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2022 DIGILAW 343 (KAR)

Nbt Zameer v. Canara Bank

2022-03-09

E.S.INDIRESH

body2022
JUDGMENT E.S. Indiresh, J. - This Writ Petition is filed by the petitioners calling in question the sale notices dated 23rd June, 2021 (Annexure-H and J) issued by the respondent-Bank and also sought for a writ of mandamus seeking direction to respondent-bank to consider the representation Annexure-G dated 03rd April, 2021. 2. Brief facts, for adjudication of this petition are that, the respondent-Bank, pursuant to the request made by the petitioners, sanctioned loan in a sum of Rs. 25,00,000/- to the petitioners and the petitioners, being borrowers of the loan, deposited title deeds in respect of the schedule property. In the meanwhile, petitioners approached the respondent-Bank for acceptance of One-time Settlement as per the scheme of the respondent-Bank and as such, the respondent-Bank accepted the offer made by the petitioners for One-time settlement for sum of Rs. 18,00,000/- as per Annexure-D. The respondent-Bank had reduced the maximum period of repayment at two months and the petitioners have complied with payment of first two terms of One-time settlement on payment of Rs. 2,00,000/- (through receipt) and Rs. 6,00,000/- (through Demand Draft). Thereafter, the business of the petitioners was affected due to COVID-19 Pandemic and as such, approached the respondent-Bank for additional time to pay the balance amount of Rs. 10,00,000/- (Annexure-G). The grievance of the petitioners is that, the respondent-Bank, neither accepted the proposal for extension of time nor rejected the same, but has put the assets of the petitioners for auction to recover sum of Rs. 13,64,484.31 by fixing reserve price to the property at Rs. 35,00,000/-. It is the case of the petitioners that the property in question worth Rs. 1,00,00,000/- which is around three times of the reserve price and accordingly, the petitioners have challenged the sale notices issued by the respondent-Bank in this writ petition. 3. On service of notice, the respondent-Bank entered appearance and filed detailed written statement contending that the writ petition itself is not maintainable as no sale had taken place on the date of auction (23rd June, 2021). It is the case of the respondent-Bank that the petitioners are willing to settle dues through One-time settlement in sum of Rs. 18,00,000/- and same was accepted by the respondent-Bank subject to the condition that the petitioners have to comply with the terms of payment of One-time settlement. It is the case of the respondent-Bank that the petitioners are willing to settle dues through One-time settlement in sum of Rs. 18,00,000/- and same was accepted by the respondent-Bank subject to the condition that the petitioners have to comply with the terms of payment of One-time settlement. The respondent-Bank also took up a contention that the petitioners have to approach the competent authority under Section 17 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, hereinafter referred to as the 'Act') and accordingly, sought for dismissal of the Writ Petition. 4. I have heard Sri P.V. Chandrashekar, learned counsel appearing for the petitioner and Sri Hemanth R. Rao along with Sri Rukkoji Rao H.S., learned counsel appearing for the respondent-Bank. 5. Sri P.V. Chandrashekar, learned counsel appearing for the petitioners contended that though the respondent-Bank accepted the One-time settlement, but due to unforeseen situation of COVID-19 Pandemic, the petitioners were not able to pay the remaining two instalments in time and as such, filed representation dated 03rd April, 2021 (Annexure-G) seeking extension of time and the same is pending consideration before the respondent-Bank. In this regard, the learned counsel appearing for the petitioners has filed Memo dated 17th December, 2021 with details regarding the payment made to the respondent-Bank. He further contended that there is no impediment for the respondent-Bank to consider the representation Annexure-G dated 03rd April, 2021. 6. Per contra, Sri Rukkoji Rao, learned counsel appearing for the respondent-Bank, argued that the Writ Petition itself is not maintainable and he further argued that One-time settlement proposal is only an offer and the borrower has no legitimate right to insist for acceptance of the One-time settlement. He further argued that petitioners had availed Canara Business Loan from Chitradurga Main Branch in the name of NBT Convention Hall and same has not been disclosed at the time of One-time Settlement application despite having knowledge about the same and accordingly, he filed Memo dated 03rd March, 2022 stating that the petitioners are liable to pay a sum of Rs. 17,63,069.31 to the respondent-Bank. He further contended that since the sale had not taken place in terms of sale notice dated 23rd June, 2021, the writ petition has become infructuous. 