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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
M.S. Ramachandra Rao, J.S. Bedi, JJ.
Aseem Gaind – Appellant
Versus
Axis Bank, Retail Assets Centre – Respondent
CWP No. 32015 of 2019 (O&M)
Decided On : 19-01-2022
OTS - Extension of Time for Repayment - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - [Section 17 of the Act of 2002] - The court dismissed the Writ Petition seeking extension of time for repayment of the balance One Time Settlement (OTS) amount of Rs. 1.79 Crores, as the petitioner failed to make substantial payments within the stipulated period and did not meet the guidelines for extension of time as per the OTS Policy.
Fact of the Case:
The petitioner sought extension of time for repayment of the balance OTS amount of Rs. 1.79 Crores, claiming unavoidable circumstances and illness of co-applicant. The respondent-Bank rejected the request, citing non-compliance with the OTS terms and availability of alternative remedy under Section 17 of the Act of 2002.
Finding of the Court:
The court found that the petitioner failed to make substantial payments within the stipulated period and did not meet the guidelines for extension of time as per the OTS Policy. The court dismissed the Writ Petition, stating that the respondent-Bank's refusal to extend the OTS was not arbitrary or unreasonable.
Issues: The main issue was whether the court had the power to grant extension of time for completion of the OTS payment as per the sanctioned letter, and whether the petitioner's circumstances warranted such extension.
Ratio Decidendi: The court held that the petitioner's slow pace of payment and reasons for delay did not justify extension of time as per the OTS Policy guidelines. It emphasized that the OTS scheme cannot be extended as a matter of right and must be exercised with discretion, considering the borrower's bonafide intent and substantial payments made.
Final Decision: The Writ Petition seeking extension of time for repayment of the balance OTS amount was dismissed by the court, with no costs imposed on the petitioner.
JUDGMENT :
M.S. Ramachandra Rao, J.
1. This Writ Petition is filed by the petitioner for issuance of a Writ in the nature of Certiorari for quashing of the letter dated 12.07.2019 (Annexure P-1) issued by respondent-Bank whereby prayer of the petitioner vide its letter dated 09.06.2019(Annexure P-6)for extension of time by another six months for repayment of balance amount of Rs. 1.76 Crores, out of total One Time Settlement (hereinafter referred to as “OTS”) of Rs. 2.36 Crores vide letter dated 30.03.2018 (Annexure P-5),was rejected .
2. The background facts The petitioner and his co-applicant had been sanctioned a home loan of Rs. 2,32,00,000/- on 18.02.2014 by the respondent-Bank which was to be repaid in 240 monthly installments on a floating rate of interest @ 0.25% above the base rate. Later, a home loan (against property) was also sanctioned for Rs. 1.74 Crores on 21.02.2014 to be repaid in 180 monthly installments on a floating rate of interest @ 1.75% above the base rate.
3. The petitioner contends that he and his co-applicant were doing business of the Furniture and Furnishing in Chandigarh, and on account of several unavoidable and unforeseen circumstances, they were forced to close their entire business in the year 2013.It is also stated that father of the petitioner, who is also a co-applicant for the loans, was not keeping good health, that his health condition deteriorated in the year 2015, and the petitioner was unable to revive and restart the business. According to the petitioner, he kept on paying installments towards the two loan accounts in spite of the above circumstances.
4. The first OTS dt.27.7.2017 On 27.07.2017, the respondent-Bank offered to settle both the loan accounts for Rs. 3.10 Crores as against an outstanding of Rs. 3,94,29,233/- if the amount is paid in two months, but the petitioner could not do so since the period offered was too less.
5. The Second OTS dt.31.3.2018 Again the respondent-Bank on 31.03.2018, offered to settle both the loan accounts for Rs. 2.63 Crores provided the amount was paid by 30.09.2018 (in six months).
6. The petitioner deposited only
(ii) during the period 09.07.2018 to 30.09.2018, he could deposit only Rs. 12.56 Lakhs; and
(iii) during the period 01.10.2018 to 09.06.2019, he could only deposit Rs. 41.87 Lakhs.
7. Petitioner’s request dt.9.6.2019 for extension of time Petitioner then made a request on 09.06.2019 to the respondent-Bank to grant extension of further period of six months for making the repayment of the balance OTS amount of Rs. 183.45 Lakhs and offered to pay Rs. 25 Lakhs as lump-sum. Thereafter, the petitioner deposited Rs. 4.18 lakhs on 09.07.2019 and Rs. 12,55,974/- in August, September and October 2019.
8. According to the petitioner, out of total amount of OTS of Rs. 2.63 Crores he, thus, deposited Rs. 96.29 Lakhs till 31.10.2019.
9. The rejection of the petitioner’s request on 12.7.2019 by the Bank The request of the petitioner for extension of the period for payment of the balance OTS amount was rejected by the respondent-Bank vide letter dated 12.07.2019(Annexure P-1).
10. It stated that the said settlement was not permissible within the Policies of the respondent-Bank. It requested to come up with an appropriate OTS proposal and arrange for closure of the loan accounts.
11. The later events Petitioner requested the respondent-Bank to supply the relevant copies of its OTS Policies on 14.07.2019, and also got issued the legal notice dt.23.09.2019, and asked the respondent-Bank to withdraw letter dated 12.07.2019 issued by it.
12. The petitioner contends that the action of the respondent-Bank in refusing to extend the period of OTS for the remaining amount of Rs. 1.79 Crores is unreasonable, harsh, and contrary to law and decisions of this Court and in particular the decision in Anu Bhalla and AnotherVs.District Magistrate, Pathankot and Another, passed in CWP No. 5518 of 2020 decided by the Division Bench of this Court on 22.
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