Andhra HC (Pre-Telangana)
Krupa Alloys & Metals vs Chief Manager, State Bank Of India on 26 February, 2002
Equivalent citations: 2002(6)ALT299, [2003]115COMPCAS133(AP)
ORDER V.V.S. Rao, J.
1. The petitioner is a proprietary concern engaged in manufacture and supply of non-ferrous castings. The petitioner obtained amount by way of loan from the respondent-bank. As it was irregular in repayments, the bank filed a suit being O.S. No. 325 of 1995. The suit was decreed ex parte on 6-11-1996 and a preliminary decree was passed. The bank filed an application for final decree. At that stage, the petitioner appears to have filed LA. No. 1068 of 1998 seeking to set aside the ex parte decree. The matter is pending at that stage. In the meanwhile, the Reserve Bank of India (RBI) issued a Circular bearing No. BP.BC 11/21.01.040/99-00 dated 27-7-2000 communicating to the Chairmen and Managing Directors of Public Sector Banks certain guidelines for recovery of dues relating to non-performing assets of public sector banks. The petitioner, therefore, made a representation on 13-10-2000 proposing to accept one-time settlement under the RBI Circular. In his representation, he proposed the following :
As per the decree, the amount due is :
Rs.
(i) Suit claim 5,65,405.00
(ii)
(a) Interest on 5,65,405 at the rate of 16 per cent p.m. from 21-4-1995 to 6-11-1996.
+
(b) Interest on 5,65,405 at ihe rate of 6 per cent p.m. from 6-11-1996 to 6-11-2000 2,78,631.58
(iii) Costs of suit 17,073.00 8,61,109.58 We propose :
(i) Compromise amount in terms of RBI Circular No. BP.BC/11/21-01-040/99-00 Rs. 5,00,000
(ii) Payable as follows :
(a) 25 per cent down payment on receipt of in principle agreement letter Rs. 1,00,000
(b) I Instalment, i.e., 3 m. from (a) Rs. 1,00,000
(c) II Instalment, i.e., 3 m. from (&) Rs. 1,00,000
(d) III Instalment, i.e., 3 m. from (c) Rs. 1,00,000
(e) IV Instalment, i.e., 3 m. from (d) Rs, 1,00,000 As there is no response from the respondents, the petitioner filed the present writ petition seeking a direction to the first respondent-bank to consider the representation in accordance with the RBI Circular. After receiving notice, the respondents appeared through S.R. James, representing Shri K. Srinivasa Murthy. According to the learned counsel, in cases where decrees are obtained by the public sector banks, the scheme of one-time settlement has no application. He placed reliance on Part A(i) of the guidelines which reads as under :
"(A) Guidelines for recovery of NPAs up to Rs. 5.00 crore;
(i) Coverage :
(a) The revised guidelines will cover all NPAs in all sectors irrespective of the nature of business, which have become doubtful or loss as on 31-3-1997 with outstanding balance of Rs. 5.00 crore and below on the cut off date.
(b) The guidelines will also cover NPAs classified as sub-standard as on 31-3-1997, which have subsequently become doubtful or loss category.
(c) These guidelines will also cover cases pending before Courts/ DRTs/BIFR, subject to consent decree being obtained from the Courts/DRTs/BIFR.
(d) Cases of wilful default, fraud and malfeasance will not be covered.
(e) The revised guidelines will remain operative only up to 31-3-2001."
A reading of the above guidelines would show that the guidelines will only cover cases where the Court cases are pending and in case the banks obtained decrees, the same has no application. Though the petitioner herein filed an interlocutory application seeking to set aside the ex parte decree till the decree is set aside, it cannot be said that the suit is still pending. In that view of the matter, it must be held that RBI guidelines have no application to the petitioner's case.
2. In the result, the writ petition is dismissed.