Anvardeen K vs Union Of India
2021 Latest Caselaw 5003 Ker

             IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

          THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

                                 &

             THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

    THURSDAY, THE 11TH DAY OF FEBRUARY 2021 / 22ND MAGHA,1942

                         WA.No.312 OF 2021

   AGAINST THE JUDGMENT IN WP(C) 22084/2020(I) OF HIGH COURT OF
                              KERALA


APPELLANT/PETITIONER:

             ANVARDEEN K.
             AGED 44 YEARS
             S/O.KAMARUDEEN, PROPRIETOR, GREEN VALLEY BIO TECH,
             TISSUE CULTURE LAB AND NURSERY, PYARI MANZIL,
             ERATTUPOTTA, POTHAMPADAM, MUTHALAMADA POST, CHITTUR
             TALUK, PALAKKAD DISTRICT - 678 507.

             BY ADVS.
             SRI.SAJAN VARGHEESE K.
             SRI.LIJU. M.P
             SRI.JOPHY POTHEN KANDANKARY

RESPONDENTS/RESPONDENTS & NON-PARTY:

      1      UNION OF INDIA
             MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES,
             UDYOG BHAVAN, NEW DELHI - 110 001, REPRESENTED BY THE
             SECRETARY.

      2      THE SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA,
             IV FLOOR, ATMARAM HOUSE, TOLSTOY MARG, NEW DELHI -
             110 001.

      3      THE INDIAN OVERSEAS BANK
             REGIONAL OFFICE, VETTUKATTIL BUILDINGS, V FLOOR, JOSE
             JUNCTION, MG ROAD, ERNAKULAM - 682 016
             REPRESENTED BY THE MANAGER.

      4      INDIAN OVERSEAS BANK
             GB ROAD, PALAKKAD - 678 001, REPRESENTED BY THE
             SENIOR MANAGER.

      5      CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL
             ENTERPRISES (CGTMSE)
 WA.No.312 OF 2021                 2



             7TH FLOOR, SIDBI, SWAVALAMBAN BHAVAN, C-11,
             G-BLOCK, BKC (BANDRA KURLA COMPLEX), BANDRA EAST,
             MUMBAI - 400 051, REP. BY THE CHIEF EXECUTIVE
             OFFICER.




             SRI.P.VIJAYAKUMAR ASG FOR R1,
             SRI. SUNIL SHANKER, STANDING COUNSEL FOR R3 AND R4

     THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
11.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WA.No.312 OF 2021                          3




                                 JUDGMENT

Dated this the 11th day of February 2021

SHAJI P.CHALY,J.

This writ appeal is filed by the petitioner in the writ petition, challenging

the judgment of the learned Single Judge in W.P.(C) No.22084/2020 dated

24.11.2020, whereby the learned Single Judge dismissed the writ petition

holding that appellant cannot have any right to insist for any direction to the

bank to allow his request or to the benefit of the scheme to him when the

competent authorities have found that he is not eligible for the scheme. It is

thus challenging the legality and correctness of the judgment, this appeal is

preferred.

2. Brief material facts for the disposal of the writ appeal are as follows;

appellant is the proprietor of a Micro, Small & Medium Enterprise by name

Green Valley Bio Tech, which is situated in Muthalamada Village, Palakkad

District. It is a tissue culture lab and nursery, which was started in the year

2014 and it is engaged in developing tissue culture. According to the appellant,

the unit has got good turnover, however, it requires utmost care and caution

on a day to day basis at every stage of the tissue culture operations, failing

which, the plant would be infected by bacteria and fungus and the entire

process and the premises is conducted in an air conditioned and hygienic

atmosphere. Anyhow due to the lock down imposed by the Government of

India on 23rd March, 2020 on account of COVID - 19 pandemic, it could be re-

opened during the first week of June, 2020. According to the appellant, by that

time the entire tissue culture was lost. The issue relates to the four loans

availed by the appellant from the Indian Overseas Bank, Ernakulam, 3 rd

respondent, in connection with the said business activity. The case of the

appellant is that the calamity of 2018 and 2019 and the COVID-19 has put the

appellant in various difficulties and disadvantaged position and therefore, the

repayment was defaulted. Therefore, according to the appellant, appellant was

entitled to the scheme launched by the Government of India viz., "Distressed

Assets Fund-Subordinate Debt for Stressed MSMEs" and the credit product for

which guarantee would be provided under the scheme was named as "Credit

Guarantee Scheme for Subordinate Debt" (CGSSD), evident from Exhibit P7. It

is the submission of the appellant that the ultimate aim of the said scheme is

to tender financial assistance to stressed MSMEs and therefore, the appellant

is entitled to get the benefit of the scheme and with that the bank was

approached, evident from Exhibit P6 letter dated 9.7.2020 for further financial

assistance.

3. On the basis of financial assistance sought for by the appellant Exhibit

P7 communication dated 28.7.2020 was issued by the bank directing the

appellant to produce certain documents for its perusal and according to the

appellant, all documents were made available to the bank. Though the

appellant issued a reminder, no action was initiated and ultimately as per

Exhibit P10 communication, the request made by the appellant was rejected

holding that the appellant shall concentrate in improving the business and also

make timely repayment of the loans already existing. Anyhow thereafter the

appellant has submitted Exhibit.P11 representation but no action was initiated,

which persuaded the appellant to approach this Court by filing the writ

petition.

