The court emphasized the significance of compliance with the tripartite agreement and the implications of the SARFAESI Act in the context of loan discharge and asset takeover.

JUDGMENT :

1. The present writ petition has been filed for issuance of direction upon the respondent-Punjab National Bank to enter into a tripartite agreement between the petitioner, Yash Alloys Pvt. Ltd. and Punjab National Bank for giving effect to take over the entire induction furnace unit and rolling mill unit of the respondent no.6 along with land, measuring an area of 1.78 acres and 2.44 acres, standing in the name of the respondent no.7-Rajeev Kumar Agarwalla, who is Director of the respondent no.6. Further prayer has been made for declaration that the action of the respondent-Bank in declaring loan account of the respondent no.6 as non-performing assets (for short ‘NPA’) is wholly illegal and arbitrary. The petitioner has also prayed for declaration that the action of the respondent-Bank on one hand in not entering into tripartite agreement with the petitioner and the respondent no.6 for facilitating to take over the assets of the respondent no.6 and on the other hand declaring the loan account of the respondent no.6 as NPA is wholly illegal, arbitrary and contrary to the principles of promissory estoppel and legitimate expectations.

2. Learned counsel for the petitioner submits that the respondent no.6 was an industrial unit in Ramgarh district, wherein an induction furnace unit and rolling unit was established. The respondent no.6 obtained loan from the respondent-bank. It is further submitted that the petitioner entered into negotiations with the respondent no.6 for purchase of its induction furnace unit and rolling unit and, accordingly, an agreement was executed on 24th March, 2021 between the petitioner and the respondent no.6 for purchase of the said units. The petitioner agreed to purchase the said industrial units of the respondent no.6 on payment of total consideration of Rs.14.00 crores. Pursuant to the said agreement, the petitioner was given possession of the entire industrial unit of the respondent no.6 with effect from 1st April, 2021 and even possession letter was duly received by the respondent-bank. It is also submitted that there was an understanding between the petitioner and the respondent-bank along with the respondent no.6 that entire consideration to the extent of Rs.14.00 crores towards purchase was to be utilized for discharging loan liability of the respondent no.6. It was further agreed that in order to facilitate the petitioner to pay the said amount, a tripartite agreement would be entered among the petitioner, respondent no.6 and the respondent-bank, however, no such agreement was entered among them. The petitioner filed representation before the respondent no.5 requesting therein to execute tripartite agreement on 9th February, 2022. A meeting was held in the office of the respondent no.3, which was attended by the respondent no.2 and other authorities of the respondent-bank as well as the petitioner and the representative of the respondent no.6. In the said meeting, it was stated by the respondent no.2 that the petitioner should deposit an amount of Rs.58.24 lacs to regularize the loan account of the respondent no.6. It was also agreed that on payment of Rs.13.50 crores by the petitioner, entire industrial units of the respondent no.6 along with land standing in the name of the respondent no.7 would be transferred to the petitioner and for completing the said transaction, a tripartite agreement would be executed. The minutes of the said meeting was duly communicated to the petitioner by the respondent-bank vide its letter dated 18th February, 2022 in which agreement arrived at among the parties (petitioner, respondent-bank and respondent no.6) was duly recorded. It has also been mentioned in the said letter that any amount paid by the petitioner towards loan account of the respondent no.6 would be deducted from total consideration value of Rs.13.50 crores. On receipt of the aforesaid letter, the petitioner made payment of Rs.58.24 lacs in the loan account of the respondent no.6 and infor