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J&K High Court · body

2022 DIGILAW 222 (JK)

K. C. Grand v. J&K Bank Ltd.

2022-05-09

RAJNESH OSWAL

body2022
JUDGMENT : 1. The present petition has been filed by the petitioner for quashing the communication dated 05.05.2020 issued by the respondent No. 2 whereby the request of the petitioner for providing the copy of Bank appraisal report/note regarding loan of the petitioner has not been acceded to and further prayer has been made for directing the respondent Nos. 1 and 2 to provide the loan appraisal report to the petitioner or directly forward the same to the respondent No. 3 for processing the case of the petitioner regarding sanctioning and payment of subsidy. 2. It is stated that the petitioner had applied for the loan to the tune of Rs. 870 lacs (Rupees Eight Crores Seventy lacs only) for the construction of hotel and the respondent Nos. 1 and 2 sanctioned the said loan amount vide sanction letter dated 18.01.2006. The loan documents including mortgage deed were also executed. The petitioner repaid the loan amount to the respondent Nos. 1 and 2 and the respondent No. 2 also informed the Jammu Development Authority vide communication dated 21.06.2017 and pursuant to said communication, the bank lien was removed with regard to the land measuring 5.52 Kanals. It is further stated that Industrial Development Scheme, 2017 has been framed and the entrepreneurs who have availed the loan from the bank are also eligible for the sanction, grant and payment of subsidy. It is averred that the petitioner had constructed four storied hotel building with two basements situated at Rail Head, Trikuta Nagar, Jammu and the same was made functional. The petitioner being eligible for getting the subsidy submitted online application on IDS Portal to the respondent No. 3. The petitioner was advised to fulfil as many as 10 requirements including providing a copy of the bank appraisal report/note. The petitioner accordingly, submitted an application to the respondent No. 2 and the respondent No. 2 vide its communication dated 05.05.2020 informed the petitioner that its request for providing the copy of bank appraisal report has not been acceded to by the competent authority. It is further stated that the petitioner has fulfilled nine requirements but only bank appraisal report/note has not been furnished because the same was not provided by the respondent Nos. 1 and 2 without any lawful justification. It is further stated that the petitioner has fulfilled nine requirements but only bank appraisal report/note has not been furnished because the same was not provided by the respondent Nos. 1 and 2 without any lawful justification. After receiving the aforesaid communication from the respondent No. 3, the petitioner again approached the respondent No. 2 and discussion was held, wherein it was agreed that the request of the petitioner would be accepted. Accordingly, the petitioner vide letter dated 16.06.2020 requested the respondent No. 2 to send the appraisal report to DIC (respondent No. 3) directly so that its application for IDS could be processed at the earliest. The petitioner time and again approached for bank appraisal report/note but nothing has been done by the respondent Nos. 1 and 2. The petitioner claims to have been warned by the respondent No. 3 that in case, the bank appraisal report is not submitted before the due date, its claim would not be registered and consequently, the petitioner would not be entitled to the payment of capital subsidy. The petitioner has stated that as the loan stood adjusted and settled long ago with the respondent Nos. 1 and 2, so in these circumstances, there is no impediment and hurdle for the respondent Nos. 1 and 2 to provide the copy of the bank appraisal report/note for its submission to the respondent No. 3 for granting, sanctioning and payment of capital subsidy. But the respondent Nos. 1 and 2 without any reason have issued the communication impugned thereby, rejecting the request of the petitioner. 3. Response stands filed by the respondents. Respondent Nos. 1 and 2 have stated that disputed questions of facts are involved in the writ petition, as such, the writ petition is not maintainable. It is further stated that the petitioner had applied with the bank for the purpose of availing term loan facility for construction of hotel at Rail Head Complex, Jammu to the tune of Rs. 870 lacs and cash credit facility of Rs. 15.75 lacs. Out of sanctioned facility, only the term loan of Rs. 870 lacs was released in favour of the petitioner-firm. 870 lacs and cash credit facility of Rs. 15.75 lacs. Out of sanctioned facility, only the term loan of Rs. 870 lacs was released in favour of the petitioner-firm. The petitioner had committed default in liquidating the loan amount, as such, the loan account of the petitioner was declared as NPA (Non-performing Assets) on 10.11.2009 and instead of paying the whole outstanding loan amount, the petitioner firm opted for the settlement of their loan amount under One Time Settlement Scheme. Since, the loan account of the petitioner had turned NPA within short period of loan facility, so the competent authority agreed to adjust the loan of petitioner under OTS only on 21.06.2017. It is also stated that the petitioner had sought providing of the said appraisal report/note but the request of the petitioner was not acceded to by the competent authority as it is Bank's in-house document and it is meant for its exclusive purpose and such document cannot be provided and there is no such legal obligation to provide such document to the petitioner. It is also stated that so far as other documents like sanction letter and other security documents can be provided but there is no legal obligation to provide appraisal report which is Bank's in-house document and meant for its exclusive purpose. 