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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
P.S. Dinesh Kumar, J.
Mr. Balkishan Boob S/O Late Jaikishan Boob – Petitioner
Versus
Bank Of Maharashtra, Bangalore Zonal Office, Bengaluru – Respondent
Writ Petition No. 1267 OF 2021 (GM-RES)
Decided On : 25-02-2021
CONSTITUTION OF INDIA - ARTICLE 226 - SARFAESI Act, 2002 - Section 17(1) - Mortgaged property - Borrowed money – Auction - M/s. Bhagwan Cotton Ginners Pvt. Ltd., has borrowed money from Bank of Maharashtra during - Bank has initiated recovery proceedings - Property mortgaged to Bank has been brought to auction - Owner of mortgaged property has presented this writ petition with a prayer inter alia to direct respondent - Bank to consider petitioner's OTS offer made in his representation dated in terms of 'Maha Rahat Yojana 2020-21' and 'Maha Samadhan Yojna 2020-21' - Submitted that petitioner has submitted his representation (Annexure-S) with an offer to pay t4A Crores under OTS Scheme - Since Bank has not considered OTS proposal, petitioner has presented this writ petition - He submitted that new OTS Scheme is non-discriminatory and non-discretionary in nature –
Finding of the Court:
petitioner has been actively involved with borrower - Company, as borrower has filed writ petition in Kalaburagi Bench and petitioner as Ex-Director and guarantor has filed this writ petition - Further, petitioner has suppressed material facts with regard to proceedings in Kalaburagi Bench - It is settled that relief under Article 226 is discretionary in nature and can be exercised only when a litigant approaches Court with clean hands- Company and petitioner, petitioner shali not be entitled for equitable and discretionary relief under Article 226 of Constitution of India - Though Bank has declared account as NPA, borrower and guarantor have successfully stalled recovery of public money till date –
Result: Writ petition is dismissed.
ORDER :
Heard Shri. Dhyan Chinnappa, learned Senior Advocate for petitioner and Shri. D.S. Ramachandra Reddy, learned Advocate for respondent.
2. M/s. Bhagwan Cotton Ginners Pvt. Ltd., has borrowed money from Bank of Maharashtra during 2014. Bank has initiated recovery proceedings. Property mortgaged to the Bank has been brought to auction. The owner of the mortgaged property has presented this writ petition with a prayer inter alia to direct respondent -Bank to consider petitioner's OTS offer made in his representation dated January 16, 2021 in terms of 'Maha Rahat Yojana 2020-21' and 'Maha Samadhan Yojna 2020-21'.
3. Shri. Dhyan Chinnappa submitted that petitioner has submitted his representation on January 16, 2021 (Annexure-S) with an offer to pay Rs.4.4 Crores under the OTS Scheme. Since Bank has not considered the OTS proposal, petitioner has presented this writ petition. He submitted that the new OTS Scheme is non-discriminatory and non-discretionary in nature. As per the scheme, borrower's NPA account falls under the category 'Doubtful-III' which requires payment of 70% of the secured portion and 35% of the unsecured portion of the loan. Bank is duty bound to consider the OTS proposal. On January 27, 2021, this Court has directed petitioner to deposit Rs.One Crore in two installments on or before February 3, 2021. Petitioner has paid the said amount and submitted another representation to the Bank on February 2, 2021 to consider OTS for Rs.5.05 Crores. However, the Bank has rejected the said offer on February 3, 2021. Petitioner has filed an application to amend the writ petition.
4. Petition is opposed by the Bank. Shri. D.S. Ramachandra Reddy, learned Advocate for the Bank submitted that the Company has borrowed Rs.1.87 Crores on August 30, 2014 and Rs.8 Crores on September 30, 2014. Industrial Plot measuring 2 acres 9 guntas situated in the Industrial area, Hyderabad Road, Raichur has been mortgaged to the Bank. On December 21, 2016, both accounts were clubbed and declared as 'NPA'. Bank initiated recovery proceedings and a 'Possession Notice' was issued by the Bank. The Company challenged the Possession Notice by filing an application under Section 17(1) of the SARFAESI Act, 2002 and it has been dismissed by the DRT vide order dated November 18, 2019. The said order has attained finality.
5. On December 24, 2018, Bank offered 'One Time Settlement' as per the ledger balance of Rs.8.57 Crores and offered to receive Rs.6.05 Crores before February 28, 2019. Borrower has paid 10% deposit amount and did not pay the balance.
6. On March 25, 2019, petitioner gave a representation for extension of OTS and the Bank rejected it on the same day and called upon petitioner to deposit the balance amount of Rs.5.44 Crores on or before March 31, 2019.
7. The Company has filed Writ Petition No.201729/2019 before Kalaburagi Bench of this Court and the same has been dismissed. The Company has filed writ appeal thereon in W.A. No.200064/2019 and the same is pending.
8. In the meanwhile, time to pay under the scheme was extended till June 30, 2019, but neither the Company nor the petitioner have paid any money.
9. On August 20, 2019, Bank again offered another OTS under 'Maha-Riyayat 2019-2020' and called upon the Company to pay Rs.5.64 Crores based on the ledger balance of Rs.7.97 Crores. The amount was required to be paid on or before September 30, 2019. Petitioner did not avail this offer also. The time was again extended till March 31, 2020. Yet, neither did the Company nor the petitioner pay any money.
10. Bank brought the property for sale by issuing 'Sale notice' on December 19, 2020. The auction was scheduled on January 28, 2021. The Company again submitted a representation on January 16, 2021 offering to pay Rs.4.40 Crores under the aforementioned 'Maha Samadhan Yojana 2020-21' OTS Scheme. Bank has rejected the said offer. It has taken possession of the property. Petitioner after obtaining an interim order from this Court has submitted a
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