The central legal point established in the judgment is that the conditions outlined in the Master Circular must be met for the upgradation of NPA loan accounts, and failure to fulfill these conditions renders the borrower ineligible for relief.

JUDGMENT

Karamjit Singh, J. - CM-11846-2020

This application has been moved by respondent No.2-ICICI Bank seeking vacation of the stay order dated 1.10.2019 to the extent whereby the Co-ordinate Bench had directed it not to take any coercive steps in respect of the mortgaged property of the petitioner.

2. With the consent of learned counsel for the parties, the main writ petition was also been taken up and heard along with this CM.

CWP-28494-2019

3. The petitioner has filed this writ petition with the prayer that necessary direction be issued to respondent No.2 -ICICI Bank to upgrade the loan account of the petitioner to a standard loan account in terms of Clause 4.2.5 of the Master Circular-Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances (hereinafter be called as 'Master Circular'), issued by respondent No.1-Reserve Bank of India (hereinafter be called as 'RBI') in exercise of its power under Section 21 & 35-A of the Banking Regulation Act, 1949, on the basis of judgment delivered by the Co-ordinate Bench of this Court in CWP-13888-2015 titled as M/s Oswal Spinning & Weaving Mills Ltd. Vs. Reserve Bank of India & Ors., decided on 11.4.2016 with further prayer to quash the impugned notices dated 30.11.2016 (Annexure P-5) and 8.5.2017 (Annexure P-8) along with order dated 19.6.2019 (Annexure P-11) and to restrain the respondent No.2-ICICI Bank from initiating any coercive action against the secured assets of the petitioner.

4. Briefly, the case of the petitioner is that he took loan of Rs. 51,77,726/- from respondent No.2 on 18.4.2014, against his property. The petitioner faced financial problems and as such was unable to repay the loan as per the schedule. The loan account of the petitioner was declared as Non-Performing Asset (NPA) on 30.9.2016. Then respondent No.2 issued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter be called as 'the Act of 2002'), Annexure P-5. Subsequently, respondent No.2 issued another notice under Section 13(4) of the Act of 2002 on 8.5.2017 (Annexure P-8). The petitioner failed to repay the loan amount due to pending litigation with the third party which owed Rs. 35 lacs to the petitioner. On 17.7.2019, the petitioner gave detailed representation to respondent No.2 (Annexure P-9) with request to upgrade his loan account by accepting payment of installments, which were overdue. The said amount comes out to be Rs. 20 lakhs. However, respondent No.2 ignored the said representation and filed an application under Section 14 of the Act of 2002, for taking over the possession of the secured assets of the petitioner and District Magistrate, Rohtak passed order dated 19.6.2019 (Annexure P-11) in that regard. Hence this petition was filed.

5. Notice of motion was issued for 5.11.2019, pursuant to which the respondent No.2 put in his appearance through its counsel. In the mean time, respondent No.2 was directed not to take any coercive steps in respect of the mortgaged property.

6. The respondent No.2 filed an application having CM-11846- 2020 seeking vacation of the aforesaid stay order. In the said application, respondent No.2 has pleaded that the actual outstanding amount due towards the petitioner was Rs. 30,04,380/- as on 30.11.2016. Amount of Rs. 66,71,806/- was outstanding against the petitioner as on 30.10.2020. The petitioner has failed to pay the said outstanding amount.

7. We have heard the counsel for the parties, in the main writ petition.

8. The counsel for the petitioner relied upon the judgment rendered by the Division Bench of this Court in M/s Oswal Spinning & Weaving Mills Limited's case (supra) and submitted that loan account classified as NPA could be upgraded. It was further contended that it is not true that if once an account is classified as NPA, it always remains as NPA.

9. The counsel for the petitioner referred to relevant clause of the Mast