Dismissed¶13

Kamlendra Kumar Tripathi v. State of U.P. Thru. Prin. Secy. Home, Lko. and 2 Others

Allahabad HC31 Mar 2023/2451/2023

Case brief

AI extract

What is this about?

NPA; one-time settlement (OTS); KCC loan account; Agriculture Term Loan (ATL); RBI guidelines dated September 1, 2001; clause 4.2.5; prudential norms on income recognition, asset classification and provisioning; writ of mandamus; National Lok Adalat 11.02.2023; OTS offer letter dated 04.02.2023; borrower's rights; banking; writ petition dismissed; Allahabad High Court Lucknow Bench; Manish Kumar, J.; Order Date 31.3.2023; WRIT - C No. 2451 of 2023.

What did the court decide?

The Bank had already given an OTS offer to the petitioner, which he had not accepted before the Lok Adalat. ¶12

Kamlendra Kumar Tripathi Vs State of U.P. Thru. Prin. Secy. Home, Lko. and 2 Others — Allahabad HC (2023) — LawSathi Research

What the court decided

AI extract

Outcome

Dismissed

¶13

Issue for consideration

Whether Respondent Nos. 2 and 3 (the Bank) can be directed by writ to settle the KCC loan account No. 35625857626 and the ATL account No. 35625895221 separately. +1 more

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Court's answer

The Bank had already given an OTS offer to the petitioner, which he had not accepted before the Lok Adalat.

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Ratio / Principle

A direction to the Bank to enter into a fresh OTS cannot be granted by issuing a writ of mandamus; it is not a right of the borrower, and as per the RBI circular the prayer made in the writ petition is not permissible.

¶12

Key takeaways

As per the RBI circular (clause 4.2.5), if one loan account of a borrower has become NPA, the other account is automatically treated as NPA and the accounts cannot be dealt with separately; consequently the prayer in the writ petition is not permissible.ratio¶12
It is always open for the petitioner to approach the Bank (observation made on counsel's request for liberty).obiter¶14

Detailed headnote1 paragraphs

Allahabad High Court (Lucknow Bench), Manish Kumar, J. — Writ petition dismissed. The borrower-petitioner, whose KCC loan account No. 35625857626 and Agriculture Term Loan (ATL) account No. 35625895221 had been declared NPA, sought a writ direction to the Bank to settle the two accounts separately and to enter into a fresh one-time settlement (OTS). The Court noted that the Bank had already made an OTS offer vide letter dated 04.02.2023 (KCC dues Rs. 13,47,269/- against offer of Rs. 11,36545.80/-; ATL dues Rs. 8,27,543/- against offer of Rs. 6,39,333/-), which the petitioner did not accept before the National Lok Adalat on 11.02.2023. Placing reliance on the RBI guidelines dated September 1, 2001 (clause 4.2.5), under which once one loan account of a borrower becomes NPA the other account is automatically treated as NPA and the accounts cannot be dealt with separately, the Court held that a fresh OTS cannot be compelled by a writ of mandamus as it is not a right of the borrower. The petition was dismissed as devoid of merits, with the observation that it is always open to the petitioner to approach the Bank.

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Court No. - 24

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Case :- WRIT - C No. - 2451 of 2023

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Petitioner :- Kamlendra Kumar Tripathi Respondent :- State Of U.P. Thru. Prin. Secy. Home, Lko. And 2 Others Counsel for Petitioner :- Shashank Shukla,Anuj Mishra,Sadhu Saran Shukla

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Counsel for Respondent :- C.S.C.,Alok Saxena

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Hon'ble Manish Kumar,J.

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Vakalatnama filed on behalf of opposite party Nos.2 & 3 by Shri Uma Shankar Lal and Shri Abul Fazal Jaffrey, Advocate is taken on record.

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The present writ petition has been preferred with the following main prayer:-

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"(i) Issue writ, order, direction or command to the Respondent No.2 and 3 to settle the loan account having KCC loan account No.35625857626 and ATL account No.35625895221 speparely, in the interest of justice."

¶9

Learned counsel for the petitioner has submitted that the petitioner has taken two loans; one is KCC loan and other is Agriculture Term Loan (hereinafter referred to as the ATL). Due to some unavoidable circumstances, the petitioner failed to deposit the installments within time and both the accounts have been declared NPA by the Bank. The petitioner is ready to pay the whole amount against the ATL account as offered by the Bank vide its letter dated 04.02.2023 and for the KCC loan account, the petitioner prays for fixing some easy installments so the same would be paid. It is further submitted that the petitioner is ready for one time settlement and prays for that the Bank may be directed to enter for a fresh OTS.

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On the other hand, learned counsel for the respondent-Bank has submitted that after declaring the accounts NPA and offer has been made to the petitioner under the OTS scheme by the Bank vide its letter dated 04.02.2023 against the KCC account, the total dues as on date, i.e., 04.02.2023 was Rs.13,47,269/(Thirteen lakh forty seven thousand two hundred sixty nine rupees only) and the offer was Rs.11,36545.80/- (Eleven lakh thirty six thousand five hundred forty five rupees eighty paisa only) and for another ATL account, the total dues as on date, i.e., 04.02.2023 was Rs.8,27,543/- (Eight lakh twenty seven thousands five hundred forty three rupees only) and the offer made was Rs.6,39,333/- (Six lakh thirty nine thousand three hundred thirty three rupees only) and requested the petitioner to

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appear before the National Lok Adalat on 11.02.2023. It is further submitted that the petitioner appeared before the Lok Adalat but had not accepted the offer made by the Bank vide its letter dated 04.02.2023. It is further submitted that as per the guidelines issued by the Reserve Bank of India on September 1, 2001 addressed to the Chief Executives of all Commercial Banks regarding prudential norms on income recognition, asset classification and provisioning pertaining to the advances portfolio and as per the clause 4.2.5, if one loan account of a person/loanee has become NPA then other account will be automatically treated as NPA and it cannot be dealt separately. So the relief claimed by the petitioner is not maintainable as per the circular of the RBI.

¶12

After hearing learned counsel for the parties, going through the record and the circular provided by the learned counsel for the Bank dated September 1, 2001(which is taken on record) the position which emerges out of the present case is that the Bank had already given an offer to the petitioner, which he had not accepted before the Lok Adalat. As far as the submission raised by learned counsel for the petitioner that a direction may be issued to the Bank for entering into a fresh OTS, that cannot be granted by issuing a writ of mandamus and it is not a right of the borrower and as per the circular of the RBI, the prayer made in the present writ petition is not permissible.

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In view of the above, the writ petition is devoid of merits, hence, it is dismissed.

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At this stage, learned counsel for the petitioner has submitted that the petitioner may be given liberty to approach the Bank. It is always open for the petitioner to approach the Bank.

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Order Date :- 31.3.2023 Ashutosh Pandey

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Digitally signed by :- ASHUTOSH PANDEY High Court of Judicature at Allahabad, Lucknow Bench

Kamlendra Kumar Tripathi v. State of U.P. Thru. Prin. Secy. Home, Lko. and 2 Others

Case brief

What is this about?

What did the court decide?

Kamlendra Kumar Tripathi v. State of U.P. Thru. Prin. Secy. Home, Lko. and 2 Others

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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