Disposed

M/S Kanchana Industries v. Kotak Mahindra Bank Limited

Karnataka HC4 Apr 2022WP/1025/2022

Case brief

AI extract

What is this about?

writ petition filed under Articles 226 and 227 of the Constitution seeking direction to restructure financial facilities and stay recovery action. The court directed the bank to consider the restructuring request and prohibited precipitating recovery until a decision is communicated.

What did the court decide?

The 1st respondent-Bank was directed to consider the case for restructuring and communicate the decision; recovery action was stayed till the decision is communicated.

M/S Kanchana Industries Vs Kotak Mahindra… — Contract and Commercial Disputes | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF APRIL, 2022

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BEFORE

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THE HON' BLE MR. JUSTICE S.G. PANDIT

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WRIT PETITION No.1025/2022 (GM-RES)

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BETWEEN:

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M/S. KANCHANA INDUSTRIES REP. BY ITS PROPRIETOR JAYARAM KAMATH S/O LATE K.V.KAMATH AGED ABOUT 60 YEARS D.NO.126-P2 ALOOR VILLAGE KUNDAPURA TALUK UDUPI DISTRICT-576233.

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M/S. K VISHWANATHA SUBRAYA KAMATH AND SONS PARTNERSHIP FIRM D.NO.12-93 RAMA SHAKTHI MISSION ROAD PADAVU, KULSHEKAR MANGALORE-575016 REP. BY ITS MANAGING PARTNER JAYARAM KAMATH S/O LATE K.V.KAMATH AGED ABOUT 60 YEARS.

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...PETITIONERS

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(BY SRI G KRISHNAMURTHY, SR.COUNSEL A/W SRI MAHABALESHWARA RAO K.N., ADV.)

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AND:

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KOTAK MAHINDRA BANK LTD., MANGALORE BRANCH ABHIMAN COMMERCIAL COMPLEX PVS JUNCTION MANGALORE-575003 REP. BY ITS AUTHORISED OFFICER AND CHIEF MANAGER.

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GOVERNMENT OF INDIA FINANCIAL SERVICE DIVISION JEEVAN DEEP BHAVAN SANSAD MARG NEW DELHI-110001 REP. BY ITS SECRETARY.

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THE RESERVE BANK OF INDIA CENTRAL BANK OF INDIA 18^TH FLOOR, SAHAHID BHAGAT SINGH ROAD MUMBAI-400001 REP. BY GOVERNOR OF RBI.

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…RESPONDENTS

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(BY SRI FRANCIS XAVIER, ADV. FOR R1 R2 & R3 SERVED)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENT BANK TO RESTRUCTURE THE FINANCIAL FACILITIES GRANTED TO THE PETITIONERS IN TERMS OF CIRCULAR DATED 05.05.2021 AND CIRCULAR DATED 05.05.2021 ANNEXURES-A AND B OR ANY OTHER CIRCULARS ISSUED BY RBI, AS CLAIMED BY THE PETITIONERS IN THE LETTER/APPLICATION DATED 09.08.2021 AND 19.08.2021 ANNEXURE-C, D, E AND F AND ETC.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-

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O R D E R

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The petitioners-propriety concern as well as Partnership firm are before this Court under Article 226

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of the Constitution of India praying for a writ of mandamus directing the respondent-Bank to restructure the Financial Facilities granted to the petitioners in the light of the Circulars bearing

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No.RBI/2021-22/31 and No.RBI/2021-22/32 dated 05.05.2021 (Annexures-A and B) issued by the 3^rd respondent-the Reserve Bank of India (for short ‘ the RBI’ ) and also for a writ of certiorari to set aside the letter (Annexure-N) dated 21.09.2021 and Possession Notice (Annexure-V and W) dated 18.12.2021.

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Heard Sri G. Krishna Murthy, learned Senior Counsel for Sri Mahabaleshwara Rao K.N., learned counsel for the petitioners and Sri Francis Xavier, learned counsel for the 1^st respondent-Kotak Mahindra Bank Limited (for short ‘the Bank’ ). Perused the writ petition papers.

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Sri G. Krishna Murthy, learned Senior Counsel restricts the prayer of the petitioner for consideration of representation/objection (Annexure-O) dated 26.10.2021 submitted pursuant to the Bank letter dated 30.08.2021 providing all the necessary documents.

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Learned Senior Counsel would submit that petitioners had sought for restructuring the loan under Annexures-C and D dated 09.08.2021. Pursuant to the above representations, Bank had sought certain documents by their letter dated 30.08.2021. In turn the petitioners submitted documents under letter (Annexure-O) dated 26.10.2021. Grievance of the petitioners is that the respondent-Bank has not considered the request of the petitioners for restructuring in spite of submitting all the documents under (Annexure-O) dated 26.10.2021.

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Sri Francis Xavier, learned counsel for the 1^st respondent-Bank submits that the scheme under which the petitioners sought benefit was closed on 30.09.2021 and hence the 1^st respondent-Bank could not consider their request. However, he submits that petitioners’ request would be considered in accordance with law.

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On considering the above submission of the learned counsel, it is clear that the decision of the 1^st

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respondent-Bank as to whether the petitioner was entitled for the benefit of restructuring of the loan, is not indicated to the petitioners by considering their request. The respondent-Bank is duty bound to take a decision on the request of the petitioner for restructuring of the account, that too when the respondent-Bank called for additional documents. Therefore, I am of the view, that without going into the merits of the petitioners’ case, I deem it appropriate to pass the following order :-

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a. The 1^st respondent-Bank is directed to consider the case of the petitioners for restructuring pursuant to representations (Annexure-C & D) dated 09.08.2021 and (Annexure-O) dated 26.10.2021 in accordance with law and to communicate the decision thereon to the petitioners.

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b. Till the 1^st respondent-Bank considers the request of the petitioners and communicates its

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decision to the petitioners, the respondent-Bank shall not precipitate the recovery action.

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With the above observation, the writ petition

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stands disposed of.

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SD/JUDGE

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NG* CT:bms

M/S Kanchana Industries v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

M/S Kanchana Industries v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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