Sri Nbt Zameer vs Canara Bank
2022 Latest Caselaw 3988 Kant

     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 09TH DAY OF MARCH, 2022

                            BEFORE

           THE HON'BLE MR. JUSTICE E.S. INDIRESH

      WRIT PETITION NO.12693 OF 2021 (GM-RES)

BETWEEN:

1. SRI NBT ZAMEER
S/O LATE N.B. BABU SAB
AGED ABOUT 71 YEARS
R/AT NBT MANSION
BESIDE TRAFFIC POLICE STATION
ROOM NO.2, BESIDE NBT HALL
CHITRADURGA 577 502

2. SMT. AYESHA MISBA
W/O MUDUSSAR NAZAR
AGED ABOUT 35 YEARS
R/AT NBT MANSION
BESIDE TRAFFIC POLICE
DAVANAGERE ROAD
CHITRADURGA 577 502

3. SRI N B MUDASSAR NAZAR
S/O SRI NBT ZAMEER
AGED ABOUT 40 YEARS
R/AT NBT MANSION
BESIDE TRAFFIC POLICE
DAVANAGERE ROAD
CHITRADURGA 577 502

4. SRI N B SADDAM NAWAZ
S/O SRI NBT ZAMEER
AGED ABOUT 29 YEARS
R/AT NBT MANSION
BESIDE TRAFFIC POLICE
DAVANAGERE ROAD
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CHITRADURGA 577 502
                                             ...PETITIONERS
(BY SRI P.V. CHANDRASHEKAR, ADVOCATE)

AND:

1. CANARA BANK
REPRESNETED BY ITS
AUTHORISED OFFICER
CHITRADURGA
HOLALKERE ROAD BRANCH
KANAKA CIRCLE
NEAR BALAJI BAKEREY
HOLALKERE
CHITRADURGA 577 501

2. THE ASSISTANT GENERAL MANAGER
CANARA BANK
ANJANEYA BADAVANE
DAVANAGERE

3. THE MANAGING DIRECTOR
CANARA BANK
J C ROAD, NO.112
BANGALORE 560 006

4. THE BRANCH MANAGER
CANARA BANK
HOLALKERE ROAD BRANCH
KANAKA CIRCLE
NEAR BALAJI BAKERY
HOLALKERE ROAD
CHITRADURGA 577 501
                                            ....RESPONDENTS
(BY SRI HEMANTH R RAO A/W
 SRI RUKKOJI RAO H.S., ADVOCATES)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISUE A WRIT OF
CERTIORARI QUASHING THE SALE NOTICE DATED 23.06.2021 VIDE
ANNEXURE-H AND J ISSUED BY THE RESPONDENT BANK; AND ISSUE
A WRIT OF MANDAMUS DIRECTING THE RESPONDENT TO CONSIDER
                                 3




THE REPREENTATION DATED 03.04.2021 PRODUCED AT ANNEXURE-
G; AND ETC.

     IN THIS WRIT PETITION ARGUMENTS BEING HEARD,
JUDGMENT RESERVED, COMING ON FOR "PRONOUNCEMENT OF
ORDERS", THIS DAY, THE COURT MADE THE FOLLOWING:

                           ORDER

This Writ Petition is filed by the petitioners calling in

question the sale notices dated 23rd June, 2021 (Annexure-H and

J) issued by the respondent-Bank and also sought for a writ of

mandamus seeking direction to respondent-bank to consider the

representation Annexure-G dated 03rd April, 2021.

2. Brief facts, for adjudication of this petition are that, the

respondent-Bank, pursuant to the request made by the

petitioners, sanctioned loan in a sum of Rs.25,00,000/- to the

petitioners and the petitioners, being borrowers of the loan,

deposited title deeds in respect of the schedule property. In the

meanwhile, petitioners approached the respondent-Bank for

acceptance of One-time Settlement as per the scheme of the

respondent-Bank and as such, the respondent-Bank accepted

the offer made by the petitioners for One-time settlement for

sum of Rs.18,00,000/- as per Annexure-D. The respondent-

Bank had reduced the maximum period of repayment at two

months and the petitioners have complied with payment of first

two terms of One-time settlement on payment of Rs.2,00,000/-

(through receipt) and Rs.6,00,000/- (through Demand Draft).

Thereafter, the business of the petitioners was affected due to

COVID-19 Pandemic and as such, approached the respondent-

Bank for additional time to pay the balance amount of

Rs.10,00,000/- (Annexure-G). The grievance of the petitioners

is that, the respondent-Bank, neither accepted the proposal for

extension of time nor rejected the same, but has put the assets

of the petitioners for auction to recover sum of Rs.13,64,484.31

by fixing reserve price to the property at Rs.35,00,000/-. It is

the case of the petitioners that the property in question worth

Rs.1,00,00,000/- which is around three times of the reserve

price and accordingly, the petitioners have challenged the sale

notices issued by the respondent-Bank in this writ petition.

3. On service of notice, the respondent-Bank entered

appearance and filed detailed written statement contending that

the writ petition itself is not maintainable as no sale had taken

place on the date of auction (23rd June, 2021). It is the case of

the respondent-Bank that the petitioners are willing to settle

dues through One-time settlement in sum of Rs.18,00,000/- and

same was accepted by the respondent-Bank subject to the

condition that the petitioners have to comply with the terms of

payment of One-time settlement. The respondent-Bank also

took up a contention that the petitioners have to approach the

competent authority under Section 17 of Securitisation and

Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 (for short, hereinafter referred to as the 'Act')

and accordingly, sought for dismissal of the Writ Petition.

