ORDER :

Heard Ms. Cheruku Sindhura, learned counsel for the petitioner and Mr. M.V.K. Viswanadham, learned counsel appearing for respondent No.2 in both writ petitions.

2. Both the writ petitions are filed to declare the unilateral action of respondent No.2 in foreclosing the accounts of the petitioners by way of demand notice dated 21.08.2021 without taking into consideration of various representations given by them including reply dated 27.08.2021 as illegal, and for a consequential direction to respondent No.2 to extend/renew C.C. limit and review of term loan.

3. Mr. Bangaru Shyam is the proprietor of M/s. Jyothi Laundry, the petitioner in W.P. No.29257 of 2021 and also the proprietor of M/s. Garments Powder Laundry, the petitioner in W.P.No.29270 of 2021. Since the parties in both the writ petitions and lis involved therein are one and the same, both the writ petitions were heard together and are disposed by way of common order.

4. CASTE OF THE PETITIONER :

(i) The petitioner in both the writ petitions is a proprietary concern, engaged in laundry business, mainly in Government Railway Tenders, having registration Nos.36AAPFJ6512P1ZP and 36BTCPB6540C2Z8, dated 21.11.2019 and 15.11.2019, respectively.

(ii) It had approached respondent No.2 for term loans and an amount of Rs.30,00,000/- (Rupees Thirty Lakhs Only) was sanctioned as term loan to the respective petitioners. Apart from the same, an amount of Rs.10.00 lakhs towards Cash Credit Facility was also sanctioned vide Credit Sanction Advices dated 09.12.2019 and 06.01.2020 respectively.

(iii) Respondent No.2 bank had issued recall notice dated 21.08.2021 directing respective petitioners to pay an amount of Rs.44,46,412/- and Rs.45,01,777/- respectively, along with interest with false allegations of the respective petitioners not submitting the tax invoice, delivery challan, installation certificate of the machinery and that they are not operating their CC account regularly and not submitting the stock statement regularly etc. The petitioners herein had submitted reply dated 27.08.2021 with a request to extend time for one year to make the payments. The petitioner has also requested respondent No.2 to restructure the said loan amount in terms of the Circulars issued by the Reserve Bank of India (RBI) with regard to the loans availed by MSMS Units. Respondent No.2 did not consider the said request.

(iv) According to the petitioner, notice dated 21.08.2021 issued by respondent No.2 foreclosing the account of the petitioner unilaterally is arbitrary, illegal and in violation of principles of natural justice and also in violation of Circular dated 05.05.2021 issued by the RBI. There is no consideration of the representation dated 27.08.2021 by respondent No.2. There is no diversion of funds by the petitioner herein. Declaring the account of the petitioner as NPA on 30.06.2021 and 19.08.2021 respectively is also contrary to the guidelines issued by the RBI and also the benefits/schemes announced by the RBI in respect of MSME Units. The petitioner has explained the said facts in its reply dated 27.08.2021 and requested respondent No.2 to restructure the loan. Instead of considering the same, respondent No.2 had issued another recall notice dated 14.10.2021 demanding the petitioner to repay the loan amount. Thus, there is no consideration of reply dated 27.08.2021. Therefore, the present writ petition.

5. CONTENTIONS OF RESPONDENT No.2 :

(i) Respondent No.2 has filed counter contending that the petitioner was sanctioned term loan facility of Rs.30.00 lakhs vide sanction advise dated 09.12.2019 and 06.01.2020 for purchase of machinery etc.,; cash credit facility of Rs.10.00 lakhs was also sanctioned against hypothecation of stocks and receivables, under sanction advice dated 09.12.2019 and 06.01.2020 of the bank respectively on execution of necessary loan documents. As on 21.08.2021, the outstanding due in the accounts of the respective petitioners is Rs.44,46,412/- and Rs.45,01,777/- with