Kerala High Court
Abdul Nazar A.P vs Union Bank Of India on 1 October, 2013
Author: P.R.Ramachandra Menon
Bench: P.R.Ramachandra Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
WEDNESDAY, THE 19TH DAY OF MARCH 2014/28TH PHALGUNA, 1935
WP(C).No. 5655 of 2014 (F)
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PETITIONER(S):
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1. ABDUL NAZAR A.P., AGED 39 YEARS,
S/O.MOIDEEN HAJI, ANAPPARAKKAL HOUSE,
UNNIKULAM P.O, KANTHAPURAM, KOZHIKODE - 673 574.
2. SINU P.M, . AGED 36 YEARS,
W/O.ABDUL NAZAR A.P, ANAPPARAKKAL HOUSE,
UNNIKULAM P.O., KANTHAPURAM, KOZHIKODE -673 574.
BY ADVS.SRI.SANTHARAM.P
SMT.REKHA ARAVIND
RESPONDENT(S):
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UNION BANK OF INDIA,
NODAL REGIONAL OFFICE, M.G.ROAD,
ERNAKULAM 682 035, REPRESENTED BY ITS MANAGER (LAW).
BY ADV. SRI.A.S.P.KURUP,SC, UBI
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 19-03-2014, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
PJ
WP(C).No. 5655 of 2014 (F)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXT.P-1: A TRUE COPY OF THE NOTICE U/S. 13(2) OF THE ACT, DATED 1.10.2013
ISSUED IN THE HOUSING LOAN ACCOUNT FOR PERUSAL
EXT.P-2: A TRUE COPY OF THE SALE NOTICE DATED 26.12.2013
EXT.P-3: TRUE COPY OF THE STATEMENT OF ACCOUNT FOR ANAPPARA WOOD
INDUSTRIES A/C NO.605405070000103 (CASH CREDIT) DURING THE
PERIOD 1.1.2012 TO 20.1.2014
EXT.P-3(A): TRUE COPY OF THE STATEMENT OF ACCOUNT FOR ANAPPARA
METAL INDUSTRIES A/C NO.605405070000104 (CASH CREDIT)
DURING THE PERIOD 1.1.2012 TO 20.1.2014
EXT.P-3(B): TRUE COPY OF THE STATEMENT OF ACCOUNT FOR ANAPPARA
CEMENT BRICKS & INTERLOCKS A/C.NO.605405070000105 (CASH
CREDIT) DURING THE PERIOD 1.1.2012 TO 20.1.2014.
EXT.P-3(C): TRUE COPY OF THE STATEMENT OF ACCOUNT FOR ANAPPARA
CEMENT BRICKS & INTERLOCKS A/C.NO.605406740000001 (TERM
LOAN) DURING THE PERIOD 1.1.2012 TO 20.1.2014
EXT.P-3(D): TRUE COPY OF THE STATEMENT OF ACCOUNT FOR HOUSING LOAN
A/C NO.605406650001523 DURING THE PERIOD 1.1.2012 TO 20.1.2014
EXT.P-4: TRUE COPY OF THE NOTICE OF INSPECTION ISSUED BY THE
ADVOCATE COMMISSIONER.
EXT.P5: TRUE COPY OF NOTICE DATED 10/3/14.
RESPONDENT(S)' EXHIBITS
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NIL.
/ TRUE COPY /
P.S. TO JUDGE
PJ
P.R. RAMACHANDRA MENON, J.
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W.P.C. No.5655 OF 2014
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Dated this the 19th day of March, 2014.
JUDGMENT
The petitioners have approached this Court with the following prayers:
"(1) Call for the records leading to the issuance of Ext.P2 and Ext.P4, and issue a writ of certiorari and quash the same.
(2) Direct the respondents to regularize the loan account and permit the petitioner to remit the outstanding arrears in instalments.
(3) Pass such other and further reliefs as may be prayed for hereafter and deemed fit and proper in the interest of justice."
2. The learned counsel for the petitioners submits that the default was never wilful, but because of some compelling circumstances and adverse market conditions. The petitioners' request to have the loan account regularized has only fell in the deaf ears of the Bank and hence the writ petition.
2. The respondent had filed a statement, paragraph 3 to 5 are relevant, which are extracted below:
"3. The respondent Bank had made several efforts for regularisation of the account of the borrowers for which Bank had written several letters. But the petitioners have not given the audited balance sheet for the month of March, 2013 and also the copies of VAT returns. During inspection of the unit, Bank found that there is inadequate stocks and balance of W.P.C.No.5655 of 2014 2 purchase and sales bills. The borrower has failed to produce the monthly VAT returns, which suggests that either there is no sale or sales are conducted without proper compliance of sales tax rules of the Government. The financial statements of accounts, as per audited balance sheet of March, 2012, shows that the unit is not running properly. There is a huge decline in the profits of the firm and the tangible net worth has come down. In addition to that huge capital erosion has been seen.
4. After classifying the accounts as NPA, Bank issued notice under SARFAESI A on 01.10.2013 and gave 65 days time to adjust the irregularities of the account. The borrower failed to route his sale transactions through the working capital accounts and it shows that either there is diversion of funds or the borrower is not complying with the regulations of proper business.
5. The borrower has claimed to conduct business on cash basis which cannot be verified and being a Nationalised Bank they cannot be a party to the unjust request of the petitioners in that regard. Production of VAT returns is a statutory requirement and in spite of the request made by the Bank, the borrowers are not giving the necessary papers for renewal of the facilities. The respondent Bank has the duty and responsibility to comply with all the rules of the Reserve Bank of India in the matter of providing facilities to the petitioners and also to protect the public interest and assistance cannot be given to the borrower who do not comply with the rules of the government and the Reserve Bank of India and for that no valid reasons are submitted by the borrower despite the persistent request made by the Bank."
3. The learned counsel for the respondent Bank submits that, there is absolutely no transaction and that the unit stands closed down. The outstanding liability is nearly Rs.1.46 Crores.
The request of the petitioner to regularize the loan account is not liable to be entertained in view of the actual facts and figures.
4. When the matter came up before this Court on W.P.C.No.5655 of 2014 3 11.03.2014, the petitioner was required to produce proof/ relevant material to show the transactions, if any, especially with reference to the returns filed before the Assessing Authority under the KVAT Act. But for producing Ext.P6 return for the period from 01.01.2014 to 31.01.2014, as Ext.P8 along with I.A. No.4279 of 2014, no other material has been produced before this Court to ascertain the nature of operation and the extent of transactions.
5. In the said circumstances, this Court does not find it as a fit case to call for interference invoking the discretionary jurisdiction under Article 226 of the Constitution of India.
Interference is declined and the writ petition is dismissed, without prejudice to the rights and liberties of the petitioner to pursue the statutory remedy.
P.R. RAMACHANDRA MENON, JUDGE sp