, in respect of a loan account which has been classified as NPA, followed by the issuance of notice under Section 13 of the SARFAESI Act, disregarding the specific stand taken by the said bank/NBFC against regularisation of the said loan account by accepting the overdue amount in monthly installments. Therefore, the learned Single Judge committed a grave error in disposing of W.P.(C)No.44529 of 2025, by the judgment dated 15.01.2026, by permitting the petitioners to remit the overdue amount together with any accrued interest, cost and allied charges, in 8 equal monthly installments commencing from 15.02.2026, thereby virtually directing the 1st respondent NBFC (1st appellant herein) to regularise the loan account, despite the specific stand taken in the counter affidavit filed in W.P.(C)No.44529 of 2025 that the 1st respondent NBFC is not willing to extend any installment facility or restructuring since there is continuous default from 15.06.2023 in respect of the loan account in question. By such a direction, the learned Single Judge has interfered with the proceedings initiated by the 1st respondent NBFC under the provisions of the SARFAESI Act through the 2nd respondent Authorised Officer. Such a direction issued by the learned Single Judge, without taking into consideration the specific stand taken by the 1st respondent NBFC and its Authorised Officer in the counter affidavit filed in W.P.(C)No.44529 of 2025, against regularisation of the loan account by accepting the overdue amount in installments, and also the question of maintainability of the writ petition raised therein, placing reliance on the law laid down by the Apex Court in Phoenix ARC (P) Ltd. [(2022) 5 SCC 345], cannot be sustained in law.

                  In the result, this writ appeal is allowed by setting aside the judgment dated 15.01.2026 of the learned Single Judge in W.P.(C)No.44529 of 2025 and the said writ petition stands dismissed; however, without prejudice to the right of the respondents-petitioners to invoke the statutory remedy provided under Section 17 of the SARFAESI Act, at the appropriate stage, against the measures taken by the secured creditor under the provisions of the said Act.