Dismissed

M/S. Shreeji Sales Corporation Thorugh Its Prop. Bharat Navnitlal Shah v. Punjab National Bank, Zonal Office, Ahmedabad

Gujarat HC25 Feb 2022SCA/4088/2022

Case brief

AI extract

What is this about?

In a special civil application challenging a bank's refusal to grant restructuring under normal policy, the High Court held that the petitioner could not sue for restructuring. The Court found the applicant liable for failing to comply with earlier court-mandated conditions, thus dismissing the petition as devoid of merit.

What the court decided

AI extract

M/S. Shreeji Sales Corporation Thorugh Its… — Contract and Commercial Disputes | Gujarat HC (2022)

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C/SCA/4088/2022 ORDER DATED: 25/02/2022

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 4088 of 2022

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M/S. SHREEJI SALES CORPORATION THORUGH ITS PROP. BHARAT NAVNITLAL SHAH

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Versus

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PUNJAB NATIONAL BANK, ZONAL OFFICE, AHMEDABAD

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Appearance:

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B P PATEL(7510) for the Petitioner(s) No. 1 for the Respondent(s) No. 1,2

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CORAM: HONOURABLE MR. JUSTICE BHARGAV D. KARIA

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Date : 25/02/2022

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ORAL ORDER

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Heard learned advocate Mr.B.P.Patel for the petitioner.

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BY this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs :

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“A)Your Lordship may kindly be pleased to issue an appropriate writ, order, direction to quashing and setting aside letter/communication/decision dated 25/01/2022 issued by the respondent No.2.

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B)Your Lordship may kindly be pleased to issue an appropriate writ, order, direction directing the respondent authorities to restructure accounts of the petitioner converting interest and Principal into fresh term loan as per bank’s normal restructuring policy on the date of restructure.

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C)Pending admission, hearing and final disposal of this petition, your lordships may be pleased to stay the implementation, Execution and operation of the communication/letter/decision dated 25/01/2022.

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Page 1 of 5

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C/SCA/4088/2022 ORDER DATED: 25/02/2022

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D)Such other & further relief/s as may be Deem fit, just and proper may be granted in interest of justice.”

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This Court passed an order dated 14.09.2021 in Special Civil Application No.11330 of 2021 whereby, the the following prayers made by the petitioner was considered :

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“3. By this petition, under Articles 226 and 227 of the Constitution of India, he petitioners have prayed for the following reliefs:

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“(A) To issue a writ of mandamus or any other appropriate writ, order or direction in the nature of mandamus or any other writ for directing the Respondent to implement the Restructuring Package already granted by the Respondent to the Petitioner No.1 vide Letter dated 30/03/2021 (Annexure-C) and to quash and set aside entire arbitrary and illegal measures initiated by the Respondent under the Securitisation Act.

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(B) Pending admission, hearing and final disposal of this Petition be further pleased to direct the Respondent not to take any further action under the Securitisation Act and to Maintain Status Quo in the matter against the Petitioners and the Properties in question.

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(C) Be pleased to grand ex-parte ad-interim reliefs in terms Of Para 19-B as stated supra.

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(D) To grant any other and further appropriate and just relief(s) as may be deemed necessary & fit on the facts and circumstances of case.

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(E) The cost of this petition may be awarded.”

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Thereafter, the aforesaid petition was allowed with the following direction :

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“14. In view of the foregoing reasons, the petition deserves to be allowed and is accordingly allowed. The impugned action of respondent-Bank to cancel the

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Page 2 of 5

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C/SCA/4088/2022 ORDER DATED: 25/02/2022

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sanction letter dated 30^th March, 2021 as well as the letter dated 6^th July, 2021 informing the petitioners about such cancellation are hereby quashed and set aside. The sanction letter dated 30^th March, 2021 is held to be in operation. The petitioners and the respondent-Bank are directed to implement the same at the earliest and all the consequences will be followed pursuant to the restoration of the sanction letter dated 30^th March, 2021. Rule is made absolute to the aforesaid extent.”

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Pursuant to the aforesaid order, the sanction letter dated 30^th March, 2021 issued by the respondent-Bank for restructuring the credit facility of the petitioner was implemented by the respondent-Bank calling upon the petitioner to fulfill the conditions of furnishing the Bank Guarantee Agreement by Mr.Rakesh Jawar as per the statement made in the earlier petition by the petitioner.

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The respondent-Bank also converted the cash credit facility of Rs.380 Lakh and Rs.280 Lakh into working capital term loan and also sanctioned FITL of Rs.8 Lakh for repayment of interest and simultaneously also directed the petitioner to deposit the difference of Rs.38.31 Lakhs in cash credit account as the outstanding on 30^th September, 2021 was Rs.426.31 Lakh and Rs.14.31 Lakhs in term loan account. However, the petitioner by letter dated 7.10.2021 expressed his unwillingness to comply with the terms and conditions of letter dated 06.10.2021 issued by the respondent-Bank pursuant to the order passed by this Court and requested the respondent-Bank

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Page 3 of 5

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C/SCA/4088/2022 ORDER DATED: 25/02/2022

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to consider for restructuring of the account of the petitioner as per the present policy of the Bank.

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The petitioner thereafter, further requested by letter dated 30.12.2021 for restructuring of the outstanding dues which was rejected by the respondent-Bank by letter dated 18.10.2021 followed by letter dated 25.01.2022 to the effect that as the petitioner failed to comply with the conditions of the sanction letter dated 31.03.2021 pursuant to the order passed by this Court on 14.09.2021, the request of the petitioner to consider the case of the petitioner for restructuring as per the policy of the Bank was not accepted.

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Learned advocate Mr.B.P.Patel appearing for the petitioner submitted that the petitioner is unable to comply with the conditions of the letter dated 06.10.2021 issued by the respondentBank pursuant to the order passed by this Court and has submitted the new proposal for restructuring of the account which is not accepted by the Bank and hence, this petition is filed.

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In view of the facts of the case that the respondent-Bank was ready and willing to comply with the order passed by this Court in Special Civil Application No.11330 of 2021 and has given

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Page 4 of 5

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C/SCA/4088/2022 ORDER DATED: 25/02/2022

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enough time to the petitioner to comply with the letter dated 06.10.2021, but the petitioner has failed to comply with the same, the respondentBank has therefore rightly not considered the fresh proposal of the petitioner. The petition is therefore dismissed being devoid of any merit.

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(BHARGAV D. KARIA, J)

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PALAK

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M/S. Shreeji Sales Corporation Thorugh Its Prop. Bharat Navnitlal Shah v. Punjab National Bank, Zonal Office, Ahmedabad

Case brief

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What the court decided

M/S. Shreeji Sales Corporation Thorugh Its Prop. Bharat Navnitlal Shah v. Punjab National Bank, Zonal Office, Ahmedabad

Case brief

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What the court decided

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