J L Cashews Private Limited v. IDBI Bank Ltd

## `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ## `THE HONOURABLE MR. JUSTICE GOPINATH P.` ``` THURSDAY, THE 12[TH] DAY OF JANUARY 2023 / 22ND POUSHA, 1944 ``` ## `WP(C) NO. 899 OF 2023` ## `PETITIONER:` ``` J L CASHEWS PRIVATE LIMITED REPRESENTED BY MANAGING DIRECTOR LEELAMMA JOHN, PADIPURAKKAL PRATHIBHHA JUNCTION, KADAPPAKADA, KOLLAM, PIN - 691008 ``` ``` BY ADVS. B.J.JOHN PRAKASH P.PRAMEL ``` ## `RESPONDENT:` ``` IDBI BANK LTD REPRESENTED BY AUTHORIZED OFFICER, "OMKARAM", KANKATHUMUKKU, NH/47, KOLLAM, PIN - 691012 BY ADV KIRAN M.S. ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON ``` ``` 12.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WPC No.899 of 2023 ``` 2 ## **JUDGMENT** ## **Dated this the 12[th] day of January, 2023** The petitioner had availed certain credit facilities from the respondent bank. On the account being classified as a Non-Performing Asset, proceedings were initiated by the respondent bank under the provisions of the SARFAESI Act. 2. In the meanwhile, the bank introduced a One Time Settlement scheme called ‘Amrit Mahotsav Rinn Bhugtan Yojana’. On being found eligible for settlement under the provisions of that scheme, the petitioner was issued with Ext.P1 letter dated 31.10.2022 (which, it is stated was received by the petitioner only on 14.11.202) permitting the petitioner to clear the liability of Rs.5,49,98,093/- as on 30.09.2022 by paying a total amount of Rs.1,26,26,070/-. The petitioner was required to pay a sum of Rs.12,62,607/- before 31.12.2022 and the ``` WPC No.899 of 2023 ``` 3 balance before 31.01.2023. Thereafter, the petitioner was issued with Ext.P2 giving two options to the petitioner; first option was the one already communicated through Ext.P1 while the second option was one permitting the petitioner to pay a sum of Rs.13,46,780.80 on or before 31.12.2022 and the balance of Rs.1,21,21,027.20, (making a total of Rs.1,34,67,808/-) before 31.03.2023. It is not in dispute that the petitioner did not make any payment under any of the options offered to the petitioner before 31.12.2022. The petitioner had paid only a sum of Rs.1,00,000/-. 3. According to the petitioner, the petitioner has approached the bank through Ext.P3 requesting as follows:- “ xxx xxx xxx 3. It is humbly brought to your kind notice that our account has become NPA due to absolute liquidity crisis and therefore, we do not have access to any amounts other than by means of disposing of the properties mortgaged ``` WPC No.899 of 2023 ``` 4 with you. However, the terms of sanction does not envisage such part payment or part release of property. We have at present suitable buyers for the properties who would, however, require more than three months for making full payment. We could receive a portion of the sale consideration as advance which could be remitted with you and the remaining could be payable upon execution of the sale deed. However, your condition of forfeiting the advance paid in the event of non- payment of the entire dues within 31.01.2023 as per the 1"Sanction Letter and 31.03.2023 as per the 2 Sanction Letter would scare off prospective buyers. We therefore, propose to introduce such buyers to you and enter into agreements with them with your concurrence. Such 3rd parties may also be permitted to deposit the advance amount with you in a no-lien account and upon payment of the balance amount of the valuation of a particular property, in line with the OTS amounts, you may release the said property to such 3rd parties and discharge our liability to that extend. 