4. Respondent No. 3 in its response has submitted that vide letter dated 20.05.2019, the case of the petitioner was recommended to the Directorate of Industries and Commerce, Jammu for necessary permission for the issuance of acknowledgment EM-Part-II formal registration under the service sector for the activity "Hotel" with its date of production as on 24.02.2019 i.e. the date of 1st invoice issued by the unit in terms of relevant Govt. Policy No. 58-Ind of 2016, dated 15.03.2016, read with procedural guidelines issued vide Govt. Order No. 129-Ind of 2017, dated 07.06.2017, vide this office letter No. DIC-J/11376-Ind/2611, dated 20.05.2019. It is further stated that necessary prior approval of Director, Industries and Commerce, Jammu for permission for issuance of acknowledgment EM-Part-II formal registration issued vide letter No. MSE-J/Dev/2959/329, dated 27.05.2019 was received. Consequent upon the approval of Director, Industries and Commerce, the office of the Director, Industries and Commerce vide letter No. DIC-J/11376-Ind/3634-35, dated 19.06.2019 issued the acknowledgment EM Part-II under Registration No. 07/004/23/14556, dated 19.06.2019. Consequent upon the approval of Director, Industries and Commerce, the office of the Director, Industries and Commerce vide letter No. DIC-J/11376-Ind/3634-35, dated 19.06.2019 issued the acknowledgment EM Part-II under Registration No. 07/004/23/14556, dated 19.06.2019. It is further stated that thereafter, the management of the petitioner applied to the office of the Director, Industries and Commerce Jammu vide application dated 08.07.2019 and subsequently, the office of Director, Industries and Commerce, Jammu accorded the necessary prior permission for the purchase and installation of 625 KVA capacity DG set in favour of the petitioner-enterprise. Thereafter, the management of the petitioner-enterprise applied to the office of Director, Industries and Commerce, Jammu for IDS registration vide application received on 18.12.2020. After scrutiny, the petitioner was directed to furnish the deficit documents which are pre-requisite for consideration of such cases/claims by the department vide communication dated 21.12.2020. The petitioner was also requested to upload the documents on portal and submit the bank appraisal report. It is also stated that it is mandatory to upload bank appraisal form as per guidelines of the Government as the management of the petitioner has failed to produce the requisite documents i.e. Bank Appraisal of J&K Bank Ltd., as such, the case could not be further processed by the answering respondent-department. 5. Mr. R.K.S. Thakur, learned counsel for the petitioner vehemently argued that submission of the bank appraisal report/note is a mandatory requirement for processing the application under IDS and the respondent Nos. 1 and 2 without any reason refused to furnish the bank appraisal report/note particularly, when the loan amount has been adjusted since long. 6. Per contra, Mr. Rupinder Singh, Advocate vehemently argued that bank appraisal report/note is an in house document of the Bank and it cannot be shared in any manner. He further submitted that the same is not mandatory requirement for the scheme and other documents such as sanction letter and security documents can be shared with the petitioner. 7. This Court had also summoned the General Manager, District Industries Centres, Exhibition Ground, Jammu who appeared before the Court and submitted the notification dated 23.04.2018 No. F. No. 2(2)/2018-SPS issued by the department of Ministry of Commerce and Industry. 8. Heard and perused the record. 9. 7. This Court had also summoned the General Manager, District Industries Centres, Exhibition Ground, Jammu who appeared before the Court and submitted the notification dated 23.04.2018 No. F. No. 2(2)/2018-SPS issued by the department of Ministry of Commerce and Industry. 8. Heard and perused the record. 9. A perusal of the Notification dated 23.04.2018 No. F. No. 2(2)/2018-SPS issued by the department of Ministry of Commerce and Industry reveals that Industrial Development Scheme has been made applicable to the Jammu and Kashmir w.e.f. 15.06.2017. As per the said scheme, the project cost is required to be appraised by a Scheduled Commercial Bank or Financial Institution before the proposal of assistance is approved by the Empowered Committee of DIPP and further, the said scheme is applicable to both new Industrial units as well as existing Industrial units on their substantial expansion in the manufacturing and service sector located anywhere in the Union Territory of J&K. As per the IDS scheme, the Industrial Units will be provided Central Capital Investment Incentive for access to credit (CCIIAC) @ 30% of the investment in plant and machinery with an upper limit of Rs.5.00 crores (for reference See 6.2(a) & 6.2(b) clause of the Notification). 10. Thus, it is clear that bank appraisal is sine qua non for processing the proposal of the Industrial units. The respondent No. 3 in its response has also categorically stated that the bank appraisal report/note by the J&K Bank is mandatory for processing the claim. 11. A perusal of the communication dated 05.05.2020 reveals that the request of the petitioner for issuance of bank appraisal report/note has been turned down by the respondent Nos. 1 and 2 without any reason. 12. The contention of the respondent Nos. 1 and 2 that the bank appraisal report/note is in-house document and cannot be shared with the petitioner is without any justification, more so, when the loan stands already settled. The respondent-bank has not been able to demonstrate any rule and regulation by the Reserve Bank of India prohibiting the sharing of the bank appraisal report/note with its customer. Otherwise also, in the present era, when there is transparency in working of all the institutions, the respondent Nos. 1 and 2 cannot take such plea particularly when the loan amount stands adjusted since long. Otherwise also, in the present era, when there is transparency in working of all the institutions, the respondent Nos. 1 and 2 cannot take such plea particularly when the loan amount stands adjusted since long. The Parliament has also enacted Right to Information Act 2005, recognising the right of citizens of country to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority. The Bank appraisal report cannot be considered as a guarded trade secret that is required to be hidden in vault of bank and it is such a document that cannot be shared with its customer. In the instant case, the bank appraisal report/document is mandatory requirement for processing the proposal under IDS and non-furnishing of the same would result in denial of the benefits of the scheme to the petitioner, if the petitioner qualifies the other criteria. 13. By denying the bank appraisal report/note to the petitioner, the respondent Nos. 1 and 2 are in fact creating hurdle in the processing of proposal of assistance of the petitioner. 14. In view of this, the writ petition is allowed and the communication dated 05.05.2020 is quashed. The respondent Nos. 1 and 2 are directed to furnish the copy of bank appraisal report/note of the petitioner to the respondent No. 3 within a period of fifteen days' from the date copy of this order is furnished to the respondent Nos. 1 and 2. 15. Disposed of.