Deductions from the Emergency Credit Line Guarantee Scheme loan should only be made with the concurrence of the entrepreneur, as the Scheme is intended to provide working capital to entrepreneurs to survive financial emergencies.

JUDGMENT :

The petitioner, Proprietor of a business, is before this Court aggrieved by the action of the 1st respondent-Bank withholding benefits of Emergency Credit Line Guarantee Scheme (ECLGS) to the petitioner. The petitioner seeks to command the 2nd respondent to implement the Scheme by issuing necessary directions.

2. The petitioner states that he is a businessman and holds an account with the 1st respondent-Bank. In the month of April, the Reserve Bank of India announced a special Scheme to help the entrepreneurs who were affected by the lockdown declared by the Government. The Scheme is called Emergency Credit Line Guarantee Scheme (ECLGS) and the petitioner submits that he is entitled to Rs.46 lakhs as loan under the Scheme. Though the Bank has sanctioned Rs.46 lakhs to the petitioner under the Scheme, the petitioner was permitted to utilise only an amount of Rs.17.75 lakhs. The balance amount, which is more than Rs.28 lakhs, has been appropriated by the Bank towards dues to them. The petitioner would submit that the ECLGS has been framed in view of the peculiar financial circumstance in the country and it is intended to provide working capital to entrepreneurs. The Bank has no authority to appropriate any amount from the working capital loan so provided, towards any dues to the Bank. Therefore, the 1st respondent is bound to pay the petitioner the balance amount of about Rs.28 lakhs.

3. The learned Standing Counsel appearing for the 1st respondent filed statement and additional statement and strongly resisted the contentions of the petitioner. The Standing Counsel submitted that whatever appropriation was made by the Bank, it was with the concurrence of the petitioner only. Had the Bank did not appropriate such amounts towards the dues of the petitioner, the petitioner would have been put to more grave situation and his account would have been turned into a NPA.

4. The learned Standing Counsel further pointed out that the petitioner has already approached a Consumer Forum and obtained interim orders against his accounts being declared as NPA. After getting the interim order from the Consumer Forum restraining the 1st respondent-Bank from declaring his accounts as NPA, the petitioner has approached this Court to get more money.

5. As per the directions of this Court, the Assistant Solicitor General of India filed a statement on behalf of the additional 4th respondent-National Credit Guarantee Trustee Company Limited. Paragraph 6 of the statement would make it clear that deduction from the ECLGS advances by the Money Lending Institutions is permissible under the Scheme only if the same is agreed between the borrower and the lender and not otherwise.

6. Heard learned counsel for the petitioner, learned Standing Counsel for the 1st respondent and learned ASGI representing the 3rd respondent and the additional 4th respondent.

7. In view of the statement filed on behalf of the additional 4th respondent, which is the National Credit Guarantee Trustee Company Limited, it is evident that no amount can be deducted from the ECLGS loan advanced to entrepreneurs towards any dues of the Bank without concurrence of the entrepreneur concerned. The learned counsel for the 1st respondent pointed out that as is evident from Ext.R1(a), which was issued as early on 09.07.2020, amounts were deducted from the ECLGS loan sanction as agreed by the petitioner. In the additional statement filed by the 1st respondent also, the learned counsel asserted that the petitioner has not disputed the fact that deductions were made with his concurrence. In such circumstances, the petitioner is not entitled to any relief. The learned Standing Counsel for the 1st respondent would further submit that in the event of a positive direction being given by this Court to disburse the entire amount of sanctioned ECLGS loan, the petitioner will be losing the benefits of credit made by the Bank which may ultimately cause more damage to the petitioner.

8. It is to be noted t