The petitioner, which is stated to be a firm engaged in manufacture

of TMT (Thermo Mechanically Treated), steel, has filed this writ petition

impugning Ext.P13 communication issued to them by the Reserve Bank of

India, where under, certain actions of the fourth respondent-South

Indian Bank assailed by the petitioner, have been approved.

2. It appears that on account of the default committed by the

petitioner, which they say is solely because of the effect of

demonetization, the fourth respondent-Bank has initiated certain action

under the provisions of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for

brevity). The petitioner initially challenged these proceedings before this

court and finally obtained Ext.P11 judgment, whereunder, eventhough

the proceedings initiated by the Bank under the SARFAESI Act was

refused to be interdicted, the learned Division Bench noticed that a

representation of the petitioner, shown as Ext.P6 therein, had not been

considered by the fourth respondent-Bank before the recovery

proceedings were initiated under the SARFAESI Act and consequently,

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the Bank was directed to consider the same and take a decision thereon.

The said representation related to the petitioner's request for additional

working capital facility in terms of the Reserve Bank of India circular, a

copy of which is on record as Ext.P7; but it appears that this

representation was subsequently disposed of by the fourth respondent-

Bank declining that request made by the petitioner.

3. It transpires that the Reserve Bank of India has simultaneously

issued Ext.P13 communication, wherein, they say that they cannot

interfere in these matters since credit decisions are to be taken by the

respective Banks based on their internal policy and commercial

judgments, in which the Reserve Bank of India does not interfere. The

petitioner says that this stand of the Reserve Bank of India is contrary to

the directions in Ext.P11 judgment and he therefore prays that the same

be set aside.

4.

I have heard Sri.K.C. Eldho, learned counsel for the petitioner;

Sri. Chandran Pillai, learned senior counsel assisted by Smt. Ambily;

learned counsel for the fourth respondent-Bank; Smt. Sumathy

Dandapani, learned senior counsel, assisted by Sri. Millu Dandapani,

standing counsel for the Reserve Bank of India and the learned senior

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Government Pleader appearing for the State of Kerala.

5. Sri. Chandran Pillai, learned senior counsel appearing for the

fourth respondent-Bank submits that the petitioner had only requested

for additional working capital, allegedly because they were affected by

the demonitization policy of the Government of India, but he says that

this was found to be only a facade by them to wriggle out of their existing

commitments and therefore, that the Bank took a considered and

prudential decision not to give any further facility to them. The learned

senior counsel submits that had the bank given them any further facility,

even that amount would have become an NPA, since the Unit of the

petitioner is still not functioning up to the requisite standards. He

further says that the Bank has already approached the Debts Recovery

Tribunal, Kerala (DRT for short) with an Original Application and

therefore, that the grant of any further facility at this point of time is

impossible.

6.

Sri. K.C. Eldho, the learned standing counsel appearing for the

petitioner, submits that the afore assertions made by the Bank is

completely untanable and he says that he is entitled to the benefit of the

relevant circular of the Reserve Bank of India, primarily because his

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clients' Unit had been impacted severly by the demonitization policy. He

asserts, therefore, that the impugned order of the Reserve Bank of India,

approving the fourth respondent Bank's stand of denying the petitioner's

legitimate request is completely unfortunate and contrary t