Bombay High Court
Kalpak Polyplastic Indusrites ... vs The State Of Maharashtra And 3 ... on 5 October, 2016
Bench: S.C. Dharmadhikari
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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WP2916.14.doc
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
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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
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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
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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
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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
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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
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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
