Karnataka High Court
Bharat Reddy vs M/S State Bank Of Mysore on 12 April, 2018
Author: Krishna S Dixit
Bench: Krishna S.Dixit
1 WP Nos.103732-734/2016
C/w. WP No.104118/2015
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 12 t h DAY OF APRIL 2018
BEFORE
THE HON'BLE MR.JUSTICE KRISHNA S.DIXIT
WRIT PETITION Nos.103732-734 of 2016 [GM-DRT]
C/W.
WRIT PETITION No.104118 of 2015 [GM-DRT]
IN WP Nos.103732-734/2016:
BETWEEN:
1. BHARAT REDDY
S/O SURYANARAYAN REDDY
AGED ABOUT 27 YEARS
2. SHARATH REDDY
S/O SURYANARAYAN REDDY
AGED ABOUT 30 YEARS
BOTH RESIDING AT NO.2/12
NEHRU COLONY
2ND CROSS GANDHI NAGAR
BALLARI-583103
3. M/S TUNGABHADRA PULP & BOARD MILLS LTD.,
REPRESENTED BY ITS DIRECTOR
SUSHIL R. MORAKA
AGE:64 YEARS, OCC: BUSINESS
R/O GROUND FLOOR MORAKA HOUSE, 24 B,
DAHANUKAR MARG, MUMBAI-400026
... PETITIONERS
2 WP Nos.103732-734/2016
C/w. WP No.104118/2015
(By Sri. V M SHEELVANT ADV.)
AND:
1. M/S STATE BANK OF MYSORE
BY ITS DEPUTY GENERAL MANAGER
ZONAL OFFICE
SIR. SIDDAPPA KAMBLI ROAD
HUBBALLI-580025
2. STATE BANK OF MYSORE
BY ITS BRANCH MANAGER
HSAPETE BRANCH
HOSAPETE-583201
... RESPONDENTS
(By Sri. S K HEGDE ADV. FOR R1 & R2 )
THIS WP IS FILED UNDER ARTICLES 226 & 227 OF
CONSTITUTION OF INDIA PRAYING THIS HON'BLE COURT TO
SET ASIDE THE ORDER DATED 29.03.2016 IN DCP.NO.1420 IN
OA.NO.458/1995 PASSED BY THE RECOVERY OFFICER, DEBT
RECOVERY TRIBUNAL BENGALURU VIDE ANNEXURE-A AND
ALLOW THE APPLICATION DATED:24.03.2016 FILED BY THE
1st AND 2nd PETITIONER BEFORE THE RECOVERY OFFICER,
DRT AT VIDE ANNEXURE-E.
****
IN WP No.104118/2015:
BETWEEN:
1. TUNGABHADRA PULP AND BOARD MILLS LTD.,
REPRESENTED BY ITS DIRECTOR
SUSHIL R MORAKA
AGE:64 YEARS, OCC. BUSINESS
R/O GROUND FLOOR
MORAKA HOUSE, 24B,
DAHANUKAR MARG
3 WP Nos.103732-734/2016
C/w. WP No.104118/2015
MUMBAI 400026
2. BHARAT REDDY S/O. SURYANARAYAN REDDY
AGE 27 YEARS,
R/O. NO.2/12, NEHRU COLONY,
2ND CROSS, GANDHI NAGAR,
BALLARI
3. SHARATH REDDY S/O. SURYANARAYAN REDDY
AGE 30 YEARS,
R/O. NO.2/12, NEHRU COLONY,
2ND CROSS, GANDHI NAGAR,
BALLARI.
... PETITIONERS
(By Sri. V M SHEELVANT ADV.)
AND:
1. STATE OF BANK OF MYSORE
BY ITS DEPUTY GENERAL MANAGER
ZONAL OFFICE, SIR SIDDAPPA KAMBLI ROAD,
HUBBALLI-580025
2. STATE BANK OF MYSORE
HOSPETE BRANCH, HOSPETE.
... RESPONDENTS
(By Sri.S.K.HEGDE, ADV. FOR R2;
R1-SERVED)
THIS WP IS FILED UNDER ARTICLES 226 & 227 OF
CONSTITUTION OF INDIA PRAYING THIS HON'BLE COURT TO
DIRECT THE RESPONDENTS TO ACT IN ACCORDANCE WITH
THE ONE TIME SETTLEMENT AS PER ANNEXURE-A DATED
03.04.2001 AND IMPLEMENT THE SCHEME AS PER GUIDELINES
OF RBI DATED 03.09.2005 PRODUCED AT ANNEXURE-C.