4. The paramount contention advanced in the appeal is that the

respondent bank has failed to interpret the provisions of the scheme in the

manner required so as to extend the benefit of the scheme to the needy in the

stressed circumstances. However, the bank was of the opinion that the

appellant's unit was not a stressed one and accordingly the benefit was

denied. Anyhow the learned Single Judge has gone through the scheme

extensively and found that the appellant is not entitled to get the benefit of the

scheme and therefore, the bank was not at fault in rejecting the claim raised

by the appellant on the basis of the scheme launched to meet with the adverse

circumstances.

5. We have heard learned counsel for appellant Sri.Sajan Varghese,

learned counsel for the respondent bank Sri.Sunil Shankar, counsel

representing Assistant Solicitor General of India Sri.P.Vijayakumar and perused

the pleadings and materials on record.

6. The sole question emerges for consideration is whether any manner

of interference is warranted to the judgment of the learned Single Judge ?

We have gone through Exhibit P5 scheme launched by the Government of

India to extend the Credit Guarantee for Subordinate Debt (CGSSD) for the

Micro, Small & Medium Enterprises. On a reading of Exhibit P5 it is clear that

the purpose of the scheme was to provide guarantee in respect of credit

facilities extended by eligible and registered scheduled commercial banks to

borrowers in Micro, Small & Medium Enterprises. The purpose of the scheme

was to provide guarantee coverage for the CGSSD and to provide Sub-Debt

support in respect of restructuring of MSMEs. Clause 5(v) of the scheme deals

with eligible borrower to mean that, the promoters of MSME units which are

stressed viz., SMA-2 and NPA accounts as on 30.4.2020 and can become

commercially viable as per the assessment of the lending institutions. Further

the scheme is applicable for those MSMEs whose accounts have been standard

as on 31.3.2018 and have been in regular operations either as a standard

accounts ir as NPA accounts during the financial year 2018-2019 and financial

year 2019-2020. However, it was made clear that fraud accounts and wilful

defaulters will not be considered under the proposed scheme and in case

where recovery proceedings are underway and banks assess that with the

facilities provided under the scheme the account would be viable, the banks

shall withdraw the recovery proceedings before going ahead with restructuring

etc. In fact the request made by the appellant was declined as per Exhibit

P10 communication dated 17.9.2020, which reads thus:

         "                        Indian Overseas Ban
                              G.B.Road, Palakkad 678 001
        To
        Shri Anvardeen K
        Proprietor:M/s.Green Valley Biotech
        3/726, Erattupotta, Pothampadam
        Muthamamada, Palakkad 678 507

    Sir,

Please refer to your request for sanctioning of credit facility under Subordinate Debt Scheme. In this regard, we wish to advice that there is no apparent stress on your account based on the audited financials as on 31.03.2019 and 31.03.2020 with the firm making consistent profits, adequate cash flows and solvency and liquidity ratios at acceptable levels.

Being so, we advice you to please concentrate on improving your business and turnover in cash credit account and also make timely and prompt repayament of loans. In this connection, we request your attention to our reminders for clearing the overdue portion which we observe as follows,

Credit facility/sanctioned limit Balance outstanding Overdue/Irregularity CC-PUB 006802000001786 1500000 No operation in the account Term Loan 551400001 463962 Overdue 63801/-

Term Loan 006803603000002 1544210 Overdue 164234/-

     Subhagruha            HL           1815019               Overdue 130238/-
     006803351300007


    Yours faithfully,

        Sd/-
    Senior Manager
    17.09.2020   "

7. In sum and substance the bank relied upon clause 8.1 of the scheme

and found that the unit of the appellant is not a stressed one and therefore,

not eligible to get the benefit of the scheme. Anyhow the learned Single

Judge has appreciated the circumstances taking into account the fact

situations put forth by the appellant and elaborately appreciating the scheme,

evident from Exhibit P5 and found that appellant is not an eligible person in

accordance with the scheme consequent to the reasons assigned thereunder.

It was accordingly found that the bank was not liable to extend assistance to

the appellant on the basis of Exhibit P5 scheme and it was accordingly that the

writ petition was dismissed.

8. We have evaluated the rival submissions made across the Bar and

gone through Exhibit P5 scheme extensively and found that the appellant is

not entitled to get the benefit of the scheme since the unit of the appellant

was not a stressed one. In fact the appellant has not produced any

documents either before the writ court or this Court to establish otherwise

than what is stated in Exhibit P10 letter issued by the bank. It is also clear that

the bank had filed a statement before the learned Single Judge explaining

the circumstances under which the bank happened to issue Exhibit P10 letter.

9. Taking into account all the above aspects, we are of the considered

opinion that the appellant has not made out any case justifying interference in

an intra court appeal filed under section 5 of the Kerala High Court Act there

being no jurisdictional error or other legal infirmities.

Resultantly writ appeal fails, accordingly it is dismissed.

Sd/-

S.MANIKUMAR

CHIEF JUSTICE

Sd/-

                                                     SHAJI P.CHALY

smv                                                          JUDGE