Point of Law: Article 226 of Constitution of India, cannot replace wisdom of lender/banker in process of lending unless there are compelling reasons, in a sense that there are all-around violations of rules and regulations or any of statutory provisions in this regard.

JUDGMENT :

K. BABU, J.

1. The prayers in this Writ Petition filed under Article 226 of the Constitution of India are as follows:

“(i) Issue a writ of Certiorari or any other appropriate writ or direction orders calling for records leading to Exhibit P-14 and quash the same.

(ii) Issue a writ of Mandamus or other appropriate writs, orders or directions directing the respondents 6 to 8 to grant the benefits of restructuring of the loan accounts of the petitioner as requested in Exhibit P-13 by granting the benefits of the circulars of the RBI dated 06-08-2020 and 05-05-2021 thereby to regularize the loan account.

(iii) Declare that the petitioner is entitled to get the benefit of the resolution framework of the RBI dated 06-08-2020 and 05-05-2021 and Exhibit P-14 order issued declining the benefits of the RBI Circular is illegal.

(iv) Issue a writ of Mandamus or other appropriate writs, orders or directions directing the respondents 6 to 8 to keep in abeyance all the recovery measures initiated against the petitioner under the SARFAESI Act pursuant to Exhibit P-6 possession notice.

(v) Render such other orders or direction as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”

2. Heard Sri. Sajeev Kumar K.Gopal, the learned counsel appearing for the petitioner and Sri. Sunil Shankar, the learned Standing Counsel appearing for the respondent Bank.

3. The petitioner is the proprietor of Darshana Cinema Complex, Piravom in Ernakulam district. The petitioner availed a loan from the South Indian Bank (respondent No. 6) in 2015 for the purpose of renovation of the theatre complex. The petitioner had deposited the title deeds in respect of 99.78 cents of land and the building thereon, the theatre complex and also another 39 cents of land in Survey No. 595/9/2 of Piravom Village with intent to create an equitable mortgage.

4. The petitioner committed default in repaying the amount due to the bank. On 29.12.2020, the bank classified the loan account as Non Performing Asset (NPA). The bank initiated proceedings under the SARFEASI Act by issuing notice under Section 13(2) of the SARFEASI Act. Thereafter, the bank obtained symbolic possession of the theatre complex as well as the other immovable property. While so, the petitioner filed W.P. (C) No. 25727/2021 before this Court. In W.P. (C) No. 25727/2021 on 30.11.2022 this Court passed the following judgment:

“5. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the 6th respondent bank, I am of the opinion that the contentions advanced by the learned counsel for the respondent bank need not be examined at this point of time and the petitioner can be permitted to approach the bank for restructuring or for One Time Settlement. Accordingly, this writ petition will stand disposed of, directing that the if the petitioner approaches the bank with a suitable proposal for restructuring or for One Time Settlement, the competent authority of the 6th respondent bank shall take a decision on such proposal, without undue delay and communicate its decision to the petitioner, provided the proposal is made within a period of two weeks from today. The question as to whether the petitioner is entitled to the benefit of any of the Circulars issued by the Reserve Bank of India shall also be considered by the 6th respondent bank. Till such time as a decision is taken on the proposal to be submitted by the petitioner, further proceedings under the provisions of the SARFAESI Act shall remain suspended. I make it clear that this benefit will be available to the petitioner only if he submits a proposal as above, within the period specified.”

5. The petitioner submitted Ext.P13 proposal for restructuring of the loan account pursuant to the judgment of this Court. The bank rejected the proposal of the petitioner for restructuring of the loan. The learned counsel for the petitioner submitted that the reason cited by the bank for rejecting Ext.P1