Gujarat High Court
Electrotherm (India) Limited vs Central Bank Of India on 24 January, 2022
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
C/SCA/18131/2021 ORDER DATED: 24/01/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 18131 of 2021
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ELECTROTHERM (INDIA) LIMITED
Versus
CENTRAL BANK OF INDIA
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Appearance:
MR NAVIN PAHWA, SENIOR ADVOCATE FOR THAKKAR AND PAHWA
ADVOCATES(1357) for the Petitioner(s) No. 1
MR AMAR N BHATT(160) for the Respondent(s) No. 2
MR BHARAT JANI(352) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 24/01/2022
ORAL ORDER
Heard learned Senior Advocate Mr.Navin Pahwa appearing for Thakkar and Pahwa Advocates for the petitioner, learned advocate Mr.Bharat Jani for the respondent No.1 and learned advocate Mr.Amar Bhatt for the respondent No.2 through video conference.
2. By this petition under Article 226 of the Constitution of India, petitioner has challenged the action of the respondent No.1 Bank in declaring the account of the petitioner as fraud account. The petitioner has also prayed for quashing and setting aside the Circular dated 1st July, 2016 issued by the respondent No.2 - Reserve Bank of India and further prayed to stay the implementation, operation and execution of the action of the respondent No.1 Bank in Page 1 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 declaring the account of the petitioner as fraud account, during the pendency of this petition.
3. The factual matrix of the matter are as under:
3.1 The petitioner is a public listed company registered under the provisions of of the Companies Act, 1956, engaged in the business of induction furnace, capital equipment, TMT bars, ductile iron pipes, transmission line towers, transformers, electric vehicles, etc. 3.2 The petitioner Company availed financial facility from the respondent No.1 Bank and according to the petitioner Company, it had perfect credit rating and accordingly, the loan was granted in favour of the petitioner Company on 25th August, 2010 as per the sanction letter issued by the respondent No.1 Bank, as under :
"1. Fresh Short Term Loan (Unsecured) of Rs.50.00 crore at ROI @ 8.75% (Base Rate + 0.75%) for six(6) months repayable by way of bullet payment at the end of six(6) months from the date of first disbursement to meet shortfall in working capital pending sanction of enhanced credit limit by the consortium.
2. Fresh Letter of Credit (DA / DP /- Inland / Import / Buyers Credit / SBLC) limit of Rs.100.00 crore outside consortium.
3. Fresh Packing Credit limit of Rs.330.00 crore (USD 70 million) to execute project order of USD 110.00 million / INR 517.00 crore (approx) for a period of 270 days."Page 2 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022
C/SCA/18131/2021 ORDER DATED: 24/01/2022 Facility Limits Intt/Comm Margin Packing Credit 330.00 9.25% for 270 10% limit (270 days) days backed by confirmed orders / LC.
Short Term Loan 50.00 Base Rate + 75 Nil
bps P.A. payable
monthly
TOTAL NFB LIMITS 380.00 - -
Non Fund Based 100.00 50% of Normal 15%
Letter of Credit / Charges
DA / DP - Inland /
Import / Buyers
Credit - Usance 90
days for Inland &
180 days for
Import
TOTAL NFB LIMITS 100.00 - -
TOTAL LIMITS 480.00 - -
3.3 Thus, admittedly the petitioner availed
term loan facility of Rs.380.00 Crore on fund basis limit and Rs.100.00 Crore on non-fund basis limit.
3.4 According to the petitioner, from the financial year 2010-11, after getting the sanctioned loan from the respondent No.1 Bank, the petitioner Company suffered huge financial loss because of short supply of iron-ore which was the key material for the production of steel.
3.5 The respondent No.1 Bank, thereafter, restructured the financial assistance given to the petitioner Company on 12th December, 2011 by Page 3 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 issuing sanction letter subject to compliance of the following terms and conditions mentioned therein :
"Deferment of payment from 29.10.2011 to March 2012, so that the company repay the existing STL of Rs.50.00 Crore (TLI), with Interest of Rs.4.90 Crore (FITLI) accrued / to be accrued by March 2012, by way of bullet payment. Interest rate BR + 3.50% i.e. 14.25%.
