Madras High Court
M/S.Amaravathi Spinning Mills vs 2 The Authorized Officer on 8 July, 2021
W.P.Nos.12716 and 12718 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 08.07.2021
CORAM :
THE HON'BLE MR.SANJIB BANERJEE, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
W.P.Nos.12716 and 12718 of 2021
W.P.No.12716 of 2021
1 M/s.Amaravathi Spinning Mills
(RJPM) Pvt.Ltd Rep.by its Director
Mr.S.Murugan Having its Office at No.1-B Doshi
Residency 17 Dhandapani Street T.Nagar
Chennai- 600 017. ... petitioner
Vs
1 The Registrar
Debts Recovery Tribunal
Coimbatore- 641 018.
2 The Authorized Officer
State Bank of India Stressed Assets
Management Branch 1112 Raja Plaza
Avinashi Road Coimbatore- 641 037. ... respondents
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Mandamus or direction to extend the time till the
lockdown is lifted by the Government of Tamil Nadu due to the
pandemic to deposit the sum of Rs.5.00 Crores to the 2nd Respondent
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W.P.Nos.12716 and 12718 of 2021
bank pursuant to the order passed in I.A.No.1453 of 2021 in
S.A.No.344 of 2021 dated 19.05.2021 by considering the petitioners
representation dated 30.05.2021 and for consequential order.
W.P.No.12718 of 2021
M/s.S.Sri Venkatramana Paper Mills Pvt. Ltd.,
rep.by its Director,
Mr.S.Murugan,
having office at No.1-B, Doshi Residency,
17, Dhandapani Street,
T.Nagar, Chennai 17 ... petitioner
Vs
1 The Registrar
Debts Recovery Tribunal
Coimbatore- 641 018.
2 The Authorized Officer
State Bank of India Stressed Assets
Management Branch 1112 Raja Plaza
Avinashi Road Coimbatore- 641 037. ... respondents
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Mandamus or direction to extend the time till the
lockdown is lifted by the Government of Tamil Nadu due to the
pandemic to deposit the sum of Rs.15.00 Crores to the 2nd
Respondent bank pursuant to the order passed in I.A.No.1449 of 2021
in S.A.No.342 of 2021 dated 19.05.2021 by considering the petitioners
representation dated 19.05.2021 and for consequential order.
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W.P.Nos.12716 and 12718 of 2021
For Petitioners : Mr.V.Raghavachari,
for Mr.B.Jayaprakash
For Respondents : Mr.M.L.Ganesh,
for 2nd respondent
COMMON ORDER
(made by the Hon'ble Chief Justice)
The petitions are completely misconceived and judicial
pronouncements not applicable to the facts have been cited to obtain
an undue advantage by admitted borrowers who have failed to repay
the respondent bank and has even failed to honour the one-time
settlement (for short, OTS) terms offered by the bank. The excuse
proffered is the pandemic.
2. The petitioners say that even if the petitioners are offered a
few months’ time to comply with the OTS terms, it may be possible to
pay off the amounts demanded by the bank. The petitioners claim that
they run export businesses and almost the entire export industry has
been completely shut for the last 16 months or so with little prospect
of the business reviving in the immediate future. The petitioners say
that in order to ensure that the debts are discharged, the petitioners
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W.P.Nos.12716 and 12718 of 2021
need some time to arrange their affairs so as to give a closure to the
unsavoury relationship with the bank.
3. When the petitions were received, an order was made on June
16, 2021 that the bank should take a lenient view, considering the
present circumstances. However, the order also recorded that,
ordinarily, the court should not interfere in such matters and grant
extension of time to the petitioners before it since identical terms are
extended by banks such as the State Bank to several similarly placed
borrowers and it would be unfair to the rest of the borrowers if time
were to be extended for one borrower merely because it had
approached the court.
4. It is in such light that the bank was left free to consider the
matter, with a request to take a lenient view and with the observation
that if the terms of the OTS were to be modified, they should be
modified in respect of all constituents and not only for the present
petitioner.
5. There is no doubt that the authority available to a High Court
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W.P.Nos.12716 and 12718 of 2021
under Article 226 of the Constitution is almost limitless. However, the
discretion that ought to be exercised should be within accepted
parameters and on the basis of judicially recognised principles. There
is no doubt that Article 226 of the Constitution can even be a
breakdown machinery for an urgent civil dispute to be adjudicated
thereunder when civil courts are shut down, as during the pandemic,
and there is no other remedy available. However, ordinarily, Article
226 of the Constitution is treated as a provision invoked in the public
law domain. The very wording of such provision, including the last five
words thereof, makes it possible for every form of injustice to be
redressed. But constitutional courts exercise a self-imposed restraint
and do not allow orders as diktats to run riot.
