HON'BLE MRS JUSTICE SUREPALLI NANDA
WRIT PETITION No.27935 of 2023
ORDER:
Heard Mr.S.V.Ramana, learned counsel appearing on behalf of petitioner and Mr.M.Hamsa Raju, learned Standing Counsel for TSSFC, appearing on behalf of respondent Nos.1 and 2.
PERUSED THE RECORD
2. The petitioner approached the Court seeking the prayer as follows:
"to issue an appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus declaring unilaterally the arbitrary and high handed action of the 2nd respondent in and to recovery of amount Rs.1,19,86,923/- as arrears from the petitioner unit and to seize up, situated at Plot No.44/B, Sy.No.228/9, TSIIC, Kucharam Industrial Park, Kucharam Village, Manoharabad Mandal, Medak District and consequently direct the respondents refrain from taking further action for seize of the unit until the OTS application is considered and disposed of on merits."2
SN,J WP_27935_2023
3. A bare perusal of the contents of the representation made by the petitioner, dated 25.09.2023 addressed to the respondent No.2 indicates that, the petitioner made a request for one time settlement of his term loan account number 76172901 with respondent's bank explaining the financial difficulties faced by the petitioner due to the Covid-19 pandemic and untimely release of payments from his suppliers (Pharmaceuticals). The petitioner is the first gen entrepreneur and had started this manufacturing facility with good intention however, could not recover from Covid-19 phase and again get back on track and hence, requested to treat petitioner's case as special case and to permit the petitioner to pay complete principal amount of Rs.1,62,00,000-00 and also requested for waiver of interest due and penalties to the 2nd respondent herein and the petitioner also in the said representation specifically stated that the petitioner is willing to pay within stipulated time and also assures to pay remaining principal amount if some reasonable time is provided to the petitioner. But however, the request of the petitioner was rejected vide proceedings Ref.No.AFC/RCP/2023-24/701, dated 26.09.2023 and same is 3 SN,J WP_27935_2023 challenged by the petitioner before this Court on the ground that the petitioner's representation seeking one time settlement and also the reasons making such a request was not considered at all and the impugned proceedings dated 26.09.2023 have been passed unilaterally.
4. A bare perusal of the Order impugned vide Ref.No.AFC/RCP/2023-24/701, dated 26.09.2023 indicates that the petitioner's Term Loan Account was not eligible for One-Time Settlement as per the norms of the Corporation since the petitioner's unit was downgraded to doubtful category on 30.09.2022 and OTS can be permitted under the rules only after 2 years from the date of the unit being downgraded to doubtful category and further petitioner was advised to clear off the arrears pertaining to his term loan account at the earliest.
5. The learned Counsel appearing on behalf of respondents brings on record the Judgment of the Apex Court in the Supreme Court Of India Civil Appellate Jurisdiction Civil Appeal No.7411 of 2021 in between The Bijnor Urban Cooperative Bank vs. Meenla Agarwal, dated 15.12.2021, 4 SN,J WP_27935_2023 and placed reliance in particular to paragraph No.11 of the said Judgment, which reads as under:
"11. The sum and substance of the aforesaid discussion would be that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower. The grant of benefit under the OTS is always subject to the eligibility criteria mentioned under the OTS Scheme and the guidelines issued from time to time. If the bank/financial institution is of the opinion that the loanee has the capacity to make the payment and/or that the bank/financial institution is able to recover the entire loan amount even by auctioning the mortgaged property/secured property, either from the loanee and/or guarantor, the bank would be justified in refusing to grant the benefit under the OTS Scheme. Ultimately, such a decision should be left to the commercial wisdom of the bank whose amount is involved and it is always to be presumed that the financial institution/bank shall take a prudent decision whether to grant the benefit or not under the OTS Scheme, having regard to the public interest involved and having regard to the factors which are narrated hereinabove."
6. The view of the Apex Court in the above said Judgment is that no writ of Mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India directing a financial institution/bank to positively grant the benefit of OTS to a borrower, the grant of benefit under the OTS is always subject to the eligibility criteria mentioned 5 SN,J WP_27935_2023 under the OTS Scheme and the guidelines issued from time to time.
7. Taking into consideration the above referred facts and circumstances of the case and the view taken by the Apex Court in Bijnor Urban Co-operative Bank v Meenla Agarwal, dated 15.12.2021 on the point that no writ of Mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India directing a financial institution/bank to positively grant the benefit of OTS to a borrower, this Court opines that in view of the specific plea of the petitioner in the representation, dated 25.09.2023 that, the petitioner is willing to pay 25% of the principal amount within a stipulated time and the request of the petitioner to permit the petitioner to pay the principal amount in full without interest and penalties and to provide for a one-time settlement of petitioner's term loan account No.76172901 with petitioner's bank, this Court opines that the respondents herein should re-consider the whole issue afresh again without 6 SN,J WP_27935_2023 reference to the letter dated 26.09.2023 of the 2nd respondent herein vide Ref: AFC/RCP/2023-24/701, and accordingly the respondents are directed to re- consider petitioner's representation dated 26.09.2023 for one-time settlement of Term loan afresh again within a period of three (3) weeks from the date of receipt of the copy of the order as a special case by giving reasonable opportunity of hearing to the petitioner by giving due notice to the petitioner considering the Covid circumstances due to which the petitioner failed to conduct his business and fell into losses and serious financial problems in accordance to law and pass appropriate orders duly communicating the decision to the petitioner. Till such exercise as stipulated by this Court is undertaken by the respondents and appropriate orders passed duly re-considering petitioner's representation dated 26.09.2023 within the time period of three weeks from the date of receipt of the copy of the order as stipulated by this Court in the present order, the respondents shall not initiate any coercive steps against the 7 SN,J WP_27935_2023 petitioner in pursuance to E-mail dated 22.09.2023 of the 2nd respondent addressed to the petitioner herein to seize the petitioner unit.
8. With these observations, the Writ petition is disposed of. However, there shall be no order as to costs.
Miscellaneous petitions, if any, pending shall stand closed.
__________________________ MRS JUSTICE SUREPALLI NANDA Date: 6th October, 2023 ksl 8 SN,J WP_27935_2023 THE HON'BLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION No.27935 of 2023 DATED:06.10.2023 Date: 6th October, 2023 ksl