Deluxe Electrical And Mechanical ... vs Union Of India (Uoi) And Ors.
2004 Latest Caselaw 441 Del

JUDGMENT

Manmohan Sarin, J.

1. By this writ petition, order or direction for quashing of the order dated 27.12.2003 (Annexure P-14) by respondent no.4-bank is sought. Annexure P-14 is a letter dated 27th December, 2003 by which respondent no.4-bank informed the petitioner of rejection of its proposal under RBI "One Time Settlement" Scheme. The impugned letter notices the DICGC rejection of claim due to diversion of funds and mismanagement vide their letter dated 12.9.2000. Petitioner accordingly was termed as "willful defaulter" and not eligible under the one time settlement scheme of RBI.

2.Learned counsel for the petitioner, Mr.Pallav Shishodia submits that respondent no.4-bank itself has issued a notice dated 25.2.2003, whereby a compromise offer for one time settlement was called for. Reliance is also placed on page 18 of paper book, whereby while considering the offers made by the petitioner vide its letters dated 17.9.2002 and 23.9.2002, bank while intimating that request made under the said letters cannot be considered, advised the petitioner to improve its offer. Learned counsel for the petitioner submits that even though decree was passed on 22.1.2003, communication dated 25.2.2003 was made by respondent no.3 subsequent to that by which they informed the petitioner about the RBI guidelines and invited one time settlement.

3.Mr.Saran Suri, Learned counsel for respondent no.3 submits that letter dated 25.2.2003 was sent to all in routine as there was little time left to comply with RBI guidelines. Learned counsel for the petitioner contends that account was termed doubtful and NPA as far back in 1989-90 and after an expiry of 18 months, petitioner account was liable to be treated as sub-standard and interest could not be charged from that time in terms of RBI guidelines. In the meantime, suit was instituted by respondent no.3-bank on 29.5.1992 for recovery of Rs.11,13,467.84. The suit was decreed on 22.1.2003 in the sum of Rs.36,34,710/-. The revised guidelines on which reliance is placed by the petitioner are dated 29.1.2003. The case of respondents is that the guidelines dated 29.1.2003 do not apply to cases where suits have been decreed.

4.The question whether guidelines would apply to cases where decrees have been passed, was considered by the High Court of Mumbai in writ petition no.973/2003 titled Chemosyn Limited & anr Vs. Union Bank of India & anr. The Reserve Bank of India clarified its position with regard to the guidelines:-

"These guidelines do not cover the cases where decrees have already been passed. The objective of the RBI guidelines is to provide a fast track channel of recovery of NPAS. Whereas in the case of decreed debts, the banks can straightaway execute the same and recover their dues. In the case of decreed debts the question of compromise/ settlement does not arise."

While interpreting the circular, the court also held that:-

" In the case where decree has already been passed, the banks can straightaway execute the same and recover the dues and therefore, the said circular dated 29th January, 2003 does not cover the cases where decrees have already been passed."

5.This apart respondent no.3 case is that petitioner has been willful defaulter as notified vide its letter dated 7.11.2003. Respondent no.3-bank vide letter dated 27.12.2003 intimated the petitioner that DICGC had rejected its claim due to diversion of funds and mismanagement vide letter dated 12.9.2000 and therefore termed petitioner as "willful defaulter" and not eligible under one time settlement scheme of RBI. Learned counsel for the petitioner states that the petitioner did not receive any communication from DICGC.

6.From the foregoing narration of facts, it would be seen that the petitioner apart from having suffered decree prior to the coming into force of guidelines of 29.1.2003, respondent no.3 has already recorded it as willful defaulter.

7.It is sufficient to notice that even during the course of proceedings in this writ petition while the petitioner was seeking stay of the execution in which its factory was to be auctioned, the court had put to the counsel whether the petitioner was in a position to make some deposit to establish its bonafide and capacity to make payments. Petitioner at this stage where there is a decree of Rs.36 lakhs and above against him is only in a position to offer one time settlement of Rs.7 lakhs which had initially been offered which respondent no.3 found it not eligible for "one time settlement". Counsel for the petitioner states that Rs.2.05 lacs approx. was paid earlier, he would now pay another Rs.2 lacs and balance out of lacs in another Installment.

8. From the aforesaid, it appears to me that attempt at any out of court settlement is not feasible in the present circumstances. Since the petitioner has been found not eligible under the guidelines of 29.1.2003, the suit having been already decreed, prior to the said date, no ground is made out for interference in the exercise of writ jurisdiction.

Writ petition is dismissed.