17,63,069.31 to the respondent-Bank. He further contended that since the sale had not taken place in terms of sale notice dated 23rd June, 2021, the writ petition has become infructuous. He further contended that an efficacious remedy is available to the petitioners under Section 17 of the Act and therefore, Writ Petition is not maintainable. In support of his submission, he relied upon the judgment of the Apex Court in the case of The Bijnor Urban Co-Operative Bank Limited, Bijnor And Others v. Meenal Agarwal And Others made in Civil Appeal No. 7411 of 2021 decided on 15th December, 2021 and the Division Bench judgment of this Court in the case of Manne Guru Prasad v. Pavaman Ispat Private Limited And Others reported in AIR 2021 Kant. 155 and accordingly, sought for dismissal of the Writ Petition. 7. Having heard the learned Counsel appearing for the parties, I have carefully examined the writ papers. It is not in dispute that the petitioners had availed loan from the respondent-Bank. On perusal of writ papers it may be inferred that the petitioners suffered loss in the business on account of COVID-19 pandemic and as such, were not able to regularise the loan account. In the meanwhile, the petitioners made representation dated 05th January, 2021 (Annexure-B) to the respondent-Bank requesting to accept the proposal for one-time settlement. Pursuant to the same, the respondent-Bank accepted the same subject to terms of payment as per Annexure-D. In terms of the same, the petitioners made part payment. However, the petitioners were not able to pay the remaining two instalments referred to in Annexure-D and as such, the respondent-Bank issued notice under Section 13(4) of the Act and put the property in question to auction by issuing impugned sale notices Annexure-H and J. In the meanwhile, petitioners made representation dated 03rd April, 2021 requesting the respondent-Bank to provide an opportunity to him to regularise the loan account. In view of the averments made in the statement of objections, the respondent-Bank stated that the auction had not taken place as per sale notices. Apart from the factual aspects, the respondent-Bank has raised preliminary objection relating to maintainability of the writ petition. In view of the averments made in the statement of objections, the respondent-Bank stated that the auction had not taken place as per sale notices. Apart from the factual aspects, the respondent-Bank has raised preliminary objection relating to maintainability of the writ petition. I find force in the submission made by the learned counsel for the respondent-Bank to the effect that the petitioners are having an efficacious remedy under the Act and that apart, in terms of the law declared by the Hon'ble Apex Court in the case of BIJNOR (supra), this Court cannot direct the respondent-Bank to grant benefit of One-time settlement to the borrower and the borrower cannot take plea that One-time settlement benefit has to be extended as of right and in that view of the matter, this Court is of the opinion that the Writ Petition is liable to be dismissed, accordingly dismissed. 8. However, taking into consideration the factual aspects of the case that the property in question is not sold in public auction and the petitioner-borrowers having paid substantial amount to the respondent-Bank to protect their property and also considering the statement of account produced by the respondent-Bank as per memo dated 03rd March, 2022, in my considered opinion, there is no impediment for the respondent-Bank to consider the representation Annexure-G dated 03rd April, 2021. Accordingly, the respondent-Bank shall consider the representation dated 03rd April 2021 made by the petitioners and intimate the outcome of the same to the writ petitioners. This Court has not expressed any opinion on the merits of the case and respondent-Bank is directed to consider the representation Annexure-G dated 03rd April, 2021 independently, taking into account the background of the case on merits and pass appropriate orders in accordance with law, being an instrumentality of the State under Article 12 of the Constitution of India.