Union Bank Of India vs Denny M.D on 24 June, 2025

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Kerala High Court

Union Bank Of India vs Denny M.D on 24 June, 2025

The respondents in W.P.(C)No.10083 of 2025 are before this Court in this writ appeal, invoking the provisions under Section 5(i) of Kerala High Court Act, 1958, challenging the judgment dated 28.03.2025 of the learned Single Judge in W.P.(C)No.10083 of 2025, which was one filed by the respondent herein-petitioner, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the appellants herein to consider Ext.P3 request dated 19.02.2025 made by the petitioner for One Time Settlement (OTS), on remittance of a portion of the dues adjustable against the amount payable as per OTS and keeping in abeyance the entire coercive proceedings in relation to the secured asset, pending final decision of the proposal for OTS. The further relief sought for is a writ of mandamus commanding the appellants to permit the petitioner to clear the loan amount outstanding in 15 equal monthly instalments, after keeping on hold the entire coercive proceedings with respect to the recovery of the loan amount, through the sale of secured asset or such other coercive proceedings. W.A.No.705 of 2025 4

2025:KER:45975

2. In the writ petition, the respondents (appellants herein) have filed a counter affidavit dated 17.03.2025, producing therewith Ext.R1A reply. Paragraphs 3 to 6 of that counter affidavit read thus;

"3. It is submitted that the writ petition is not maintainable either in law or on facts and this counter affidavit is filed raising a preliminary objection on the ground of maintainability of the writ petition and the bank preserves the right to file a detailed counter affidavit if found necessary.

4. It is submitted that the petitioner had availed a CC Agri loan of Rs. 20 lakhs which was converted as 2 term loan of Rs. 26,35,176.35 (Term Loan 1) and Rs. 1,36,600/- (Term Loan 2) on 31.03.2021 for a period 60 Months. The petitioner defaulted repayments and the accounts were classified as NPA on 01.05.2024 and the respondent bank initiated recovery proceedings under SARFAESI Act pursuant to Ext.P2 pre-sale notice was issued. Upon receipt of Ext.P2, the petitioner submitted the Ext.P3 OTS proposal. The respondents considered Ext.P3 and issued a reply to dated 23.01.2025 to the petitioner. A true copy of reply letter dated 23.01.2025 issued by the bank to the petitioner is produced herewith and marked as Exhibit R1A.

5. It is submitted that petitioner had several business establishment and sufficient means to clear the entire loan liability. As on 28.02.2025 the total outstanding amount in both the loan accounts comes to Rs. 41,23,681/- (Rs. W.A.No.705 of 2025 5

2025:KER:45975 39,20,431/- (Term Loan 1) + Rs. 2,03,250/-). Further interest and costs are also due from the petitioner.

6. It is submitted that the remedy of the petitioner is to approach the appellate forum and no remedy can be given under the discretionary jurisdiction of this Hon'ble Court under the Article 226 of the Constitution of India."

3. The petitioner has filed a reply affidavit dated 27.03.2025 to the counter affidavit filed by the respondents.

4. By the impugned judgment dated 28.03.2025, the learned Single Judge disposed of W.P.(C)No.10083 of 2025. Paragraphs 3 to 5 and also the last paragraph of that judgment read thus;

"3. The learned counsel appearing for the petitioner submits that the petitioner has filed a fresh application for One time Settlement and the same may be directed to be considered after affording an opportunity of hearing to the petitioner also.

4. The learned counsel appearing for the respondent Bank stoutly opposes the grant of any relief to the petitioner. It is submitted that even the amount remitted by the petitioner as a condition for the interim order has been remitted in a 'no-lien account' and is not to the benefit of the respondent Bank. It is submitted that the application for One Time Settlement submitted by the petitioner was rejected for valid reasons and the petitioner has not brought out any material to suggest that the matter requires W.A.No.705 of 2025 6 2025:KER:45975 reconsideration by the Bank.

5. The learned counsel for the petitioner states that the amount of Rs.5,00,000/- now deposited in a 'no-lien account' may be adjusted against the loan liability and the fresh application for OTS may be considered. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent Bank and considering the limited nature of relief sought for by the petitioner, I am of the opinion that subject to the condition that the amount remitted by the petitioner as a condition for the interim order dated 17.03.2025 is adjusted against the loan liability, the competent authority of the respondent Bank can be directed to consider Ext.P8 application for One Time Settlement after affording an opportunity of hearing to the petitioner. Till such time as orders are passed on Ext.P8, further proceedings under the SARFAESI Act shall remain suspended. The petitioner shall appear before the 3rd respondent at 11.00 A.M on 04.04.2025 and thereafter Ext.P8 shall be considered by the 3rd respondent. The amount remitted by the petitioner pursuant to the interim order dated 17.03.2025 shall be adjusted forthwith against the loan liability."

5. Challenging the judgment of the learned Single Judge, the appellants-respondents are before this Court in this writ appeal, by contending that without proper pleadings in the writ petition, the learned Single Judge ought not to have granted a relief that was not even sought for. The judgment of the learned Single Judge goes W.A.No.705 of 2025 7 2025:KER:45975 against the principle laid down by the Apex Court in Bachhaj Nahar v. Nilima Mandal [(2008) 17 SCC 46]

6. On 09.04.2025, when this writ appeal came up for admission, the respondent-petitioner appeared in person and sought time to engage a counsel.

7. Heard the learned Standing Counsel for the appellants- respondents and the learned counsel for the respondent-petitioner.

8. During the course of arguments, the learned Standing Counsel for the appellants would submit that the Bank has already sanctioned OTS facility to the respondent-petitioner, vide letter No.UBI/2025-26/CRLD/58880 dated 17.05.2025. In such circumstances, this writ appeal may be closed, leaving open the legal and factual contentions raised by the appellants.

Based on the aforesaid submission made by the learned Standing Counsel for the appellants, this writ appeal is closed, leaving open the legal and factual contentions raised by the appellants.

Sd/-

ANIL K. NARENDRAN, JUDGE Sd/-

MURALEE KRISHNA S., JUDGE MSA W.A.No.705 of 2025 8 2025:KER:45975 APPENDIX OF WA 705/2025 PETITIONER ANNEXURES Annexure A1 A COPY OF THE REPLY DATED 24.3.2025 ISSUED BY THE BANK TO THE RESPONDENT

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Kerala High Court