Allowed

M/S Value Plus Stores Pvt. Ltd. v. State of U.P. and 2 Others

Allahabad HC5 Feb 2021WRIC/1792/2021

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition filed by a company challenging recovery proceedings initiated by a bank due to NPA status. The court directed the petitioner to deposit the principal amount in installments to waive collection charges, ensuring revival of the account while resuming proceedings upon future default.

What did the court decide?

Petitioner to deposit Rs. 50,00,000/- in installments; no collection charges if paid as directed otherwise, proceed as per law.

M/S Value Plus Stores Pvt. Ltd. Vs State… — Contract and Commercial Disputes | Allahabad HC (2021)

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Court No. - 39

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Case :- WRIT - C No. - 1792 of 2021

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Petitioner :- M/S Value Plus Stores Pvt. Ltd. Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Nipun Singh Counsel for Respondent :- C.S.C.,Abhishek Mishra

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Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.

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Heard learned counsel for the petitioner, Shri Abhishek Mishra, learned counsel appearing on behalf of respondent-Bank and learned Standing Counsel representing the State.

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The instant writ petition has been filed seeking the following relief:

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"1. Issue a writ, order or direction in the nature of certiorari quashing the recovery proceedings initiated in pursuance of Recovery Certificate dated 12.5.2016 by respondent No. 3 against the petitioner, as the petitioner is ready to pay the entire outstanding amount qua the interest, excluding penal/collection charges imposed by the petitioner.

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2. Issue a writ, order or direction in the nature of mandamus directing respondent No. 3 to forthwith produce the petitioner's current statement of account by excluding penal/collection charges, by permitting the petitioner to deposit the entire outstanding amount as per the statement of account to be produced by the bank, respondent No. 3 in easy installments, as may be directed by this Court.

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3. Restraining the respondent No. 3 from imposing penal/collection charges on the petitioner."

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The submission of the learned counsel for the petitioner is that the petitioner is a company incorporated under the provisions of Companies Act, 1956. The petitioner was granted the facility of cash credit limit against its property for a sum of Rs. 50,00,000/- (rupees fifty lac only). The petitioner was continuously paying the regular interest without there being any default. However, as the petitioner-company suffered loss due to slow down of economy of the country, it could not deposit the interest for the month of March, 2016, which was later on paid by the petitioner. However, as there was certain delay in depositing

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the interest, the account of the petitioner was declared NPA and the proceeding has been initiated by the Bank and in pursuance thereof, the recovery certificate has been issued on 12.5.2016.

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Learned counsel for the petitioner further submits that the petitioner has already paid certain amount and it is ready to deposit the outstanding amount excluding the collection charges in easy installments

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Shri Abhishek Mishra, learned counsel appearing on behalf of the bank fairly submitted that the bank is interested in realizing the entire amount along with interest. He further submits that total amount outstanding against the petitioners excluding collection charges is Rs. 27,92,058/- till date. He also submitted that if the petitioner is ready to deposit the amount within the specified period as fixed by this Court, the Collector shall not demand the collection charges from the petitioner.

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In this view of the matter, the writ petition is disposed of directing the petitioner to deposit Rs. 500,000/- (rupees five lac only) within a month and remaining amount shall be deposited in four equal quarterly installments within a year. If the petitioner deposits the amount as specified above, no collection charge shall be realized from the petitioner.

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However, in case of any default in payment of installments, the recovery proceeding shall be revived from that stage in accordance with law.

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Order Date :- 5.2.2021 Ishrat

M/S Value Plus Stores Pvt. Ltd. v. State of U.P. and 2 Others

Case brief

What is this about?

What did the court decide?

M/S Value Plus Stores Pvt. Ltd. v. State of U.P. and 2 Others

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