M/S Indium Properties Private Limited Vs the Reserve Bank of India

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5^TH DAY OF MARCH, 2025

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO.11900 OF 2022 (GM-RES)

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BETWEEN:

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M/S. INDIUM PROPERTIES PRIVATE LIMITED A COMPANY REGISTERED UNDER

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THE COMPANIES ACT, 1956 NO.204/C, 6^TH MAIN ROAD 27^TH CROSS STREET, III BLOCK JAYANAGAR, BENGALURU - 560 011 REP. BY ITS AUTHORISED SIGNATORY SRI JAYANTH NAGA DIRECTOR.

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…PETITIONER

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(BY SRI PRABHULING NAVADAGI, SR. ADVOCATE FOR SRI SANTOSH S. NAGARALE, ADVOCATE)

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AND:

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Digitally signed by NAGAVENI Location: High Court of Karnataka

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THE RESERVE BANK OF INDIA

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18^TH FLOOR, CENTRAL OFFICE BUILDING SHAHID BHAGAT SINGH ROAD

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MUMBAI - 400 001 REP. BY ITS GOVERNOR.

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THE GENERAL MANAGER REGIONAL OFFICE RESERVE BANK OF INDIA NRUPATHUNGA ROAD BENGALURU -560 001.

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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DEVELOPMENT BANK OF SINGAPORE LIMITED INCORPORATED UNDER COMPANIES ACT HAVING ITS OFFICE AT NO.93 TKN MANSION, K.H. ROAD BENGALURU -560 027 REPRESENTED BY ITS CHIEF MANAGER/MANAGER.

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AMENDED VIDE COURT ORDER DATED 12.09.2023.

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…RESPONDENTS

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(BY SRI BRILIAN MARAK, ADVOCATE FOR SRI MAHESH A. S., ADVOCATE FOR R3 R2 - SERVED AND UNREPRESENTED)

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THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED COMMUNICATION AT ANNEXURE-L DTD.01.6.2022 ISSUED BY THE R-3 WHEREIN IT IS COMMUNICATED AS IPPL ACCOUNT IS RUNNING UNDER SMA-2 PLEASE ARRANGE TO REMIT THE OVERDUES ON MOST URGENT BASIS AND AVOID NPA SLIPPAGE WHICH IS ON 20.6.2022.

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY,

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ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA

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ORAL ORDER

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The petitioner is before this Court seeking the following

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prayer:

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“a. To issue writ in the nature of certiorari and quash the impugned communication at ANNEXURE L dated 01.06.2022 issued by the Respondent No 3 wherein it is communicated as " IPPL Account is running

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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under SMA-2, please arrange to remit the overdues on most urgent basis and avoid NPA Slippage which is on 20.06.2022 ".

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b. To issue writ in the nature mandamus directing the RBI to issue directions to the Respondent No 3 Bank to follow its Rules and Regulations in classifying the NPA Account and also not to report the classification to CIBIL or status of the account.

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c. To issue writ in the nature of mandamus directing the Respondent No 3 Bank to consider the request of the Petitioner Company dated 30.05.2022 for extending the loan for a further period of 24 months or in the alternative to adhere or to implement to its loan sanction letter dated 14.12.2017 by releasing the remaining amount of Rs 33.5 Crores,

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d. Grant any other appropriate relief as deem fit considering the circumstances of the matter.”

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During the subsistence of the subject petition much

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water is flown by way of settlement between the respondent - bank and the petitioner. The intention of the petitioner was to clear the loan. On the request of the petitioner, the bank has generated certain communications by fixing the time schedule for repayment and accepting the repayment schedule as was projected by the petitioner.

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This Court in the subject petition recording the submissions made by the parties, from time to time and has passed several orders. The order dated 18.07.2022, reads as follows:

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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“ ORDER ON I.A.No.1/2022

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I.A.No.1/2022 is filed seeking extension of time to comply with the interim order dated 17.06.2022.

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Learned counsel for the respondent No.3 submits that the interim order is not complied by depositing second part of the interim order.

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This Court by interim order dated 07.06.2022, stayed the impugned communication at Annexure-L dated 01.06.2022 subject to the following conditions:

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a. “The petitioner to deposit a sum of Rs.1.00 Crore within two weeks from today;

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b. Another sum of Rs.1.00 Crore within another two weeks thereafter and

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c. Another sum of Rs.50,000/- within another two weeks from the date of making the second payment.”

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Learned senior counsel Sri.P.S.Rajagopal for petitioner submits that as directed, the petitioner has deposited a sum of Rs.1.00 Crore within two weeks from the date of interim order. But due to financial constraint, petitioner is not able to deposit another sum of Rs.1.00 Crore within another two weeks thereafter. Therefore, learned senior counsel would pray for extension for the reasons stated in the application.

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Taking note of the circumstances explained, I deem it appropriate to extend time to deposit another sum of Rs.1.00 Crore by another two weeks.

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If the petitioner fails to deposit the amount as above, interim order stands automatically rescinded.

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Accordingly, I.A.No.1/2022 stands disposed of.”

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The order dated 08.09.2023 is as follows:

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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“Learned Counsel Ms.Radhika Vijayaraghavan, is requested to take notice for respondents No.1 and 2-RBI.

