Disposed

Penda Marketing Private Ltd. v. the Branch Manager

Kerala HC19 Feb 2019WP(C)/3647/2019

Case brief

AI extract

What is this about?

Single judge Court held that while it cannot direct restructuring, the Bank must consider the petitioner's request within one month per RBI guidelines and afford hearing rights. Liberty granted to approach the Bank.

What did the court decide?

Liberty to petitioners to approach the Bank for restructuring or closure within one week; Bank to decide within one month after hearing.

Penda Marketing Private Ltd. Vs the Branch Manager — Banking and Recovery | Kerala HC (2019)

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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 DEVAN RAMACHANDRAN

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TUESDAY ,THE 19TH DAY OF FEBRUARY 2019 / 30TH MAGHA, 1940

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WP(C).No. 3647 of 2019

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PETITIONER/S:

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PENDA MARKETING PRIVATE LTD. NEW NO.30, OLD NO. 12, 4TH STREET, DR. SUBBARAYAN NAGAR, KODAMBAKKAM, CHENNAI-600024, REPRESENTED BY ITS AUTHORIZED SIGNATORY, MUHAMMED SHARSHAD BANIYANDY, AGED 44 YEARS, S/O BARAYIL ABDULLAH.

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BY ADVS. SRI.K.R.AVINASH (KUNNATH) SRI.ABDUL RAOOF PALLIPATH

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RESPONDENT/S:

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1 THE BRANCH MANAGER FEDERAL BANK LTD, LCRD/CHENNAI DIVISION, 1ST FLOOR NO.57, ROYAPETTAH HIGH ROAD, NEAR EPF OFFICE, ROYAPETTAH CHENNAI-600 014.

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2 THE AUTHORIZED OFFICER, FEDERAL BANK LTD. LCRD/CHENNAI DIVISION, 1ST FLOOR NO. 57, ROYAPETTAH HIGH ROAD, NEAR EPF OFFICE, ROYAPETTAH CHENNAI -600 014.

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3 THE FEDERAL BANK, HEAD OFFICE, ALUVA, FEDERAL BANK TOWERS, ALUVA-683 101.

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BY ADVS. SRI.K.K.CHANDRAN PILLAI (SR.) - SC SMT.NAMITHA NAMBIAR SMT.S.AMBILY - SC SMT.VANIAH MARIA DOMINIC SRI.SAJI THOMAS

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WPC 3647/19

JUDGMENT

The petitioner is stated to be a Company

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incorporated under the provisions of the

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Companies Act, 1956 and they say that they have been operating as a Micro, Small and Medium Enterprise (MSME) for the last more than a

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decade. They assert that they have been

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operating their loan accounts availed from the 1^st respondent-Bank satisfactorily, but that they have been badly hit recently on account of the floods in Chennai last year as also on account of the policy of demonetization of the Government of India. They, therefore, say that they are entitled to the benefit of having their

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loan accounts restructured as offered to all

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MSMEs by the Reserve Bank of India, through

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Ext.P3 guidelines. They, thus pray that the 1^st respondent be directed to consider Ext.P2 representation, which they say, is an application made by them seeking such

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WPC 3647/19

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restructuring, within a specific time frame.

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Sri. K.K. Chandran Pillai, the learned

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Senior Counsel, instructed by Smt. Ambily, the learned Standing Counsel for the 1^st respondentBank, submits that the account of the petitioner has already been classified as a Non-Performing Asset (NPA) much earlier than the floods in Chennai and therefore, that normally the Bank cannot offer them the benefit of restructuring as per Ext.P3-Circular. He says that, in fact,

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the Bank had been very lenient to the petitioner in the past and had been giving them all benefits, including for the regularisation of the loans; but that they were not willing either to regularise or to satisfactorily service the loan account in spite of such opportunities. The learned Senior Counsel, therefore, says that neither Ext.P2 nor any other request made by the petitioner, as projected in this writ petition, is now deserving to be considered by the Bank,

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particularly taking note of the strict terms of Ext.P3-Circular.

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Counsel as afore, the fact remains that as per Ext.P3 Circular, even an account classified as an NPA can be restructured, subject to the conditions in paragraph 3 of the said circular. I am not saying for a moment that the petitioner is entitled to any such benefit, but I am only recording that the Circular does not fully shut

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down the opportunity to an MSME to seek restructuring of their loan accounts, merely because they have been classified as NPA. Of

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course, the question as to whether the

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petitioner should be given such benefit or whether the accounts held by them are deserving restructuring are matters that are purely within

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the decisional realm of the 1^st respondent-Bank

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and it would not be possible for this Court to issue any affirmative direction to grant such

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benefit to the petitioner.

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That said, however, I am firm in my

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mind that the petitioner cannot be shut off from the liberty of approaching the Bank for the benefits under Ext.P3 Circular or to seek any other legitimate relief, including for closure

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or regularisation of the account and I am

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certain that the Bank must consider the same in terms of law and subject to their discretion under the extant guidelines.

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In the afore perspective, even though I do

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not propose to grant any of the reliefs as have been prayed for in this writ petition, I leave liberty to the petitioner to approach the Bank, either for restructuring or regularisation or closure of the account, as they may be advised, within a period of one week from the date of

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receipt of a copy of this judgment; in which event, the competent Authority of the Bank will consider the same, after affording an

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WPC 3647/19

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opportunity of being heard to the petitioner and issue the resultant order/proceedings to the petitioner as expeditiously as is possible, but not later than one month from the date of receipt of a copy of the representation from the petitioner.

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Sd/-

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DEVAN RAMACHANDRAN

JUDGE

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APPENDIX

PETITIONER'S/S EXHIBITS:

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EXHIBIT P1	TRUE COPY OF THE NOTICE OF THE 2ND RESPONDENT DATED 2.11.2018.
EXHIBIT P2	TRUE COPY OF THE REPRESENTATION BEFORE THE SENIOR MANAGER, MYLAPORE, CHENNAI DATED 21.1.2019.
EXHIBIT P3	TRUE COPY OF THE CIRCULAR DBR. NO. BP. BC 18/21.04.048/2018/19 DATED 1.1.2019 ISSUED BY RESERVE BANK OF INDIA.
EXHIBIT P4	TRUE COPY OF THE MSME (MICRO, SMALL AND MEDIUM ENTERPRISES) REGISTRATION CERTIFICATE.

Penda Marketing Private Ltd. v. the Branch Manager

Case brief

What is this about?

What did the court decide?

Penda Marketing Private Ltd. v. the Branch Manager

Case brief

What is this about?

What did the court decide?

What the court decided

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