Kerala High Court
Joy Kuriakose vs Axis Bank on 22 January, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 22ND DAY OF JANUARY 2021/2ND MAGHA, 1942
WP(C).No.18354 OF 2020(T)
PETITIONER:
JOY KURIAKOSE,
AGED 52 YEARS,
PROPRIETOR, MALANADU RUBBERS,
R/AT.PYMPALLI HOUSE,
KARINKUNNAM, IDUKKI-685586.
BY ADVS.
SRI.P.BABU KUMAR
SRI.P.YADHU KUMAR
SRI.VISHNU BABU
RESPONDENTS:
1 AXIS BANK,
REP. BY BRANCH MANAGER,
THODUPUZHA BRANCH,
THODUPUZHA P.O.,
IDUKKI-685581.
2 RESERVE BANK OF INDIA,
REP. BY REGIONAL MANAGER,
REGIONAL OFFICE,
KALOOR, KOCHI-682018.
3 UNION OF INDIA,
REP. BY SECRETARY TO BANKING,
CENTRAL SECRETARIAT,
NEW DELHI-110001.
ADDL. 4 THE NATIONAL CREDIT GUARANTEE
TRUSTEE COMPANY LIMITED,
G BLOCK BKC, BANDRA KURLA COMPLEX,
BANDRA EAST, MUMBAI,
MAHARASTRA-400 051
IS SUO MOTU IMPLEADED AS PER ORDER DATED
11/12/2020 IN WP(C)No.18354/2020(T)
WP(C) No.18354/2020
:2 :
R1 BY ADV. SRI.MADHU RADHAKRISHNAN, SC
R3 BY ADV. SHRI.P.VIJAYAKUMAR, ASG OF INDIA
SMT. SUMATHI DANDAPANI (SR) SC FOR RBI (B/O)
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 22.01.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C) No.18354/2020
:3 :
JUDGMENT
~~~~~~~~~
Dated this the 22nd day of January, 2021
The petitioner, Proprietor of a business, is before
this Court aggrieved by the action of the 1 st respondent-Bank
withholding benefits of Emergency Credit Line Guarantee
Scheme (ECLGS) to the petitioner. The petitioner seeks to
command the 2nd respondent to implement the Scheme by
issuing necessary directions.
2. The petitioner states that he is a businessman and
holds an account with the 1st respondent-Bank. In the month
of April, the Reserve Bank of India announced a special
Scheme to help the entrepreneurs who were affected by the
lockdown declared by the Government. The Scheme is called
Emergency Credit Line Guarantee Scheme (ECLGS) and the
petitioner submits that he is entitled to ₹46 lakhs as loan
under the Scheme. Though the Bank has sanctioned ₹46
WP(C) No.18354/2020
lakhs to the petitioner under the Scheme, the petitioner was
permitted to utilise only an amount of ₹17.75 lakhs. The
balance amount, which is more than ₹28 lakhs, has been
appropriated by the Bank towards dues to them. The
petitioner would submit that the ECLGS has been framed in
view of the peculiar financial circumstance in the country and it
is intended to provide working capital to entrepreneurs. The
Bank has no authority to appropriate any amount from the
working capital loan so provided, towards any dues to the
Bank. Therefore, the 1st respondent is bound to pay the
petitioner the balance amount of about ₹28 lakhs.
3. The learned Standing Counsel appearing for the 1 st
respondent filed statement and additional statement and
strongly resisted the contentions of the petitioner. The
Standing Counsel submitted that whatever appropriation was
made by the Bank, it was with the concurrence of the
petitioner only. Had the Bank did not appropriate such
amounts towards the dues of the petitioner, the petitioner
would have been put to more grave situation and his account
WP(C) No.18354/2020
would have been turned into a NPA.
4. The learned Standing Counsel further pointed out
that the petitioner has already approached a Consumer Forum
and obtained interim orders against his accounts being
declared as NPA. After getting the interim order from the
Consumer Forum restraining the 1 st respondent-Bank from
declaring his accounts as NPA, the petitioner has approached
this Court to get more money.
5. As per the directions of this Court, the Assistant
Solicitor General of India filed a statement on behalf of the
additional 4th respondent-National Credit Guarantee Trustee
Company Limited. Paragraph 6 of the statement would make
it clear that deduction from the ECLGS advances by the
Money Lending Institutions is permissible under the Scheme
only if the same is agreed between the borrower and the
lender and not otherwise.
6. Heard learned counsel for the petitioner, learned
Standing Counsel for the 1st respondent and learned ASGI
representing the 3rd respondent and the additional 4th
WP(C) No.18354/2020
respondent.
