Petitioner sought writ of mandamus directing respondent banks to offer a One Time Settlement on a defaulted loan. The Court held that writ jurisdiction is not the proper remedy for contractual matters like loan rescheduling and dismissed the petition.
Mandamus directing the banks to offer a One Time Settlement was denied.
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12/10/2017 C O R A M THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MRS.JUSTICE R.SURESH KUMAR
Writ Petition No.26664 of 2017
M/s. Sri Sankara Fab rep. by its Partner V.N.Ranganathan Vellore District 632 513. ... Petitioner Vs
Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of mandamus to direct the respondents to pass appropriate orders on the petitioner's request letter, dated 12/5/2017 and the further communication of the second respondent to first respondent dated 15/5/2017 relating to the offer of One Time Settlement in respect of loan account No.00700326100011 of the petitioner Company availed with the second respondent within a stipulated time.
(Order of the Court was made by S.MANIKUMAR, J)
Borrower, who is unable to pay the instalments, due to the death of his son, and ailment suffered by his wife, has made a representation, dated 12/5/2017, to the Manager, Indian Overseas Bank, Ranipet, to adjust interest, towards payment of the debt amount.
"We have received request letter from the above party relatives Anjana Ranganathan, No.3 Sarvananagar, Annaikat Road, Walajah, Vellore District 632 513. The sankara fabrication availed term loan on 10/7/2010 for Rs.15.00 lakhs between 2013, they have paid 16,02,640/-. The present outstanding nearly 8 lakhs. Due to road accident, the original borrower Mr.Saravanan expired on 27/3/2014. Further the unit is not functioning and his mother Smt.Anjala Ranganathan given request letter for interest waiver for the entire outstanding 8.00 lakhs, regarding this they have sent to CM wing and regional office they have came along with lawyer and discussed the matter with SRM. The account is not showing NPA since 3 years they are not paying and they are paid at a time 12 lakhs the account became regular, if possible kindly consider under OTS what are the possible amount they have to settle within the stipulated time and advise the same."
"7.In our considered opinion it is not proper for the Court to interfere in such matters relating to recovery of loans. Such matters are contractual in nature and writ jurisdiction is not the proper remedy for this. A writ lies when there is an error of law apparent on the face of the record, or there is violation of law. No writ lies merely for directing one time settlement or for directing re-scheduling of the loan or for fixing instalments in connection with the loan. It is only the bank or the financial institution which granted the loan which can re-schedule it or fix one time settlement or grant instalments. The Court has no right under Article 226 of the Constitution to direct grant of one time settlement or for re-scheduling of the loan, or to fix instalments.
principles, and not a mere sympathy or compassion. No doubt, there be hardship to a party, but unless violation of law is shown the Court cannot interfere. Holding up recoveries of loans by unwarranted Court orders is causing incalculable harm to our economy, since unless the loan is recovered a fresh loan cannot be granted to needy persons. The Courts must keep these considerations in mind."
"42. Some of the learned counsel submitted that the Court should direct one time settlement or fixing of installment or rescheduling the loan. In Tamilnadu Industrial Investment Corporation Vs. Millenium Business Solutions Private Limited, 2004 (5) CTC 689, it has been held that this Court cannot pass any such order in writ jurisdiction, since directing one time settlement or granting installments is really re-scheduling the loan, which can only be done by the bank or financial institution which granted the loan. This Court under Article 226 of the Constitution cannot reschedule a loan. A writ is issued when there is violation of law or error of law apparent on the face of the record, and not for rescheduling loans. The Court must exercise restraint in such matters, and not depart from well settled legal principles.
mvs.
sd/
ASSISTANT REGISTRAR
/TRUE COPY/
SUB-ASSISTANT REGISTRAR
To
1. The Regional Manager
Indian Overseas Bank
Vellore Region
Vellore.
2. The Branch Manager
Indian Overseas Bank
Ranipet
Vellore District.
+1CC to MR.C.PRABAKARAN Advocate SR.NO.73545
W.P.No.26664 of 2017
RSY[CO]
MK:13/11/2017
2 issues framed by the court
Whether the High Court can issue a writ of mandamus directing a bank to offer a One Time Settlement to a borrower.
Whether the Court can interfere in contractual matters relating to the rescheduling of loans or fixing of instalments under Article 226.
Colour shows how this judgement treated each authority
Tamilnadu Industrial Investment Corporation Vs. Millenium Business Solutions Private LimitedDistinguished¶16
Tamilnadu Industrial Investment Corporation Vs. Millenium Business Solutions Private Limited, 2004 (5) CTC 689
Calcutta Gas Co. v. State of West BengalReferred¶17
Calcutta Gas Co. v. State of West Bengal, AIR 1963 SC 1044 · Who else cites this
M/s.Digivision Electronics Ltd. Vs. Indian BankDistinguished¶21
M/s.Digivision Electronics Ltd. Vs. Indian Bank, 2005 (3) LW 269
R.Nanjappan Vs. The District Collector, CoimbatoreReferred¶23
R.Nanjappan Vs. The District Collector, Coimbatore, 2005 WLR 47
Chandra Singh Vs. State of RajasthanReferred¶23
Chandra Singh Vs. State of Rajasthan, JT 2003 (6) SC 20 · Who else cites this
The Managing Director, Tamil Nadu State Transport Corporation Vs. P.EllappanReferred¶23
The Managing Director, Tamil Nadu State Transport Corporation (Madurai Division-IV) Ltd., Dindigul Vs. P.Ellappan, 2005 (1) MLJ 639
Ramniklal N.Bhutta and Another Vs. State of MaharashtraReferred¶23
Ramniklal N.Bhutta and Another Vs. State of Maharashtra, 1997 (1) SCC 134 · Who else cites this
M/s. Sri Sankara Fab
The Regional Manager, Indian Overseas Bank
The Branch Manager, Indian Overseas Bank
S.Manikumar
R.Suresh Kumar
As recorded by the court registry
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