M/S San-D Plot No. 61 vs Small Industries Development ...
2023 Latest Caselaw 99 UK

   IN THE HIGH COURT OF UTTARAKHAND
               AT NAINITAL

              Writ Petition No. 2653 of 2022 (MS)

M/S SAN-D Plot No. 61, IDEB, Industrial Estate, and Others
                                                ......Petitioners
                           Versus
Small Industries Development Bank of India and Others
                                             ......Respondents


Present:
       Mr. Atul Kumar Bansal, learned counsel for the petitioners.
       Mr. Arvind Vashishtha, learned senior counsel assisted by Mr. Imran Ali
       Khan, learned counsel for the respondents.

                         Date of hearing and order: 07.01.2023

Sri Sanjaya Kumar Mishra, J.

This is an application for recall of the order passed by this Court on 21.10.2022. The order that was passed by this Court is as follows:

"Heard.

By filing this writ petition, the petitioner has prayed for issuance of a writ of mandamus commanding respondent nos. 1, 2 and 3 to extend the period of deposit of OTS amount of Rs. 83,11,918/- (as per OTS sanction date 03.12.2021, annexure no. 3 to this writ petition) from 31.03.2022 to 31.03.2023 and further directing the respondent no. 1, 2 and 3 to accept the amount of Rs. 83,11,918/- as per OTS sanction dated 03.12.2021.

In that view of the matter, the writ petition is disposed of giving liberty to the petitioner to file an application for extension of the OTS deposit along with upfront deposit of Rs. 21 lakhs within a period of 10 days, hence. On such an event, the petitioner's case shall be considered by the respondents, and after affording reasonable opportunity of hearing to the petitioner and considering the hardship faced by the small businessmen during the Covid-19 pandemic, take decision thereon strictly on merit of the case within a period of two weeks from the date of such deposit. The petitioner shall also produce certified copy of this order along with the brief. However, the petitioner is ready to deposit Rs. 15 lakhs as on today.

We hope and trust that till the disposal of such representation, if filed within time period stipulated by us above, the respondents shall not take any coercive action against the petitioner.

Pending application, if any, also stands disposed of."

2. It is apparent from the records and in view of the facts that the OTS proposal offered to the petitioners by the present applicant (respondents in the writ petition) could not be satisfied by the petitioners because of the Covid-19 pandemic. Hence, taking a lenient view we passed the aforesaid order. The present application has been filed mainly on the ground that the petitioner has made misrepresentations before the Court and was successful in obtaining the order.

3. It was also submitted by the learned senior counsel Mr. Arvind Vashishtha that the OTS proposals sent to the petitioner was never accepted by him and, therefore, there is no concluded OTS proposal in existence at the time of filing of the writ application. It is apparent from the documents filed by the petitioners that at that time because of the Covid-19 pandemic both the petitioners were found covid positive and were quarantined. Thereafter, they have been in contact with the respondent through phone and through whatsapp messages. However, it is generally understood that by March, 2022 the Covid-19 pandemic came to be controlled.

4. In the case the Hon'ble Supreme Court in suo moto WPPIL No. 3 of 2020 directed that the limitation for all litigation shall remain arrested between 15.03.2020 to 28.02.2022. Later on, on 10.01.2022, the Hon'ble Supreme Court also extended the limitation period by another 90 days. Moreover, as per the

judgment passed in the case of Small Scale Industrial Manufactures Association (Regd.) vs. Union of India and Others reported in (2021) 8 SCC 511 the Hon'ble Supreme Court directed the Reserve Bank of India to formulate a policy of not charging interest on interest for the Covid-19 pandemic period. Paragraph 103 of the aforesaid judgment is quoted hereunder:

"103. However, it is directed that there shall not be any charge of interest on interest/compound interest/penal interest for the period during the moratorium and any amount already recovered under the same head, namely, interest on interest/penal interest/compound interest shall be refunded to the concerned borrowers and to be given credit/adjusted in the next instalment of the loan account. All these petitions are partly allowed to the aforesaid extent only and as observed for the reliefs, the petitions are dismissed. Interim relief granted earlier not to declare the accounts of respective borrowers as NPA stands vacated. However, there shall be no order as to costs."

5. In pursuance thereof, the Reserve Bank of India has issued Notification No. RBI/2021-22/17 DOR.STR.REC.4/ 21.04.048/2021-22 Dated April 7, 2021 directing each Bench to hold the meeting of its Board and formulate a policy of not charging interest on the interest, but it is the feeling of this Court that such orders passed by the Hon'ble Supreme Court and as well as the directives issued by the Reserve Bank of India has not been followed by the Banks in its true spirit. This notification does not differentiate between No NPA borrowers and NPA borrowers. The relevant portion of the notification is quoted hereinbelow:

"Asset Classification and Income Recognition following the expiry of Covid-19 regulatory package

The Hon'ble Supreme Court of India has pronounced its judgement in the matter of Small Scale Industrial

Manufacturers Association vs UOI & Ors. and other connected matters on March 23, 2021. In this connection, it is advised hereunder:

I. Refund/adjustment of 'interest on interest'

2. All lending institutions1 shall immediately put in place a Board-approved policy to refund/adjust the 'interest on interest' charged to the borrowers during the moratorium period, i.e. March 1, 2020 to August 31, 2020 in conformity with the above judgement. In order to ensure that the above judgement is implemented uniformly in letter and spirit by all lending institutions, methodology for calculation of the amount to be refunded/adjusted for different facilities shall be finalised by the Indian Banks Association (IBA) in consultation with other industry participants/bodies, which shall be adopted by all lending institutions.

3. The above reliefs shall be applicable to all borrowers, including those who had availed of working capital facilities during the moratorium period, irrespective of whether moratorium had been fully or partially availed, or not availed, in terms of the circulars DOR.No.BP.BC.47/21.04.048/2019- 20datedMarch27,2020 and DOR.No.BP.BC.71/21.04.048/201 9-20 dated May 23, 2020 ("Covid-19 Regulatory Package").

4. Lending institutions shall disclose the aggregate amount to be refunded/adjusted in respect of their borrowers based on the above reliefs in their financial statements for the year ending March 31, 2021."

5. Hence, this recall application is disposed of with a further direction that the petitioner shall appear before the Bank within a period of 15 days and revalidate, if required, the demand drafts of Rs. 21 lakhs they have already submitted before the Bank would be revalidated and file an application for OTS, which shall be considered.

6. While considering this matter, the respondent nos. 1, 2 and 3 shall also consider the effect of Small Scale Industries Limited

Judgment passed by the Hon'ble Supreme Court and the guidelines/directives issued by the Reserve Bank of India.

7. It is pertinent to note that the Banks are precluded from charging interest on interest in between 15.03.2020 till 28.05.2022 and, accordingly, dues shall be calculated and adjusted to be finalised.

8. With such observations, the writ application stands disposed of.

(Sanjaya Kumar Mishra, J.) (Grant certified copy as per rules)

Pooja