4. I have heard Sri P.V. Chandrashekar, learned counsel

appearing for the petitioner and Sri Hemanth R. Rao along with

Sri Rukkoji Rao H.S., learned counsel appearing for the

respondent-Bank.

5. Sri P.V. Chandrashekar, learned counsel appearing for

the petitioners contended that though the respondent-Bank

accepted the One-time settlement, but due to unforeseen

situation of COVID-19 Pandemic, the petitioners were not able to

pay the remaining two instalments in time and as such, filed

representation dated 03rd April, 2021 (Annexure-G) seeking

extension of time and the same is pending consideration before

the respondent-Bank. In this regard, the learned counsel

appearing for the petitioners has filed Memo dated 17th

December, 2021 with details regarding the payment made to the

respondent-Bank. He further contended that there is no

impediment for the respondent-Bank to consider the

representation Annexure-G dated 03rd April, 2021.

6. Per contra, Sri Rukkoji Rao, learned counsel appearing

for the respondent-Bank, argued that the Writ Petition itself is

not maintainable and he further argued that One-time

settlement proposal is only an offer and the borrower has no

legitimate right to insist for acceptance of the One-time

settlement. He further argued that petitioners had availed

Canara Business Loan from Chitradurga Main Branch in the name

of NBT Convention Hall and same has not been disclosed at the

time of One-time Settlement application despite having

knowledge about the same and accordingly, he filed Memo dated

03rd March, 2022 stating that the petitioners are liable to pay a

sum of Rs.17,63,069.31 to the respondent-Bank. He further

contended that since the sale had not taken place in terms of

sale notice dated 23rd June, 2021, the writ petition has become

infructuous. He further contended that an efficacious remedy is

available to the petitioners under Section 17 of the Act and

therefore, Writ Petition is not maintainable. In support of his

submission, he relied upon the judgment of the Apex Court in

the case of THE BIJNOR URBAN CO-OPERATIVE BANK LIMITED,

BIJNOR AND OTHERS v. MEENAL AGARWAL AND OTHERS made

in Civil Appeal No.7411 of 2021 decided on 15th December, 2021

and the Division Bench judgment of this Court in the case of

MANNE GURU PRASAD v. PAVAMAN ISPAT PRIVATE LIMITED

AND OTHERS reported in AIR 2021 Kant. 155 and accordingly,

sought for dismissal of the Writ Petition.

7. Having heard the learned Counsel appearing for the

parties, I have carefully examined the writ papers. It is not in

dispute that the petitioners had availed loan from the

respondent-Bank. On perusal of writ papers it may be inferred

that the petitioners suffered loss in the business on account of

COVID-19 pandemic and as such, were not able to regularise the

loan account. In the meanwhile, the petitioners made

representation dated 05th January, 2021 (Annexure-B) to the

respondent-Bank requesting to accept the proposal for one-time

settlement. Pursuant to the same, the respondent-Bank

accepted the same subject to terms of payment as per

Annexure-D. In terms of the same, the petitioners made part

payment. However, the petitioners were not able to pay the

remaining two instalments referred to in Annexure-D and as

such, the respondent-Bank issued notice under Section 13(4) of

the Act and put the property in question to auction by issuing

impugned sale notices Annexure-H and J. In the meanwhile,

petitioners made representation dated 03rd April, 2021

requesting the respondent-Bank to provide an opportunity to

him to regularise the loan account. In view of the averments

made in the statement of objections, the respondent-Bank

stated that the auction had not taken place as per sale notices.

Apart from the factual aspects, the respondent-Bank has raised

preliminary objection relating to maintainability of the writ

petition. I find force in the submission made by the learned

counsel for the respondent-Bank to the effect that the petitioners

are having an efficacious remedy under the Act and that apart,

in terms of the law declared by the Hon'ble Apex Court in the

case of BIJNOR (supra), this Court cannot direct the respondent-

Bank to grant benefit of One-time settlement to the borrower

and the borrower cannot take plea that One-time settlement

benefit has to be extended as of right and in that view of the

matter, this Court is of the opinion that the Writ Petition is liable

to be dismissed, accordingly dismissed.

8. However, taking into consideration the factual aspects

of the case that the property in question is not sold in public

auction and the petitioner-borrowers having paid substantial

amount to the respondent-Bank to protect their property and

also considering the statement of account produced by the

respondent-Bank as per memo dated 03rd March, 2022, in my

considered opinion, there is no impediment for the respondent-

Bank to consider the representation Annexure-G dated 03rd April,

2021. Accordingly, the respondent-Bank shall consider the

representation dated 03rd April 2021 made by the petitioners and

intimate the outcome of the same to the writ petitioners. This

Court has not expressed any opinion on the merits of the case

and respondent-Bank is directed to consider the representation

Annexure-G dated 03rd April, 2021 independently, taking into

account the background of the case on merits and pass

appropriate orders in accordance with law, being an

instrumentality of the State under Article 12 of the Constitution

of India.

Sd/-

JUDGE

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