Telangana High Court
M/S.Rajeshwara Rings Private ... vs The Andhra Pradesh State ... on 22 November, 2022
Bench: K. Sarath
SK,J
W.P.No.4180 of 2022
Dt.22.11.2022
THE HONOURABLE SRI JUSTICE K.SARATH
WRIT PETITION No.4180 of 2022
ORDER:
This petition is filed seeking a direction more particularly
one in the nature of Writ of Mandamus declare the
Pro.No.AFC/RRE/MR&R/2021-22/233, dated 30.12.2021 of
the respondents in rejecting the request of the petitioner for
OTS and directing to pay interest even after receipt of the entire
principal amount as illegal, arbitrary and consequently, to set
aside the impugned proceedings dated 30.11.2021 by directing
the respondent to accept the OTS proposal made by the
petitioner.
2. Heard Sri.T.Koteswara Prasad, the learned counsel for the
petitioner and Sri.M.Hamsa Raj, learned Standing Counsel for
the Andhra Pradesh State Financial Corporation.
3. Learned counsel for the petitioner submits that the
petitioner has availed a term loan of Rs.336.69 lakhs to set up
a unit for manufacture of Precision Engineering Components
(Turned Bearing Rings, Turned Components and allied items) at
Survey No. 551, Ghatkesar Village and Mandal, Medchal
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W.P.No.4180 of 2022
Dt.22.11.2022
Malkajgiri District under General Loan Scheme. The total
project of Rs.605 lakhs. That the said loan was obtained
against collateral security worth Rs.138.02 lakhs by way of
urban immovable properties including value of unit's land
surplus value of securities offered to the associated unit to the
satisfaction of respondent.
4. The learned counsel for the petitioner submitted that in
view of the market situation the petitioner has decided to close
the business by settling all the liabilities in order to avoid the
burden of interest, the petitioner had approached the
respondent corporation and made a proposal of One Time
Settlement on 18.02.2020. The respondent advised the
petitioner to pay sum amount for approval under OTS.
In pursuance of above direction, the petitioner had paid Rs.25
lakhs to the respondent on 18.03.2020 through RTGS and also
paid Rs.40 lakhs on 31.03.2020. Inspite of payment of total
principal amount respondent has not considered the One Time
Settlement proposal of the petitioner and issued
Pro.No.AFC/RRE/MR&R/2021-22/233, dated 30.12.2021
directing the petitioner to pay Rs.1,40,73,567/- including O.E
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W.P.No.4180 of 2022
Dt.22.11.2022
without any basis, without mentioning the details of interest
accrued thereon is illegal, arbitrary and unconstitutional and
contrary to the guidelines issued by the RBI under OTS
scheme.
5. The learned standing counsel for the respondent
submitted that the petition is not maintainable as the petitioner
borrowed a term loan for an amount of Rs.336.69 lakhs and
failed to pay the borrowed amount regularly and he cannot
pressurise the respondent Corporation to settle the matter
under One Time Settlement scheme and the standing counsel
for the respondent relied on the judgment of the Hon'ble
Supreme Court in Bijnor Urban Cooperative Bank Limited,
Bijnor and others vs Meenal Agarwal and others1.
6. After hearing on both sides this Court is of the considered
view that admittedly, the petitioner has obtained an amount of
Rs.336.69 lakhs to set up a unit for manufacture of Precision
Engineering Components and failed to pay the interest and
principal amount regularly. The acceptance of the One Time
Settlement scheme is ultimately for the bank to take conscious
2021 SCC OnLine SC 1255
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W.P.No.4180 of 2022
Dt.22.11.2022
decision. No bank can be compelled to accept a lesser amount
under the One Time Settlement scheme despite a bank is able
to conduct auction, to secure property or mortgage property
and no borrower as a matter of right pray for grant One Time
Settlement scheme.
7. The Hon'ble Supreme Court in Bijnor Urban Cooperative
Bank Limited, Bijnor vs Meenal Agarwal (supra) held 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 and 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 that financial
institution/bank shall take a prudent decision whether to grant
the benefit or not under the OTS scheme.
8. In view of the above circumstances, the writ petition is
devoid of merits and liable to be dismissed and accordingly the
Writ Petition is dismissed. No costs.
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W.P.No.4180 of 2022
Dt.22.11.2022
9. Miscellaneous Petitions, if any, pending in this Writ
Petition shall stand closed.
________________________________
JUSTICE K.SARATH
Date: 22.11.2022.
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W.P.No.4180 of 2022
Dt.22.11.2022
THE HONOURABLE SRI JUSTICE K.SARATH
W.P.No.4180 OF 2022
Date: ______.11.2022
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