7. In view of the statement filed on behalf of the
additional 4th respondent, which is the National Credit
Guarantee Trustee Company Limited, it is evident that no
amount can be deducted from the ECLGS loan advanced to
entrepreneurs towards any dues of the Bank without
concurrence of the entrepreneur concerned. The learned
counsel for the 1st respondent pointed out that as is evident
from Ext.R1(a), which was issued as early on 09.07.2020,
amounts were deducted from the ECLGS loan sanction as
agreed by the petitioner. In the additional statement filed by
the 1st respondent also, the learned counsel asserted that the
petitioner has not disputed the fact that deductions were made
with his concurrence. In such circumstances, the petitioner is
not entitled to any relief. The learned Standing Counsel for
the 1st respondent would further submit that in the event of a
positive direction being given by this Court to disburse the
entire amount of sanctioned ECLGS loan, the petitioner will be
losing the benefits of credit made by the Bank which may
WP(C) No.18354/2020
ultimately cause more damage to the petitioner.
8. It is to be noted that the Emergency Credit Line
Guarantee Scheme has been framed to enable the
entrepreneurs to survive the grave financial situation existing
in the country. This Scheme is intended to make available
cash flow to entrepreneurs so that they shall survive the
financial emergency and take steps to sustain their business.
In such circumstances, without expressed concurrence of the
entrepreneurs, the Money Lending Institutions are not
expected to make deductions from the ECLGS loan. In
Ext.R1(a) letter issued by the 1 st respondent to the petitioner,
the Bank has stated that it is as agreed by the petitioner that
deductions are made. However, it is to be noted that
Ext.R1(a) was issued on 09.07.2020 and the petitioner
approached this Court with the grievance on 24.08.2020.
Therefore, this Court is inclined to believe that the deductions
were not made with the concurrence of the petitioner.
In such circumstances, the writ petition is disposed
of directing the 1st respondent to make available to the
WP(C) No.18354/2020
petitioner the balance amount due to him under the
Emergency Credit Line Guarantee Scheme, after adjusting
interest, if any, that may be required to be done due to
re-adjustment of accounts.
Sd/-
N. NAGARESH, JUDGE
aks/22.01.2021
WP(C) No.18354/2020
APPENDIX
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE OPERATIONAL GUIDELINE
OF THE EMERGENCY CREDIT LINE GUARANTEE
SCHEME AND MORATORIUM.
EXHIBIT P2 TRUE PHOTOCOPY OF THE COMPLAINT DATED
14.07.2020 FILED TO THE COMPLAINT
CELL.
EXHIBIT P3 TRUE COPY OF THE INTIMATION DATED
30.07.2020 ISSUED BY THE 1ST
RESPONDENT.
EXHIBIT P4 TRUE PHOTOCOPY OF THE REPLY DATED
17.08.2020.
EXHIBIT P5 TRUE PHOTOCOPY OF THE STATEMENT OF
ACCOUNT.
EXHIBIT P6 TRUE COPY OF THE LETTER DATED 16-11-
2020 ISSUED FROM FEDERAL BANK,
KARINKUNNAM BRANCH
EXHIBIT P7 TRUE PHOTOCOPY OF THE LETTER DATED 10-
11-2020 ISSUED FROM STATE BANK OF
INDIA, KARINKUNNAM BRANCH.
RESPONDENTS' EXHIBITS:
EXHIBIT R1(A) TRUE COPY OF THE LETTER DATED 9.7.2020
COMMUNICATING THE SANCTION OF THE
ECLGS.
EXHIBIT R1(B) TRUE COPY OF THE CIRCUAR ISSUED BY THE
2ND RESPONDENT DATED MARCH 27,2020
EXHIBIT R1(C) TRUE COPY OF THE SANCTION LETTER DATED
11.6.2019 (RENEWAL)ALONG WITH TERMS
EXHIBIT R1(D) TRUE COPY OF THE BALANCE SHEET OF THE
PETITIONER
EXHIBIT R1(E) TRUE COPY OF THE LETTER DATED
16.1.2020 ISSUED TO THE INDIAN
OVERSEAS BANK
WP(C) No.18354/2020
EXHIBIT R1(F) TRUE COPY OF THE LETTER DATED
16.1.2020 ISSUED BY THE 1ST RESPONDENT
TO THE STATE BANK OF INDIA
EXHIBIT R1(G) TRUE COPY OF THE LETTER DATED
16.1.2020 ISSUED BY THE 1ST RESPONDENT
TO THE FEDERAL BANK LTD.
EXHIBIT R1(H) A TRUE COPY OF THE ORDER PASSED BY TEH
CDRF RESTRAINING DECLARATION OF NPA OF
THE OD ACCOUNT OF THE PETITIONER AND
FURTHER RESTRAINING ANY RECOVERY
PROCEEDINGS.
SR