6. The case of the petitioners is that the OTS terms offered to
the petitioners on or about October 20, 2020 required five per cent of
the proposed settlement amounts to be tendered along with the
applications for availing of the benefit under the scheme. The OTS
scheme envisaged that if the five per cent of the total OTS amount was
tendered and the borrower applied for the benefit thereunder, the
matter would be forwarded by the relevant branch to the higher
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W.P.Nos.12716 and 12718 of 2021
authorities of the State Bank for a case-to-case study before according
sanction. Once sanction was granted, the borrower had then to pay 10
or 15 per cent of the OTS amount within a short time and the balance
as per the rather generous terms indicated by the bank.
7. The petitioners paid the initial amounts and the petitioners’
applications to be permitted to avail of the OTS benefit were
sanctioned by the bank and due notices of the relevant sanctions were
communicated to the petitioners. It was at such stage that the
petitioners could not make the second tranche of payment of about 10
to 15 per cent of the settlement amounts for the petitioners to avail of
the benefit under the scheme and pay a much reduced amount than
what the bank claimed to be due in the relevant account or accounts
after applying the contractual interest payable therefor.
8. Even if it is assumed that there are justifiable grounds for the
petitioners being unable to pay, it must be appreciated that the
matters pertain to private contracts between the banker and its
constituents and it is for such parties to agree to a settlement, whether
individual or generic. Since the terms offered to the petitioners herein
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W.P.Nos.12716 and 12718 of 2021
in October, 2020 were a part of a scheme that had been introduced for
a larger section of the constituents of the bank, with individual
approvals being required in each case, it would be unfair for the
duration of the scheme or the time to make payments thereunder to
be enlarged for one constituent who has approached the court and not
confer the same benefit to another constituent who has not come to
court. It is for such reason that the bank was required to consider the
matter and the order of this court even required the bank to take a
sympathetic view.
9. The stand evident from the bank’s counter-affidavit is that it
cannot or does not intend to give any further latitude to the
petitioners. However unjustified it may appear to the court or to the
petitioners, the bank is entitled to take such stand in its commercial
wisdom. There may have been several other borrowers facing greater
hardship than the petitioners herein; other borrowers may have
suffered greater prejudice and sacrificed more to adhere to the terms
of the OTS. The court is not armed with the facts as to how many
borrowers of the petitioners’ ilk complied with the OTS terms and in
what circumstances or after facing what nature of adversities as a
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W.P.Nos.12716 and 12718 of 2021
result of the pandemic.
10. Oftentimes, the misplaced sympathy of courts in exercising
discretion without being aware of the surrounding circumstances or the
ground realities or even the domain expertise lead to greater injustice.
This is particularly so when the court orders a compassionate
appointment when there is no provision therefor or the court requires
the reconsideration of a request when the generic request has been
rejected in every other case. There is no law nor any equitable
principle that merely because a defaulter has come to court to invoke
the imaginary mercy jurisdiction of the court, the court would
sympathise with the litigant and make an exception in its case without
extending it to others similarly situated. Courts fall prey at times to
persuasive abilities of counsel and the system goes awry when
heavyweight counsel bring their persuasion to weigh on the judge.
There are also instances of the judge-lawyer nexus that is scarcely
referred to but, unfortunately, exists. In its holiest form, it is a result
of the familiarity that is built over a period of time. In its less prevalent
but most vicious and deleterious form, it has its roots in favouritism
and even more undesirable grounds. Judges also fall prey to mild and
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W.P.Nos.12716 and 12718 of 2021
extreme forms of bullying or quickly cave in to conceal their
inadequate grasp over the subject or gloat in a false sense of altruism,
unmindful of the relevant considerations or the possible adverse
impact on a larger section for doing good to one individual.
