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2022 DIGILAW 37 (KAR)

Syed Moinuddin v. Chief General Manager

2022-01-06

KRISHNA S.DIXIT

body2022
ORDER 1. Petitioner couple being the borrowers of the respondent - Bank are knocking at the doors of Writ Court seeking issuance of a direction for the closure of their loan account by accepting the amount concluded in a One Time Settlement; the couple also wants a direction to the higher ups of the Bank to take suitable action against their erring officials for harassing it. 2. After service of notice, the respondents having entered appearance through their Panel Counsel resist the writ petition by filing the Statement of Objections; learned Panel Counsel makes vehement submissions in justification of Bank's action essentially contending that there is no concluded OTS and therefore, no relief can be granted to the petitioners who have been seeking the help from political personalities; so contending, he seeks dismissal of the writ petition. 3. Having heard the learned counsel for the petitioner -parties in person and learned counsel for the respondents and having perused the petition papers, this Court is inclined to grant indulgence in the matter as under and for the following reasons: a) Petitioners happen to be the borrowers under the Housing Loan Scheme of the respondent - Bank and they had borrowed a sum of Rs. 55,10,000/- as against the sanction loan of Rs.60.53 Lakh way back in November, 2007 is not in dispute; the Bank had wrongly fixed the monthly installment at the rate of Rs.62,476/- keeping in view the sanctioned loan of Rs.60.53 Lakh and therefore, the same came to be rectified by re-fixing it at Rs.55,538/- is evidenced by Bank's letter dated 23.03.2017 at Annexure - E1 and other correspondence as well. b) When the Bank was unjustifiably troubling the petitioners, they had approached a Central Minister of the Cabinet rank who happen to be Returned Candidate from an electoral constituency in which the petitioners have been residing; the Minister promptly responded to the same requesting the Bank to look into their grievance as to their offer for OTS; this by any stretch of imagination, can be said to be wrong; in a society like ours, the citizens turn to their elected representatives for procuring justice from the Governmental institutions, needs no elaboration. c) The respondent - Bank had addressed a letter to the Central Minister on 12.12.2018 which is worth reproducing: "Respected Sir, Housing Loan: REPRESENTATION GIVEN BY MR. SYED MOINUDDIN: We refer to yhouer letter no. MOSPI/BO/1141/2018 dt. c) The respondent - Bank had addressed a letter to the Central Minister on 12.12.2018 which is worth reproducing: "Respected Sir, Housing Loan: REPRESENTATION GIVEN BY MR. SYED MOINUDDIN: We refer to yhouer letter no. MOSPI/BO/1141/2018 dt. 27.10.2018, enclosing the representation received by you from Mr. Syed Moinudding, regarding one time settlement of his housing loan a/c no.30231 778847. 2. The housing loan was sanctioned on 21.8.2017 for Rs.60,53,000 with EMI of Rs.62,748/-, for purchase of ready built flat. The sanction included SBI Life Cover of Rs.5,12,158/-,whdh was not availed by Mr. Syed Moinuddin. Hence EMI was refixed as Rs.58,784/- for the actual loan availed, viz, Rs. 55,10,10,000/-. This was conveyed to him vide our letters dt. 3.6.2015, 14,12,2016 & 10.1.2017. EMI started from October 2007. Accordingly, 75 EMIs amounting to Rs.43,22,424/- were due as on 10.01.2014. But the amount remitted by him is Rs.41,07,588/-. This resulted in an irregularity of Rs.2,14,836/-, which is more than 3 EMIs due and the account Slipped to NPA. 3. Based on the discussions with the customer, we reached a One Time Settlement (OTS) offer of Rs.22.10 lakhs. The offer involves maximum sacrifice which can be afforded by the bank customer's request to bring down the compromise amount to Rs. 16.00 lakhs cannot be afforded as the extant guidelines do not permit the bank. The customer is delaying repayment by resorting to correspondence/complaint to various forums and authorities even after providing him all the details and clarifications sought. 4. The Customer may please be advised to contact our AGM, Asset Recovery Management Branch, K.G.Raod, Bangalore for settlement of dues. Bank is always ready to settle the dues within RBI/Banking Norms. Yours faithfully, DEPUTY GENEFRAL MANAGER & CCO" d) The vehement contention of Bank's counsel that there never was a concluded OTS for a sum of Rs.22.10 Lakh is absolutely unjustifiable to say the least; para 3 of the aforesaid letter specifically states "based on the discussions with the customer, we reached a One Time Settlement (OTS) offer of Rs. 22.10 Lakhs. The offer involves maximum sacrifice which cannot be afforded by the Bank...."; at para 4, the Bank had asked the Minister to advise the customer i.e., the first petitioner herein "to contact our AGM, Asset Recovery Management Branch ... for settlement of dues. 22.10 Lakhs. The offer involves maximum sacrifice which cannot be afforded by the Bank...."; at para 4, the Bank had asked the Minister to advise the customer i.e., the first petitioner herein "to contact our AGM, Asset Recovery Management Branch ... for settlement of dues. Bank is always ready to settle the dues within RBI/Banking Norms"; that being the position, there was a concluded contract in terms of OTS; further, on the instruction of the Minister the first petitioner approached the Bank with a Demand Draft of Rs. 1,00,500/- dated 30.01.2019 along with a forwarding letter evenly dated; however, the Bank did not positively respond. e) A Coordinate Bench of this Court vide interim order dated 21.10.2019 had directed the respondent - Bank to consider the request of the petitioner for settlement in the light of Bank's letter dated 12.12.2018 that was addressed to the Minister; however, the concerned officials of the Bank obstinately repelled the stand of the petitioners with no justification whatsoever; the respondent - Bank is not a private lender and therefore cannot adopt usurious practices or the like; it is a statutory Bank and therefore, all its actions have to conform to standard fairness procedures; however, the act of the Bank in this case falls much short of compliance of the same; although this is a fit case to award exemplary costs, this Court reluctantly abstains from doing it. f) Ordinarily, the Writ Courts do not interfere once the Bank declines the offer of OTS consistent with the extant RBI Guidelines, as observed by the Apex Court in a catena of decisions including the latest one in The BIJNOR URBAN COOPERATIVE BANK LTD., Vs. MEENAL AGARWAL, Civil Appeal No.7411/2021 disposed off on 15.12.2021; however, the fact matrix emerging from the records of the Bank itself discloses there being a concluded OTS and therefore, it is not a case of borrower putting forth the OTS proposal; if the Writ Courts deny relief even in such a fool-proof case, the right thinking members may be disillusioned in the adjudicatory process; therefore, relief has to be granted. In the above circumstances, this writ petition succeeds; a Writ of Mandamus issues to the respondent - Bank to close the loan account of the petitioners by accepting Rs.22.10Lakh being the OTS value and in full satisfaction of all the payables within four weeks and return the documents of title to the first petitioner immediately; if delay is brooked, the Bank shall pay to the first petitioner a sum of Rs. 1000/- per day. Now, no costs.