4. In the event of the bank not being agreeable to the above proposal, time may be granted to us till 31.03.2023 to settle the account in toto under the aforesaid OTS Scheme without insisting on the upfront payment. ``` WPC No.899 of 2023 ``` 5 5. We request you for a personal hearing to apprise you of the aforesaid proposals and viability of the same. Needless to add that all coercive measures for recovery may kindly be kept in abeyance till a finality is arrived at the above.” It is submitted by the learned counsel for the petitioner that without giving any reply to Ext.P3, the bank continued with the proceedings under the SARFAESI Act and the Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Kollam in M.C. No.377/2022 has issued Ext.P4 notice proposing to take physical possession of the secured asset on 16.01.2023. 4. Learned counsel appearing for the respondent bank would submit that the request made by the petitioner through Ext.P3 letter dated 31.12.2022 has been replied to by the respondent bank stating that the request cannot be considered as per the bank’s policy and guidelines. It is submitted that the petitioner was given a substantial reduction under the ``` WPC No.899 of 2023 ``` 6 One Time Settlement scheme and liability of nearly Rs.5.5 crores was permitted to be settled in terms of the One Time Settlement by paying either a total sum of Rs.1,26,26,070/- on or before 31.01.2023 or a sum of Rs.1,34,67,805/- on or before 31.03.2023. Learned counsel appearing for the respondent bank also submits that going by the recent judgment dated 04.11.2022 by the Hon'ble Supreme Court in **State Bank of India v. Arvindra Electronics Pvt. Ltd. in Civil Appeal No.6954/2022 [2022 (6) KLT online** **1115 (SC)]** , this Court cannot exercise jurisdiction under Article 226 of the Constitution of India to modify or alter the terms of the One Time Settlement which has been offered to the borrower in terms of the policy of the respondent bank. 5. Having heard the learned counsel for the petitioner and the learned counsel appearing for the respondent bank, I am of the opinion that there is considerable merit in the contention taken by the ``` WPC No.899 of 2023 ``` 7 learned counsel appearing for the respondent bank. The petitioner was allowed to settle the liability of nearly Rs.5.50 crores by paying the amount under the One Time Settlement as already indicated above. The amounts under which the petitioner was permitted to settle the liabilities indicate that the bank had given substantial concession to the petitioner. I must note that it is evident from Ext.P1 that even the principal amount outstanding in respect of the two loans availed by the petitioner as on 30.09.2022 was Rs.2,31,51,391/-. In other words, the petitioner had been permitted to settle the liability for a sum substantially lower than that of the principal amount outstanding as on 30.09.2022. In spite of the substantial benefit granted by the bank, the petitioner has chosen to seek modification of the terms of the One Time Settlement without even paying the amount which was payable upfront on or before 31.12.2022. I must also note that the petitioner issued Ext.P3 ``` WPC No.899 of 2023 ``` 8 letter by speed post only on 31.12.2022, the date on which he was required to make the upfront payment in terms of the One Time Settlement proposals communicated to him. In such circumstances, I am of the view that the law laid down by the Hon'ble Supreme Court in **State Bank of India** (Supra) squarely applies. The petitioner is not entitled to any reliefs. The writ petition fails. It is accordingly dismissed. **Sd/-** **GOPINATH P.** **JUDGE** SKP/12-01 ``` WPC No.899 of 2023 ``` 9 ## `APPENDIX OF WP(C) 899/2023` ``` PETITIONER’S EXHIBITS: EXHIBIT-P1TRUE COPY OF THE SANCTION LETTER RECEIVED ON 14.11.2022 ISSUED BY THE RESPONDENT BANK EXHIBIT-P2TRUE COPY OF THE SANCTION LETTER RECEIVED ON 27.12.2022 ISSUED BY THE RESPONDENT BANK EXHIBIT-P3TRUE COPY OF THE LETTER DATED 31.12.2022 SUBMITTED BY THE PETITIONER EXHIBIT-P4TRUE COPY OF THE NOTICE DATED 07.01.2023 ISSUED BY THE ADVOCATE COMMISSIONER IN M.C. NO. 377 OF 2022. ``` ``` RESPONDENTS' EXHIBITS:NIL ``` ## `TRUE COPY` ``` P.A. TO JUDGE ```