Disposed

V.P.Siddique v. Authorized Officer, State Bank of India

Kerala HC22 Feb 2013WP(C)/346/2013

Case brief

AI extract

What is this about?

Petitioner challenged denial of One Time Settlement Scheme benefits alleging bank's wrongful implication of default due to non-payment of 25% deposit. Court held 25% payable only upon receipt of sanction letter, which bank failed to produce as communicated, and deferred coercive action.

What did the court decide?

Bank to pass an order on petitioner's request and communicate sanction, settle liability, and defer further coercive action until orders are passed.

V.P.Siddique Vs Authorized Officer, State Bank of India — Banking and Recovery | Kerala HC (2013)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE ANTONY DOMINIC

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FRIDAY, THE 22ND DAY OF FEBRUARY 2013/3RD PHALGUNA 1934

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WP(C).No. 346 of 2013 (P)

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PETITIONER(S):

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V.P.SIDDIQUE, AGED 31 YEARS, S/O. KUNHAMMEDKUTTY, VALIYAPARAMBIL HOUSE, PUTHUPALLY, TIRUR, MALAPPURAM DISTRICT-676 102.

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BY ADVS.SRI.R.T.PRADEEP SRI.P.BIJIMON

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RESPONDENT(S):

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1. AUTHORIZED OFFICER, STATE BANK OF INDIA, REGIONAL BUSINESS OFFICE, KOZHIKODE, 1ST FLOOR SOUTHERN TRADE TOWER, PUSHPA JUNCTION, FRANCIS ROAD KOZHIKODE-673 002.

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2. THE MANAGER

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STATE BANK OF INDIA, TIRUR TOWN, P.B.NO.56, TIRUR 676 102

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BY ADV. SRI.R.S.KALKURA FOR BANK

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22-02-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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MJL

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WP(C).No. 346 of 2013 (P)

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APPENDIX

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PETITIONER'S EXHIBITS:

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P1 : COPY OF THE NOTICE DATED 19.12.2011 UNDER SECTION 13(2) OF SARFAESI ACT.

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P2 : COPY OF THE JUDGMENT DATED 21.2.2012 IN WP(C) NO. 4178/2012.

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P3 : COPY OF THE STATEMENT OF ACCOUNT FROM 1.11.2011 TO 31.3.2012 IN THE ACCOUNT OF THE BUSINESS CONCERN OF THE PETITIONERS.

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P4 : COPY OF THE STATEMENT OF ACCOUNT OF THE BUSINESS CONCERN OF PETITIONER FROM 1.4.2012 TO 6.12.2012.

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P5 : COPY OF THE RECEIPT DATED 31.7.2012 REGARDING THE REMITTANCE OF RS.36000/-.

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P6 : COPY OF THE OTS SCHEME OF THE BANK WHICH IS NIL DATED.

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RESPONDENTS' EXHIBITS: NIL

/TRUE COPY/

P A TO JUDGE

MJL

ANTONY DOMINIC,J

W.P.(C) No.346 of 2013

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Dated this the 22^nd day of February, 2013

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JUDGMENT

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Petitioner is the proprietor of a business concern by name 'Mughal Agencies'.

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In 2007, he availed of a cash credit facility of Rs.7

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lakhs from the respondent Bank. In 2011, November, the account was classified as NPA and SARFAESI proceedings were initiated. When the recovery proceedings continued, he filed W.P.c) No.4178 of 2012 before this Court. That writ petition was disposed of by Ext.P2 judgment directing payment of Rs.1 lakh each on 15.03.2012 and 15.04.2012. He was also directed to pay the balance amount in monthly instalments of Rs.50,000/- each commencing from 15.05.2012.

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In the meanwhile, a One Time Settlement

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Scheme was introduced by the Bank and the petitioner applied for the benefit of the Scheme. In compliance with

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W.P.(c) No.346 of 2013 : 2 :

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the condition of the Scheme, the petitioner remitted Rs.36,000/- being the 5% as provided in Clause 6 of Ext.P6 of the said Scheme. The amount was remitted on 31.07.2012. Thereafter, alleging that on account of the fact that the petitioner had obtained Ext.P2 judgment from this Court, the benefit of the One Time Settlement scheme was not extended to him, this writ petition was filed.

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Before this Court respondents took the stand that

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the benefit of the scheme was not extended to the petitioner for the reason that the petitioner did not remit 25% as contemplated in Clause 6 of Ext.P6. However, the specific case of the petitioner is that the 25% provided in Clause 6 of Ext.P6 becomes payable only on communication of the sanction letter and that such a sanction letter has not been communicated to him so far.

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Clause 6 of Ext.P6 reads thus:

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Payment : i. The borrower has to deposit

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W.P.(c) No.346 of 2013

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: 3 :

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5% of the amount outstandings as on the date of NPA at the time of submission of the application to indicate his willingness for OTS, failing which the application will not be processed. In the event the application for OTS is rejected by the Bank, such payment, which shall be held in separate account, will be refunded without interest within three months.

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ii. The borrower has to deposit 25% of the OTS amount upfront on receipt of sanction letter. This will include the amount deposited along with the application for OTS.”

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iii. The balance 75% of the OTS amount is to be paid, without interest, within six months from the date of sanction of OTS.

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iv. However, the balance amount can also be paid within 12 months from the date of sanction of OTS(the validity period) together with interest@ the documented rate/(PLR-2%) Base rate, whichever is lower, failing which the OTS Sanction will be rendered infructuous.”

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Reading of the above provision shows that a defaulter should initially make a deposit of 5% of the amount outstanding to claim the benefit of the scheme

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W.P.(c) No.346 of 2013 : 4 :

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and question of payment of 25% arises only on communication of sanction letter. The respondents have not produced any material before this Court to conclude that such a sanction letter was communicated to the petitioner. If that be so, I am unable to accept the case of the respondent Bank that there was default on the part of the petitioner in paying 25% to deny the benefit of Ext.P6.

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In such circumstances, the writ petition is

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disposed of with the following directions:

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The Bank will pass an order on the request of the petitioner for the benefit of Ext.P6 and communicate the same to him, within

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three weeks of production of a copy of this judgment.

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On such communication, the petitioner will comply with the conditions imposed by the

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Bank and settle the liability as communicated by the Bank.

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W.P.(c) No.346 of 2013

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: 5 :

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In order to enable the Bank to take a

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decision and communicate the same and for

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settling the liability, I direct that until orders are passed and communicated the same, further coercive action against the petitioner will stand deferred.

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Petitioner will produce a copy of this judgment and the writ petition before the respondent Bank for compliance.

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Writ Petition is disposed of as above.

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Sd/- ANTONY DOMINIC, JUDGE

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V.P.Siddique v. Authorized Officer, State Bank of India

Case brief

What is this about?

What did the court decide?

V.P.Siddique v. Authorized Officer, State Bank of India

Case brief

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What did the court decide?

What the court decided

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