11. The petitioners rely on a judgment rendered by the Punjab
and Haryana High Court while extending the time for payment under
an OTS scheme in view of the difficulties faced by the borrower before
that court as a result of the pandemic. However, the facts which
culminated in the Punjab and Haryana High Court exercising discretion
in favour of the borrower in that case are quite different from the facts
here. In that case, the entire payment under the OTS scheme or offer
ought to have been made sometime in 2018. Some extension was
given and the matter also remained pending in court at a time when
the court was not functioning in full steam in the midst of the
lockdown. What further weighed with the Punjab and Haryana High
Court was that in certain OTS cases, the time to make the payment
had been enlarged from March 31, 2020 to June 30, 2020 and even to
September 30, 2020, after the lockdown came to be imposed towards
the end of March, 2020.
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W.P.Nos.12716 and 12718 of 2021
12. The order of the Punjab and Haryana High Court in Civil Writ
Petition No.5518 of 2020 (O&M) dated September 22, 2020 (Anu
Bhalla vs. District Magistrate, Pathankot) has been carried by way of
special leave petition by the secured creditor in that case. On February
15, 2021, the Supreme Court issued notice. The relevant part of the
short order of the Supreme Court needs to be seen:
“Issue notice only on the aspect of
directing the respondent to pay the balance
amount of Rs.21 Lakhs as per the terms of
OTS along with interest at the rate of 13.7%
from 30.08.2018.”
13. Since the order does not record the submission made on
behalf of the secured creditor, it is not clear as to whether the secured
creditor in that case was willing to receive the payment along with the
interest as indicated in the order. Again, even if it is assumed that the
secured creditor may have been steadfast in opposing any
enlargement of time being granted to the borrower in that case, it
must not be missed that the authority under Article 142 of the
Constitution permits the Supreme Court – and only such court – to
make an order that it deems fit in the interest of justice which may be
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W.P.Nos.12716 and 12718 of 2021
contrary to the agreement between private parties in a private domain
or otherwise contrary to the express provisions of any statute. There is
good reason why such extraordinary jurisdiction is left only to one
court in the country.
14. It is evident that at the time that the OTS terms were
extended to these petitioners, the first surge of the pandemic was on
the wane. By the end of October, 2020, the severe restrictions
imposed under the original lockdown had been considerably eased
though pre-lockdown normal life may not have resumed. The timing of
the offer was such that the bank is deemed to have taken into account
the difficulties faced by the business entities as a result of the
pandemic and the lockdown. Indeed, the tenor of the terms would
suggest the same, since only five per cent was required to be tendered
as application money and no more than 15 per cent thereafter to avail
of the benefit under this scheme. These were terms that were more
lenient than the OTS terms usually offered by nationalised banks and
the entire consideration of the bank may have been based on the
difficulties faced by business entities during the lockdown. If some of
the other constituents, despite facing greater difficulties, did pay or
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W.P.Nos.12716 and 12718 of 2021
may have paid in accordance with the terms offered – regarding which
there is no material before this court – there is no reason why an
exception should be carved out especially for the petitioners merely
because they are before the court. Equally, there may be hundreds of
other similarly placed borrowers who, like the petitioners, may not
have been able to take advantage of the most charitable terms offered
by the bank and have merely rued their misfortune instead of
approaching this court or any other. There is no good reason why such
other borrowers, who could not avail of the lenient terms because of
the financial difficulties faced by them, should not be extended the
courtesy that the petitioners demand only because they are not before
this court and the petitioners are.
15. It will still be open to the respondent bank, considering the
hardship faced by businesses and industries across the field during the
pandemic, particularly export-oriented industries who have no avenues
to sell or transport their products. But it is for the bank or the State in
its parens patriae role to come to the aid of the industry, the court
ought not to carve out an exception in an individual case as that would
be misguided sympathy and not in tune with the standard required to
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W.P.Nos.12716 and 12718 of 2021
be maintained under Article 226 of the Constitution.
16. For the reasons aforesaid, the petitioners’ extraordinary
prayer cannot be acceded to despite the sympathy of the court being
with the petitioners. W.P.Nos.12716 and 12718 of 2021 are dismissed.
There will, however, be no order as to costs. Consequently,
W.M.P.Nos.13514 and 13519 of 2021 are closed.
(S.B., CJ.) (S.K.R., J.)
08.07.2021
Index : yes
tar
To:
The Authorized Officer
State Bank of India Stressed Assets
Management Branch 1112 Raja Plaza
Avinashi Road Coimbatore- 641 037
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W.P.Nos.12716 and 12718 of 2021
THE HON'BLE CHIEF JUSTICE
AND
SENTHILKUMAR RAMAMOORTHY, J.
(tar)
W.P.Nos.12716 and 12718 of 2021
08.07.2021
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