WP2916.14.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2916 OF 2014
1. Kalpak Polyplastic Industries, a registered ]
partnership firm having its office at Flat ]
No. 72, Nymph CHS Ltd., 28, Narayan ]
Dabholkar Road, Mumbai - 400 006. ]
2. Palghar Plastic, a division of Nippo ]
Manufacturing & Trading Co. Ltd., having ]
their office situated at Flat No.72, Nymph ]
CHS Ltd., 28, Narayan Dabholkar Road, ]
Mumbai - 400 006. ig ] ... Petitioners
Versus
1. The State of Maharashtra to be served ]
Through Government Pleader, High Court ]
(O.S.), Mumbai. ]
2. Central Bank of India, a Banking ]
Organization having their local office ]
situated at Asset Recovery Branch, 346, ]
Standard Building, Dr.D.N. Road, Fort, ]
Mumbai - 400 023. ]
3. Reserve Bank of India, having their office ]
at Central Office Building, 18th Floor, ]
Shahid Bhagat Singh Road, Mumbai- 1. ]
4. M/s. Kumar International, a firm having ]
its office at A1, Samir Apartment, 169, ]
S.V. Road, Opp. Bank of India, ]
Andheri (West), Mumbai - 400058. ] ... Respondents
SRP 1/9
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Mr. Ashok M. Saraogi with Mr. Anand Mishra for the
Petitioner.
Mr. Umashankar Upadhyay, AGP, for the Respondent No.1.
Ms. Sapna Raichure with Mr. T.N. Tripathi i/b M/s. T.N.
Tripathi & Co. for the Respondent No.2.
Mr. Arvind Taral i/b Mr. O.M. Ashfaq for the Respondent No.4.
CORAM : S.C. DHARMADHIKARI &
B.P. COLABAWALLA, JJ.
WEDNESDAY, 5TH OCTOBER, 2016 ORAL JUDGMENT : [Per S.C. Dharmadhikari, J.] 1 By this petition under Article 226 of the Constitution of India, the petitioners, who are borrowers of the Central Bank of India, pray for issuance of a writ of mandamus or a writ, order or direction commanding the respondent No.3 -
Reserve Bank of India to hold an enquiry into the alleged nexus between the officers of the second respondent-bank and a third party, namely, M/s. Invent ARC. It is submitted that this third party is an assignee of the debt of the second respondent-bank.
The next prayer is for issuance of a similar writ directing and commanding the second respondent to accept the petitioners offer in full and final settlement of all the dues which the petitioners owe to the bank.
SRP 2/9
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2 Mr. Saraogi, the learned counsel appearing for the
petitioners submits that the petitioner No.1 is a registered partnership firm whereas the petitioner No.2 is a unit of a company known as Nippo Manufacturing and Trading Company Limited. The second respondent is a bank, rather a Nationalized Bank. The third respondent is the Reserve Bank of India and respondent No.4 is a private party and impleaded in the following circumstances.
3 It is claimed that the petitioners obtained financial assistance from respondent No.2. There was a default committed in repayment of the sums due and payable.
Therefore, a notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short "SARFAESI Act") was issued on 22nd August, 2013. That notice was also published in the local newspapers.
4 Immediately thereafter, the petitioners addressed a letter on 29th October, 2013, and equally filed an application / SRP 3/9 ::: Uploaded on - 07/10/2016 ::: Downloaded on - 08/10/2016 00:43:26 ::: WP2916.14.doc appeal under section 17 of the SARFAESI Act.
6 At Annexure-D to the writ petition, according to Mr. Saraogi, is a letter addressed by the petitioner to the second respondent bank stating that it has availed of several facilities.
It has also mortgaged an immovable property in Silvassa.
There was a litigation and a Court Receiver was appointed. The petitioners made an offer to settle the accounts and in the manner set out in this letter.
7 Pertinently, when Mr. Saraogi relies upon this letter at Exhibit-D page 49 of the paper-book, it is an offer made without prejudice to settle a non-performing asset / account of M/s. Kalpak Polyplastic Industries Limited and M/s. Palghar Plastics. Thereafter, another letter is written stating that there was a telephonic talk. The telephonic talk pertained to a proposal to sell the property to a third party and generate money from that and thereafter pay the sum of Rs.65 lakhs under a one-time settlement. The petitioners' claim that it has deposited Rs.15 lakhs as 25% upfront payment. The petitioners stated that they will pay the balance sum before 31 st SRP 4/9 ::: Uploaded on - 07/10/2016 ::: Downloaded on - 08/10/2016 00:43:26 ::: WP2916.14.doc March, 2014. In such circumstances, Mr. Saraogi would submit that on 6th April, 2014, the petitioners addressed a letter to the second respondent's Assistant General Manager and stated that the consent was given to make payment of Rs.65 lakhs in full and final settlement. However, the bank increased it to Rs.72.50 lakhs. The sum of Rs.15 lakhs was deposited after receiving the same as earnest money from the purchaser, namely, the fourth respondent. However this letter itself states that before the terms are finalised this amount should not be appropriated to the loan account. Pertinently, this letter says that the petitioners are yet to give a final approval. Thereafter, the increased amount demanded by the bank allegedly of Rs.72.50 lakhs is a proposal which was entirely unacceptable to the petitioners. That is how the petitioners sought refund of Rs.15 lakhs. That is not a sum paid by the petitioners but by the fourth respondent-proposed purchaser, namely, M/s.
