Punjab National Bank v. K.P. Umasankar

W.A. No. 1379/2022 : 1: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 22[ND] DAY OF SEPTEMBER 2022 / 31ST BHADRA, 1944 ## WA NO. 1379 OF 2022 AGAINST THE JUDGMENT IN W.P.(C) 4909/2020 OF HIGH COURT OF KERALA ## APPELLANT/RESPONDENT: THE PUNJAB NATIONAL BANK, REPRESENTED BY ITS MANAGER, SULTHAN BATHERY BRANCH SULTHAN BATHERY P.O., WAYANAD , PIN – 673 121. BY ADVS. R.S.KALKURA M.S.KALESH ## RESPONDENT/PETITIONER: K.P. UMASANKAR AGED 60 YEARS S/O. K.P. ANANTHAN, KERAYIPARAYIL HOUSE CHAKRUTTIVAYAL P.O., NARIKUNDU, AMBALAVAYAL, WAYANAD , PIN – 673 593. R1 BY ADV S.M.PRASANTH THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A. No. 1379/2022 : 2: ## **S. MANIKUMAR, CJ & SHAJI P. CHALY, J.** --------------------------------------------------------- W.A. No. 1379 of 2022 --------------------------------------------------------Dated this the 22[nd] day of September, 2022. ## **JUDGMENT** ## S. MANIKUMAR,CJ. Before the writ court, respondent/writ petitioner has sought for the following reliefs: “i. To declare that the refusal on the part of the respondent bank to accept the balance amount stipulated in Ext.P1 OTS from the petitioner is in violation of his Fundamental Rights guaranteed under Articles 14, 19, 21 and Article 300A of the Constitution. ii. Issue a writ of mandamus or any other appropriate writ, order or direction commanding the respondents to accept the balance amount fixed in Exhibit P1 as full and final settlement of all liability as agreed in Exhibit P1 One Time Settlement (OTS), and release all documents deposited with the bank as security for the transactions in question, in the interest of justice.” 2. Short facts leading to the filing of the writ petition are as follows: The respondent/writ petitioner is a guarantor to a loan availed by a proprietary concern namely PBT Spices to the tune of Rs.11,70,000/- on 23.6.2006. The said loan amount was being paid in instalments and later became a non performing asset (NPA). With W.A. No. 1379/2022 : 3: respect to the said loan transaction, the Bank has filed O.A. No.292 of 2012 and S.A. No.799 of 2010 against the proceedings initiated against his property under the SARFEASI Act, 2002 before the Debt Recovery Tribunal, Ernakulam and both are pending consideration of the said Tribunal. 3. While so, the Bank arranged a special One Time Settlement (OTS) camp and has agreed to accept Rs.7,02,116/- as a onetime settlement (OTS) for full and final settlement of the amounts due in the transactions. The defaulters agreed to pay Rs.4,50,000/- then and there and the said amount was remitted on the same day itself. As per the scheme, the balance amount of Rs.2,52,116/- was to be paid within 45 days i.e., on or before 15.05.2019. It is stated in the offer letter that if the said amount is not remitted within the time limit prescribed, the OTS will get cancelled. 4. It is submitted that unfortunately the principal debtor Thankappan K.N. expired on 08.05.2019, a few days before the date stipulated for the remittance of the balance amount. It is submitted that the principal debtor had promised and agreed that the balance amount will be paid by him as agreed in the OTS. However, there was only a few more days since then left before the W.A. No. 1379/2022 : 4: time prescribed for remitting the balance amount, the borrower could not raise the said amount and close the loan transaction. 5. It is submitted that the respondent/writ petitioner had informed the appellant and requested to grant more time to remit the balance amount. According to the appellant, though the Manager of the Branch had initially agreed to enlarge the time for remitting the balance amount, since there was change in the managership of the Branch, the said liberty was not granted. 6. After considering the rival submissions and taking note of the judgment in **Bindu Vijayakumar V. Regional Manager, SBI, Kollam and others [2022(1) KHC 394]** , judgments of the Hon’ble Supreme Court in **Vijayakumari P. and another V. Indian Bank represented by its Chief Manager [AIR 2018 SC 759], Mehar Reynolds V. Josemon Simon and Another [2019 (5) KHC 196],** the judgment of a Division Bench of the Punjab and Haryana High Court in **Aseem Gaind V. Axis Bank, Retail Assets Centre [2022 SCC OnLine P& H 531],** the judgment of a Division Bench of the same High Court in **Anu Bhalla and Another V. District Magistrate Pathancot and another [CWP NO.5518 of 2020],** the judgment of the Hon’ble Supreme Court in **M/s.Sardar Associates and Others V. Punjab & Sind Bank and others [2009 KHC 4895], G. Veerappa Pilla V. Raman and Raman** W.A. No. 1379/2022 : 5: **Ltd., [AIR 1952 SC 192], State Bank of India V. Vijay Kumar [AIR 2007 SC 1689], K.D. Sharma V. Steel Authority of India Limited and Others [2008 (12) SCC 481], State of Kerala and Others V. George Jacob [2010 (3) KHC 381], Eastern Coalfields Ltd and Others V. Bajrangi Rabidas [2013 KHC 4777], Bijnoor Urban Co-operative Bank Limited v. Meenal Agarwal & others; Civil Appeal No.7411/2021,** Division Bench judgment of the Madras High Court in **Tamil Nadu Industrial Investment Corporation Ltd v. Millenium Business Solutions Pvt. Ltd. & ors; AIR 2005 Mad 232, V. Sunil Prasad v. Authorised Officer, Central Bank of India and others; Manu/TN/2640/2017,** and **T. Narayanan and others v. State; 1959 KLT 580,** writ court, vide judgment dated 07.07.2022 in W.P. (C) No. 4909 of 2020, allowed the writ petition directing as follows: “8. ……… The circumstances which compel me to follow the view taken in **Bindu Vijayakumar (supra)** are the following:- - i) Out of the total settlement amount of Rs.7,02,116/-, an amount of Rs.4,50,000/stood paid on the date of offer itself. ii) Before the balance of Rs.2,52,116/- could be paid, the principal borrower died on 8.5.2019, that is about a week before the time limit for making that payment expired. - iii) The petitioner, who is a guarantor had immediately approached the bank, pointing W.A. No. 1379/2022 : 6: out the fact the principal borrower had died, requesting for extension of time to make payment under the One Time Settlement Scheme. I am of the view that these three factors cumulatively compel me to hold that there are certain exceptional circumstances as noticed by the Supreme Court in Vijayakumari (supra) and by this Court in Bindu Vijayakumar (supra) to hold that a direction can be issued to the bank to accept the balance payable under the One Time Settlement offer along with interest to compensate the bank for the delay in making the payment. This writ petition is, therefore, allowed and it is directed that on payment of a sum of Rs.2,52,116/- together with interest at the rate of 14.5% per annum from 15.5.2019 till the date of payment, the entire liability of the petitioner (as a guarantor) to repay the liability of the principal borrower will stand extinguished. The benefit of this judgment will be available only if the aforesaid amount together with interest is paid to the bank within a period of one month from today. Interest shall be calculated as above, in the same manner as interest would be calculated and applied under the terms of the original loan agreement. The rate of interest is fixed at 14.5% as it is stated before me that this was the rate of interest applicable on the loan in question.” Being aggrieved, instant appeal is filed by the Bank. W.A. No. 1379/2022 : 7: 7. On this day, when the matter came up for consideration, Ms. Shilpa, learned counsel representing the learned counsel for the appellant on record, Sri. R. S. Kalkura, vehemently contended that the learned single Judge ought not to have entertained the writ petition and permitted the respondent for payment of the balance amount. She further submitted that the decisions relied on by the respondent herein, have no application to the facts of this case. 8. Per contra, Mr. S.M. Prasanth, learned counsel appearing for the respondent, submitted that the respondent has paid the balance amount of Rs.2,52,116/- with interest at the rate of 14.5% per annum, as ordered in the impugned judgment, within the stipulated time. Said submission is placed on record. 9. From the materials on record, it could be deduced that there was a settlement for the payment of Rs.7,02,116/- and an amount of Rs.4,50,000/- was paid on the date of proposal of the settlement itself. 10. Before the payment of balance amount of Rs.2,52,116/-, the principal borrower, namely, Thankappan K. N died on 08.05.2019 i.e., about a week before the time fixed for making payment. 11. In such circumstances, the guarantor/writ petitioner has approached the Bank pointing out the said fact and sought for time W.A. No. 1379/2022 : 8: for payment of balance amount through One Time Settlement Scheme. 12. Facts projected, certainly requires equitable consideration of the writ court to grant the relief, and the same has been done in the case on hand. Further, the balance amount as directed by this Court in the impugned judgment, has already been paid within the time provided therefrom. 13. Even though Ms. Shilpa, learned counsel representing the learned counsel for the appellant, made strenuous efforts for the reversal of the judgment, considering the facts and circumstances of the case, we are not inclined to interfere with the same. Accordingly, this writ appeal is dismissed. sd/- **S. MANIKUMAR, CHIEF JUSTICE.** sd/- **SHAJI P. CHALY, JUDGE.** Rv