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Learned Counsel for the petitioner is directed to serve two sets of copies of the writ petition along with Annexures on the learned Counsel for respondents No.1 and 2.

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Learned Senior Counsel Sri.Vikram Huilgol, appearing on behalf of the petitioner submits that the directions given by this Court on 18.07.2022 have been complied by the petitioner, inasmuch as the said amount of Rs.1.00 Crore has been deposited with respondent No.3-Bank.

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Re-list this matter on 12.09.2023.

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Interim order granted earlier stands extended till the next date of hearing.”

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The order dated 12.09.2023 is as follows:

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“Learned counsel Ms.Radhika Vijayaraghavan, submits that she is not on the panel of the 1st respondent Reserve Bank of India.

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Office is directed to remove the name of the learned counsel from the cause list.

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Issue emergent notice to respondents No.1 and 2.

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Petitioner is also permitted to take out hand summons to respondent No.2.

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Learned Senior Counsel Sri Vikram.A.Huilgol appearing on behalf of the petitioner submits that the description of the 3rd respondent has to be amended since the bank is now known as ‘DBS Ltd.’.

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Permission as sought for is granted.

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Learned counsel for the petitioner to carry out the amendment in the cause title.

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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Re-list this matter on 27.09.2023.

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Interim order granted earlier stands extended till the next date of hearing.”

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The order dated 27.09.2023 is as follows:

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“Learned counsel Sri Akshay submits that he has already filed vakalath on behalf of respondent No.3.

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Office to verify and show the name of the learned counsel in the cause list.

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This Court had permitted the petitioner to take out hand summons to respondent No.2, the same has not been taken by the petitioner. Learned counsel submits that hand summons will be taken to respondent No.2 in a day or two and will be served on respondent No.2.

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In the meanwhile, the amendment to the cause title shall also be carried out in terms of the directions issued on 12.09.2023.

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Interim order granted earlier stands extended till the next date of hearing.

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Re-list this matter on 09.10.2023.”

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The order dated 20.12.2024 is as follows:

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“ORAL ORDER

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Sri.Prabhuling K Navadgi, learned Senior Counsel upon instructions submit that the petitioner would be making payment of sum of Rs.3,95,03,324/- by end of this month, thereby complying the agreement entered into between the petitioner and respondent-Bank. Though there is a delay in payment, the amount paid could be as per agreement in his submission.

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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In that view of the matter, re-list on 08.01.2025 to ascertain the payments have been made so as to pass further orders in terms of the memo dated 20.12.2024.

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Till then respondent-Bank shall not report the non payment to CIBIL till 30.12.2024.

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Interim order granted earlier stands extended till the next date of hearing.

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Re-list on 08.01.2025.”

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The order dated 08.01.2025 is as follows:

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“Learned Senior Counsel Sri Prabhuling K.Navadgi, appearing for the petitioner points out to the memo dated 20.12.2024 filed before this Court and submits that although the petitioner delayed the payments in terms of the agreed schedule by a period of three months, nevertheless, on instructions, it is submitted that the respondent-Bank has agreed to re-schedule the payment extending the period by another three months.

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Learned Counsel for the respondent-Bank is requested to secure instructions in this regard and make submissions. It would be better if instructions are received in writing.

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Re-list this matter on 15.01.2025.”

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4. Learned senior counsel for the petitioner submits

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that there has been default in adhering to the repayment schedule on the score that they were seeking extension of time. He would submit that extension of time would not be sought and repayment schedule would be adhered to.

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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In the interregnum, the issue now is that the petitioner has defaulted to repay the amount of Rs.2.25 crores. Therefore, the learned counsel for respondent – bank is vehement in his submission that no indulgence should be shown to the petitioner and permission be granted to initiate proceedings under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’).

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In the light of the aforesaid circumstance and the order passed by this Court recording the communications between the parties, I deem it appropriate to direct the petitioner to pay Rs.1.5 crores on or before 30.03.2025 and the remaining of the amount that is now in default, apart from sticking to the repayment schedule on those agreed upon between the parties, to be paid on or before 15.04.2025. In the event, the petitioner would deviate from the repayment schedule or the conditions now stipulated. The bank is at liberty to initiate proceedings invoking the provisions of the SARFAESI Act.

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NC: 2025:KHC:9479 WP No. 11900 of 2022

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With the aforesaid observations, the following:

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ORDER

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a. The petition is disposed.

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b. The petitioner shall pay Rs.1.5 crores on or before 30.03.2025 and the remaining of the amount that is now in default, apart from sticking to the repayment schedule on those terms agreed upon between the parties, to be paid on or before 15.04.2025. It is needless to observe that any deviation of what is directed hereinabove, the entertainment of the petition again would become a doubt.

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c. In the light of the aforesaid conditions imposed and the acceptance of the respondent – bank in the repayment schedule, no precipitative action to be taken by the bank against the petitioner including reporting to the CIBIL.

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d. In the event of any deviation, even for one instance,

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the bank is at liberty to take any action in accordance with law.

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SD/-

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____________________ JUSTICE M.NAGAPRASANNA

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NVJ

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List No.: 1 Sl No.: 52 CT:SS

M/S Indium Properties Private Limited v. the Reserve Bank of India

Case brief

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M/S Indium Properties Private Limited v. the Reserve Bank of India

Case brief

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