Kerala High Court

Radhamoni vs Reliance Asset Re-Construction ... on 18 January, 2023

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
                THE HONOURABLE MR. JUSTICE GOPINATH P.
    WEDNESDAY, THE 18TH DAY OF JANUARY 2023 / 28TH POUSHA, 1944
                       WP(C) NO. 42000 OF 2022
PETITIONERS:

   1    RADHAMONI
        AGED 66 YEARS
        KOCHUMALAYIL, MULLAKERI, PANMANA MALAYIL P.O.,
        KOLLAM DISTRICT, PIN - 689541

   2    SUNITHA P
        AGED 46 YEARS
        KOCHUMALAYIL, MULLAKERI, PANMANA MALAYIL P.O.,
        KOLLAM DISTRICT,, PIN - 689541

        BY ADVS.
        C.S.MANU
        T.B.SIVAPRASAD
        C.A.ANUPAMAN
        C.Y.VIJAY KUMAR
        DILU JOSEPH
        MANJU E.R.
        ANANDHU SATHEESH
        ALINT JOSEPH
        PAUL JOSE


RESPONDENTS:

   1    RELIANCE ASSET RE-CONSTRUCTION CO.LTD.,
        11 TH FLOOR, NORTH SIDE, R-TECH PARK, WESTERN EXPRESS
        HIGHWAY, GOREGAON (EAST), MUMBAI REPRESENTED
        BY ITS MANAGING DIRECTOR, PIN - 400063

   2    THE AUTHORISED OFFICER
        RELIANCE ASSET RE-CONSTRUCTION CO.LTD.,
        11 TH FLOOR, NORTH SIDE, R-TECH PARK,
        WESTERN EXPRESS HIGHWAY, GOREGAON (EAST), MUMBAI, PIN - 400063

   3    RESERVE BANK OF INDIA
        NO.6507, BAKERY JCT ROAD, NANDAVANAM,
        PALAYAM,THIRUVANANTHAPURAM, KERALA,
        REPRESENTED BY ITS GENERAL MANAGER, PIN - 695033

        BY ADVS.
        V.S.SHIRAZ BAVA .
        JOSEPH KURIAN VALLAMATTAM(K/603/2012)

     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
18.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 W.P (C) No.42000/2022                     -2-

                                  JUDGMENT

This writ petition has been filed challenging Ext.P3 by which the application

for one time settlement submitted by the petitioners has been rejected by

respondents 1 & 2.

2. The learned counsel for the respondents 1 & 2 would submit that in the

light of the judgment of the Supreme Court in Bijnor Urban Cooperative Bank

Ltd. and others v. Meenal Agarwal and others; AIR 2022 SC 56, the

prayers sought for in this writ petition cannot be granted as the question as to

whether any one time settlement is to be granted and if so on what terms is purely

within the domain of the respondents and the petitioner cannot insist that the one

time settlement proposal should be accepted.

3. Having heard the learned counsel for the petitioner and the learned

counsel appearing for the respondent bank, I am clearly of the opinion that the

present writ petition is not maintainable. One of the issues considered in Bijnor

Urban Cooperative Bank (supra) was whether the High Court in exercise of

powers under Article 226 of the Constitution of India can issue a writ of mandamus

directing the bank to positively consider the grant of benefit under the one time

settlement scheme and that too dehors the eligibility criteria under the said scheme.

Answering the said question the Supreme Court held as follows;

"What is required to be considered is a conscious decision by the Bank that the Bank will be able to recover the entire loan amount by auctioning the mortgaged property and a due application of mind by the Bank that there are all possibilities to recover the entire loan amount, instead of granting the benefit under the OTS Scheme and to recover a lesser amount. It is ultimately for the Bank to take a conscious decision in its own interest and

to secure/recover the outstanding debt. No bank can be compelled to accept a lesser amount under the OTS Scheme despite the fact that the Bank is able to recover the entire loan amount by auctioning the secured property/mortgaged property. When the loan is disbursed by the bank and the outstanding amount is due and payable to the bank, it will always take a conscious decision in the interest of the bank and in its commercial wisdom.

9. Even otherwise, as observed hereinabove, no borrower can, as a matter of right, pray for grant of benefit of One Time Settlement Scheme. In a given case, it may happen that a person would borrow a huge amount, for example Rs. 100 crores. After availing the loan, he may deliberately not pay any amount towards installments, though able to make the payment. He would wait for the OTS Scheme and then pray for grant of benefit under the OTS Scheme under which, always a lesser amount than the amount due and payable under the loan account will have to be paid. This, despite there being all possibility for recovery of the entire loan amount which can be realised by selling the mortgaged/secured properties. If it is held that the borrower can still, as a matter of right, pray for benefit under the OTS Scheme, in that case, it would be giving a premium to a dishonest borrower, who, despite the fact that he is able to make the payment and the fact that the bank is able to recover the entire loan amount even by selling the mortgaged/secured properties, either from the borrower and/or guarantor. This is because under the OTS Scheme a debtor has to pay a lesser amount than the actual amount due and payable under the loan account. Such cannot be the intention of the bank while offering OTS Scheme and that cannot be purpose of the Scheme which may encourage such a dishonesty.

10. If a prayer is entertained on the part of the defaulting unit/person to compel or direct the financial corporation/bank to enter into a one-time settlement on the terms proposed by it/him, then every defaulting unit/person which/who is capable of paying its/his dues as per the terms of the agreement entered into by it/him would like to get one time settlement in its/his favour. Who would not like to get his liability reduced and pay lesser amount than the amount he/she is liable to pay under the

loan account? In the present case, it is noted that the original writ petitioner and her husband are making the payments regularly in two other loan accounts and those accounts are regularised. Meaning thereby, they have the capacity to make the payment even with respect to the present loan account and despite the said fact, not a single amount/installment has been paid in the present loan account for which original petitioner is praying for the benefit under the OTS Scheme.

11. The sum and substance of the aforesaid discussion would be that no writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower. The grant of benefit under the OTS is always subject to the eligibility criteria mentioned under the OTS Scheme and the guidelines issued from time to time. If the bank/financial institution is of the opinion that the loanee has the capacity to make the payment and/or that the bank/financial institution is able to recover the entire loan amount even by auctioning the mortgaged property/secured property, either from the loanee and/or guarantor, the bank would be justified in refusing to grant the benefit under the OTS Scheme. Ultimately, such a decision should be left to the commercial wisdom of the bank whose amount is involved and it is always to be presumed that the financial institution/bank shall take a prudent decision whether to grant the benefit or not under the OTS Scheme, having regard to the public interest involved and having regard to the factors which are narrated hereinabove."

Having regard to the facts and circumstances of the case and considering the

law laid down in Bijnor Urban Cooperative Bank (supra), the relief sought

for in this writ petition cannot be granted. Writ petition fails and it is accordingly

dismissed.

Sd/-

GOPINATH P.

JUDGE AMG

APPENDIX OF WP(C) 42000/2022

PETITIONER EXHIBITS

Exhibit P-1 A TRUE COPY OF THE NOTICE DATED 28-11-2019 ISSUED BY THE 2 ND RESPONDENT TO THE PETITIONER

Exhibit P-2 A TRUE COPY OF THE SAID REPRESENTATION DATED 26-10-

2022 SUBMITTED BY THE PETITIONERS AND 2 OTHERS TO THE 2 ND RESPONDENT