Kumar International. It is clear that all these letters are without prejudice. When the bank considered all this, it replied to the petitioners on 9th April, 2014, and conveyed its approval only if a sum of Rs.72.50 lakhs is paid. The down payment of Rs.15 lakhs would be appropriated and adjusted SRP 5/9 ::: Uploaded on - 07/10/2016 ::: Downloaded on - 08/10/2016 00:43:26 ::: WP2916.14.doc and the balance amount of Rs.57.50 lakh shall be paid within thirty days of acceptance of this letter, failing which the bank intimated that the sanctions for settlement, granted by higher authorities, will lapse automatically without any further notice.
Upon such a letter being addressed, the bank also held a discussion and intimated to the petitioners that it has to withdraw all actions against the bank on the above accounts as well as in other group account M/s. Karthik International which is assigned by the bank to M/s. Invent ARC in the month of March, 2010.
8 The complaint of Mr. Saraogi is that the bank has withdrawn this one-time settlement proposal on arbitrary and untenable grounds. It now seeks to foist dues not payable to it, but to some third party, namely, M/s. Invent ARC. Such an offer for settlement can never stand the test of Article 14 of the Constitution of India.
9 It is not possible to accept any of these contentions and for more than one reason. It may be that on 9 th April, 2014, when the bank addressed a letter to the petitioners, it did SRP 6/9 ::: Uploaded on - 07/10/2016 ::: Downloaded on - 08/10/2016 00:43:26 ::: WP2916.14.doc not refer to the dues of M/s. Karthik International and allegedly assigned to M/s. Invent ARC. However, we must not lose sight of the fact that the petitioners themselves addressed a letter Annexure-I page 57 of the paper-book on 21st April, 2014. They referred to their without prejudice offers for settlement made earlier. They referred to their discussions and also the proposal to sell the property and thereafter from the proceeds thereof, make payment. They also say in this letter that the one-time settlement proposal was discussed and time to time the bank demanded more sums than what was initially agreed.
From the tenor of this letter it is clear that the property at Silvassa, which the petitioners intended to sell, is custodia legis on the own showing of the petitioners, there being a Court Receiver appointed in relation thereto. Secondly, the purchaser who was to pay the sum as agreed between him and the petitioners for purchasing an immovable property of the petitioners at Silvassa, backed out. Thirdly, when the bank enhanced the sum to Rs.72.50 lakhs and called upon the petitioners to accept the offer and communicate its acceptance and pay the balance sum within thirty days, the petitioners stated that it is not possible to accept or implement the OTS SRP 7/9 ::: Uploaded on - 07/10/2016 ::: Downloaded on - 08/10/2016 00:43:26 ::: WP2916.14.doc when the enhancement is made by the bank from Rs.65 lakhs to Rs.72.50 lakhs which offer was also not accepted unconditionally by the petitioners. They gave a counter proposal and a without prejudice acceptance. The petitioners clarify at page 59 of the paper-book that they accepted the enhanced OTS amount proposal without prejudice by addressing a letter on 12 th April, 2014. The petitioners also refer to the discussions and eventually concluded this letter by saying that they have no alternative, but to decline the offer of OTS contained in the letter dated 9 th April, 2014, addressed by the second respondent-bank.
10 We do not think that anything further is required to be referred and in details simply because we find that there was no proposal for one-time settlement on the record. If the stand of the petitioners contained in the letter is noted, it is apparent that beyond discussions, proposals and counter proposals, there was never a concluded arrangement and which can bind the parties. In the circumstances, we do not think that any fraud, as alleged, is perpetrated warranting any enquiry or investigation by the Reserve Bank of India into the affairs of SRP 8/9 ::: Uploaded on - 07/10/2016 ::: Downloaded on - 08/10/2016 00:43:26 ::: WP2916.14.doc the Central Bank of India or any writ of mandamus can be issued directing the respondent No.2-bank to accept the proposal of the petitioners for settlement. A writ of mandamus can be claimed and equally can be issued on the basis of an existing legal right. Once the petitioners do not have any such legal right, then, the writ petition is misconceived. It is, therefore, dismissed.
B.P. COLABAWALLA, J. ig S.C. DHARMADHIKARI, J.
SRP 9/9
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