THESE PETITIONS COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP, THIS DAY THE COURT MADE THE
FOLLOWING:-
4 WP Nos.103732-734/2016
C/w. WP No.104118/2015
ORDER
The petitioner being aggrieved by the in action on the part of the respondents in not settling the amount of the respondent as per their acceptance letter dated 03.04.2011 has preferred this Writ Petition.
2. Heard.
3. Learned Senior counsel for the petitioner Sri.Dhayn Chinnappa submits that the One Time Settlement ('OTS' for short) Scheme does not differentiate between the Non-decreetal borrowers (simpliciter) and the borrowers who have suffered the Court decrees. He further submits that regard being had to the object and scope of OTS Schemes, he has a fair right to have his claim considered for One Time Settlement and the corresponding obligation rests on the respondent Bank.
3A. Mr.D.F.Sannakki, learned AGM of the respondent Bank, who is present before the Court, 5 WP Nos.103732-734/2016 C/w. WP No.104118/2015 explained how ordinarily OTS Schemes operated in Banking Industry to the benefit of borrowers and to the system. He also mentioned about the constraints and the limitations of the Lending Banks as well.
4. I have heard the learned counsel for the Bank who vehemently opposed any indulgence on the ground that there is some fraud-like thing involved in the matter inasmuch as the principal borrower has sold the mortgaged property in violation of terms and conditions of Loan Agreement.
5. Learned Senior Advocate Mr.Dhyan Chinnappa submits that the sale of mortgaged property is ordinarily permissible even to the mortgager under the law of mortgages inasmuch as the sale which the mortgager makes is only equity of redemption and therefore the allegation of fraud may not be tenable. In any circumstance, he submits such allegation may not vicariously be attributed to the 6 WP Nos.103732-734/2016 C/w. WP No.104118/2015 innocent buyer of the property mortgaged in favour of the respondent Bank.
5A. Ordinarily, the security for the repayment of debts is not diluted when the mortgaged property is alienated since the alienee gets only the equity of redemption and nothing beyond it. However, this does not mean that an unscrupulous borrower can violate the terms of Loan Agreement and take advantage of his fault. Lending Bank in it's accumulated wisdom can have it's own terms of Loan Facilities which the borrower having agreed cannot turn around and seek to take undue advantage of their breach.
6. Sri.Sannakki, AGM, having participated in the deliberations in the Court, fairly agrees that an offer to consider the claim of the petitioners for one time settlement could be worthwhile if they show their bona fide by making some payment since the amount due under the decree of Debt Recovery Tribunal is huge and the amount deposited by the petitioner falls 7 WP Nos.103732-734/2016 C/w. WP No.104118/2015 too much short of such amount which again is public money.
7. Mr.Dhyan Chinnappa submits that already a sum of Rs.1,00,00,000/- (Rupees One Crore only) deposited by the buyer of the mortgaged property is lying with the Debt Recovery Tribunal and that itself is sufficient proof of bona fide and therefore, he may not again be saddled with the burden of depositing some more amount.
8. In view of the above, I make the following:-
ORDER
(i) The respondent Bank shall consider the claim of the petitioners herein for an amicable settlement within the parameters of the Scheme dated 03.09.2005 promulgated by the Reserve Bank of India, as per Annexure 'C' to the Writ Petition, only if the petitioners deposit a sum of Rs.50,00,000/- (Rupees Fifty Lakh) 8 WP Nos.103732-734/2016 C/w. WP No.104118/2015 only with the respondent Bank within two weeks from today;
(ii) The parties have agreed and
undertaken that deposit of
Rs.1,00,00,000/- (Rupees One Crore) only made by the petitioners with the Debt Recovery Tribunal, Bengaluru, pursuant to the interim order of this Court dated 26.04.2016 and the aforesaid sum of Rs.50,00,000/-
(Rupees Fifty Lakh) only shall be refunded without any interest to petitioner Nos.1 and 2 in Writ Petition Nos.103732-734 of 2016 if the intended amicable settlement mentioned above does not materialise;
(iii) The respondent Bank shall not initiate or continue any coercive measures against the petitioners herein till after the claim for amicable settlement under the OTS Scheme in question is rejected and also the amount in deposit is refunded to the concerned petitioners.
9 WP Nos.103732-734/2016C/w. WP No.104118/2015
(iv) Liberty is reserved to the petitioners to approach this Court or any other jurisdictional Court for prosecuting any fresh cause of action if and when accrues.
(v) All the Writ petitions are accordingly disposed of;
Sd/-
JUDGE RK/-