M/S. Shine Industries vs The Managing Director
2023 Latest Caselaw 2924 Tel

            HON'BLE MRS JUSTICE SUREPALLI NANDA


            WRIT PETITION No.27935 of 2023

ORDER:

Heard Mr.S.V.Ramana, learned counsel appearing

on behalf of petitioner and Mr.M.Hamsa Raju, learned

Standing Counsel for TSSFC, appearing on behalf of

respondent Nos.1 and 2.

PERUSED THE RECORD

2. The petitioner approached the Court seeking the

prayer as follows:

"to issue an appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus declaring unilaterally the arbitrary and high handed action of the 2nd respondent in and to recovery of amount Rs.1,19,86,923/- as arrears from the petitioner unit and to seize up, situated at Plot No.44/B, Sy.No.228/9, TSIIC, Kucharam Industrial Park, Kucharam Village, Manoharabad Mandal, Medak District and consequently direct the respondents refrain from taking further action for seize of the unit until the OTS application is considered and disposed of on merits."

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3. A bare perusal of the contents of the representation

made by the petitioner, dated 25.09.2023 addressed to the

respondent No.2 indicates that, the petitioner made a request

for one time settlement of his term loan account number

76172901 with respondent's bank explaining the financial

difficulties faced by the petitioner due to the Covid-19

pandemic and untimely release of payments from his

suppliers (Pharmaceuticals). The petitioner is the first gen

entrepreneur and had started this manufacturing facility with

good intention however, could not recover from Covid-19

phase and again get back on track and hence, requested to

treat petitioner's case as special case and to permit the

petitioner to pay complete principal amount of

Rs.1,62,00,000-00 and also requested for waiver of interest

due and penalties to the 2nd respondent herein and the

petitioner also in the said representation specifically stated

that the petitioner is willing to pay within stipulated time and

also assures to pay remaining principal amount if some

reasonable time is provided to the petitioner. But however,

the request of the petitioner was rejected vide proceedings

Ref.No.AFC/RCP/2023-24/701, dated 26.09.2023 and same is

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challenged by the petitioner before this Court on the ground

that the petitioner's representation seeking one time

settlement and also the reasons making such a request was

not considered at all and the impugned proceedings dated

26.09.2023 have been passed unilaterally.

4. A bare perusal of the Order impugned vide

Ref.No.AFC/RCP/2023-24/701, dated 26.09.2023 indicates

that the petitioner's Term Loan Account was not eligible for

One-Time Settlement as per the norms of the Corporation

since the petitioner's unit was downgraded to doubtful

category on 30.09.2022 and OTS can be permitted under the

rules only after 2 years from the date of the unit being

downgraded to doubtful category and further petitioner was

advised to clear off the arrears pertaining to his term loan

account at the earliest.

5. The learned Counsel appearing on behalf of respondents

brings on record the Judgment of the Apex Court in the

Supreme Court Of India Civil Appellate Jurisdiction Civil

Appeal No.7411 of 2021 in between The Bijnor Urban

Cooperative Bank vs. Meenla Agarwal, dated 15.12.2021,

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and placed reliance in particular to paragraph No.11 of the

said Judgment, which reads as under:

"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."

6. The view of the Apex Court in the above said Judgment

is 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

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under the OTS Scheme and the guidelines issued from time to

time.

7. Taking into consideration the above referred facts

and circumstances of the case and the view taken by

the Apex Court in Bijnor Urban Co-operative Bank v

Meenla Agarwal, dated 15.12.2021 on the point 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, this

Court opines that in view of the specific plea of the

petitioner in the representation, dated 25.09.2023 that,

the petitioner is willing to pay 25% of the principal

amount within a stipulated time and the request of the

petitioner to permit the petitioner to pay the principal

amount in full without interest and penalties and to

provide for a one-time settlement of petitioner's term

loan account No.76172901 with petitioner's bank, this

Court opines that the respondents herein should

re-consider the whole issue afresh again without

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reference to the letter dated 26.09.2023 of the 2nd

respondent herein vide Ref: AFC/RCP/2023-24/701,

and accordingly the respondents are directed to re-

consider petitioner's representation dated 26.09.2023

for one-time settlement of Term loan afresh again

within a period of three (3) weeks from the date of

receipt of the copy of the order as a special case by

giving reasonable opportunity of hearing to the

petitioner by giving due notice to the petitioner

considering the Covid circumstances due to which the

petitioner failed to conduct his business and fell into

losses and serious financial problems in accordance to

law and pass appropriate orders duly communicating

the decision to the petitioner. Till such exercise as

stipulated by this Court is undertaken by the

respondents and appropriate orders passed duly

re-considering petitioner's representation dated

26.09.2023 within the time period of three weeks from

the date of receipt of the copy of the order as stipulated

by this Court in the present order, the respondents

shall not initiate any coercive steps against the

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petitioner in pursuance to E-mail dated 22.09.2023 of

the 2nd respondent addressed to the petitioner herein to

seize the petitioner unit.

8. With these observations, the Writ petition is disposed of.

However, there shall be no order as to costs.

Miscellaneous petitions, if any, pending shall stand closed.

__________________________ MRS JUSTICE SUREPALLI NANDA

Date: 6th October, 2023 ksl

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THE HON'BLE MRS JUSTICE SUREPALLI NANDA

WRIT PETITION No.27935 of 2023

DATED:06.10.2023

Date: 6th October, 2023 ksl