Research › Search › Judgment

Calcutta High Court · body

2017 DIGILAW 814 (CAL)

Fairdeal Supplies Ltd. v. UCO Bank

2017-10-25

SOUMEN SEN

body2017
JUDGMENT : 1. The classification of the account of the plaintiff who is a constituent of the defendant is the subject matter of challenge in this proceeding. The matter has a chequered history. The plaintiff on earlier occasion has challenged the classification of the account as an NPA on one of the common grounds that the person who has issued the notice classifying the account as NPA also happened to be a part of the Grievance Redressal Committee, a body constituted to consider the grievance of a constituent in case of its account being classified and/or identified as an NPA. It appears that all such proceedings had culminated in an order passed by the Hon’ble Supreme Court of India in a special leave petition preferred by the UCO Bank against the Division Bench order by which the decision of the Grievance Redressal Committee was put on hold till the tribunal had taken a final decision. The Hon’ble Supreme Court set aside the said observation and/or decision of the Hon’ble Division Bench and the plaintiff was given liberty to challenge the decision taken by the Redressal Committee of the Bank before appropriate forum as it may be advised. Thereafter, it appears that the decision of the Grievance Redressal Committee of the Bank was challenged by way of a writ petition on the ground that the final decision identifying the assets as NPA was an unreasoned order. The writ petition being WP No. 1223 of 2013 was disposed of by an order dated 24th January 2014 by which the Grievance Redressal Committee was directed to consider all aspects of the matter and take a reasoned decision in accordance with law, if at all the plaintiff company has to be declared a willful defaulter, as early as possible but not later than four weeks from the date of receipt of a copy of the order. The plaintiff who was petitioner in the said proceeding was given liberty to participate in the hearing to be given by the Grievance Redressal Committee before taking a final decision. The writ petition was disposed of on 24th January 2014. Thereafter, the Convenor of the Grievance Redressal Committee issued a notice on 13th March 2014 requiring the petitioner to be present before the Committee for a hearing. The writ petition was disposed of on 24th January 2014. Thereafter, the Convenor of the Grievance Redressal Committee issued a notice on 13th March 2014 requiring the petitioner to be present before the Committee for a hearing. The plaintiff, upon receipt of the said notice, made a representation on 29th March 2014 seeking certain clarifications and/or furnishing of particulars so as to enable them to specifically deal with the issues regarding classification of the account as NPA. On 31st March 2014, the Convenor of the Grievance Redressal Committee gave a detailed reply by which the information and/or particulars sought for by the plaintiff in the earlier letter were furnished. The plaintiff, however, was not satisfied with the explanation and made further representation on 10th April 2014 before the Grievance Redressal Committee (Wilful Defaulter). All such communications were addressed to the Convenor of the Grievance Redressal Committee (Wilful Defaulter). Thereafter, the Grievance Redressal Committee passed a detailed order on 12th April 2014 by which the identification of the assets of the petitioner as wilful defaulter was upheld. 2. The grievance of the plaintiff appears to be that there is an infraction of Rule 3 of the Master Circular of the Reserve Bank of India by which two separate committees were constituted with regard to identification and/or classification of an account of a borrower as wilful defaulter. It is submitted that the Recovery Officer who also happens to be the Convenor of the Grievance Redressal Committee actively participated in both the proceedings and the presence of the said individual at both the stages of the said proceedings vitiates the final order passed by the Grievance Redressal Committee. It is further submitted that although at the final stage of hearing the plaintiff had prayed for time to make submission, such opportunity was denied. Insofar as the second grievance is concerned, the learned Senior Counsel representing the plaintiff is unable to demonstrate from record or otherwise that the plaintiff was denied of any such opportunity. There is no contemporaneous communication which would show that the Grievance Redressal Committee had denied the plaintiff a fair opportunity of representation. 3. Insofar the first grievance is concerned, it appears that the Grievance Redressal Committee had decided the matter on the basis of the direction initially passed by this Court and thereafter by the Hon’ble Supreme Court. There is no contemporaneous communication which would show that the Grievance Redressal Committee had denied the plaintiff a fair opportunity of representation. 3. Insofar the first grievance is concerned, it appears that the Grievance Redressal Committee had decided the matter on the basis of the direction initially passed by this Court and thereafter by the Hon’ble Supreme Court. The identification of the asset as NPA was communicated to the petitioner on 2nd July 2011 which forms the subject matter of challenge which had ultimately culminated in an order passed by the Hon’ble Supreme Court on 4th October 2013. The said notice was issued by the Deputy General Manager (Recovery). The Master Circular provides a two-tier system for considering the grievance of a borrower with regard to classification and/or identification of an account as NPA. The bank in its affidavit has disclosed the constitution of the committee for identification of the wilful defaulters which consists of the following persons: 1. Mr. N.R. Badrinarayanan Executive Director-II 2. Mr. N. Kumaraswamy General Manager (Recovery) 3. Mr. A. Chatterjee General Manager (Mid Corporate) 4. Mr. S.K. Sharma Dy. General Manager (Risk Management) 4. The said committee, on examination of the record, had identified the plaintiff as wilful defaulter. The relevant circular gives an opportunity to a wilful defaulter to seek redressal before the Grievance Redressal Committee (Wilful Defaulter) which consists of the Chairman-cum-Managing Director, Executive Director-I, General Manager (Recovery), General Manager (Corporate Credit), General Manager (Risk Management) and Deputy General Manager (Law). The Deputy General Manager (Recovery) will be the Convenor. The Chairman-cum-Managing Director with two other members excluding the Convenor will constitute the Coram. The communications on behalf of the above Grievance Redressal Committee are to be made by the Convenor. The petitioner is not able to demonstrate that the person who has identified the account as NPA initially had participated in the final decision. The classification in any event was made by a separate committee. Communication of a decision by a person authorized to do so does not make him a part of the decision making process. Moreover, the communication made by the Convenor of the Grievance Redressal Committee was detailed and to the benefit of the plaintiff as the plaintiff precisely knew the issues required to be addressed before the Grievance Redressal Committee while challenging the classification and/or identification of the account as NPA. Moreover, the communication made by the Convenor of the Grievance Redressal Committee was detailed and to the benefit of the plaintiff as the plaintiff precisely knew the issues required to be addressed before the Grievance Redressal Committee while challenging the classification and/or identification of the account as NPA. Had the communication been cryptic or lacked in material particulars, the decision could have weighed against the bank and in favour of the plaintiff. A detailed communication was made by the Grievance Redressal Committee in response to the communication of the plaintiff dated 13th March 2014. The Grievance Redressal Committee is constituted of persons who are experts in the field and had been closely associated with the transaction. There is no procedural irregularity in conducting the matter and, in my view, the decision was taken in accordance with the directions passed by this Court and in accordance with the norms laid down in the Master Circular. 5. Under such circumstances, the interim order stands vacated. The application fails. GA No.1725 of 2014 stands dismissed. However, there shall be no order as to costs. In view of the above findings, other issues are not required to be gone into at this stage. Mr. Ghosh, the learned senior counsel representing the plaintiff has prayed for stay of operation of the order. The order shall remain stayed for two weeks.