To convert the Present Outstanding EPC of Rs.247.50 Crore into Term Loan II and Interest of Rs.59.03 Crore (accrued and to be accrued) on EPC into into FITL II with 1 year of moratorium period and interest @ ROI BR + 3.50% i.e. 14.25% at present. TL II FITL II to be repaid in 36 equal monthly installments from 01.10.2012 to 30.09.2015 or by way of sale proceeds received against the sale of PC goods, RM, WIP and FG created out of PC.
To convert the devolved & to be devolved LC's aggregating Rs.25.68 Crore (net of margin) as Term Loan III and interest of Rs.3.95 Crore to be accrued as FITL III with a moratorium period of 1 year @ ROI BR + 3.60% i.e. 14.25% at present. TL III & FITL III to be repaid in 36 equal monthly installments from 01.10.2012 to 30.09.2015 or sale proceeds received against the sale of goods received under LC or utilized in normal operations.
To convert the devolved SBLC aggregating Rs.65.05 Crore (net of margin) as Term Loan IV and interest of Rs.4.68 Crore to be accrued as FITL IV with ROI BR + 3.50% i.e. 14.25% at present. TL IV & FITL IV to be repaid by March - 2012from the sale proceeds received against the sale of coal to M/s. Victory Rich Trading, Hong Kong, (on account of interest rate fluctuation amount increased from Rs.62.50 Crore to Rs.65.05 Crore).
To convert the outstanding debit balance in current account on account of Payment of ECGC Premium & Page 4 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 other exps. aggregating to Rs.1.37 Crore as Term Loan V and Interest accrued / accruing amounting to Rs.0.70 Crore to be converted into FITL V with 1 year of moratorium period (from 1/10/2011 to 30/09/2012) with Interest rate of BR + 3.50% i.e. 14.25% at present. Repayment of TL V and FITL V in equal monthly installments in the 3 years i.e. from 01.10.2012 to 30.09.2015 or sale proceeds received against the sale of machinery & equipments (as company propose to dispose of part of the machinery manufactures for Tanzania project in local market), RM, WIP and FG created out of EPC."
3.6 The Term-sheet as per the sanctioned letter dated 12th December, 2011 issued by the respondent No.1 reads as under :
TERM SHEET 1 Facility TL-I - Rs.50.00 Cr FITL-I Rs.4.90 Cr TL-II - Rs.247.50 Cr FITL-II Rs.59.03 Cr TL-III - Rs.25.68 Cr FITL-III Rs.3.95 Cr TL-IV - Rs.65.05 Cr FITL-IV Rs.4.68 Cr TL-V - Rs.1.37 Cr FITL-V Rs.0.70 Cr 2 Purpose The existing PC and LC/SBLC & interest accrued/accurable aggregating to Rs.468.73 Crore is to be converted into TL & FITL 3 Rate of @ Base Rate + 3.50% i.e. 14.25% p.a. at Interest present (Base Rate 10.75%) payable monthly.
4 Upfront 0.50% fees 5 Repayment 1. TL-I, TL-III along with FITL-I & Schedule FITL-III is to be repaid by March-2012 by way of bullet payment.
2. Other TLs and FITLs are to be repaid in 36 Monthly Installments starting from 01.10.2012 to 30.09.2015 after moratorium period of 12 months.
6. Security Primary Security Hypothecation of Goods, Stock, RM, WIP Page 5 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 and FG created out of EPC and goods purchased out of LC limits.
Collateral Security Subservient charge on the entire asset of the company.
7 Guarantee Personal guarantee of Promoter / Directors Shri Mukesh Bhandari, Shri Shailesh Bhandari and Shri Avinash Bhnadari 8 Insurance Insurance : All the assets charged / to be charged to the Bank to be kept fully insured at all times against all risks (FRSD, Burglary, comprehensive risks etc.) and original Insurance cover note / policy in the name of the Bank a/ c borrower firm / Company with Bank's Hypothecation clause to be lodged with the Bank 3.7 According to the petitioner, the petitioner Company also availed financial assistance from various other financial institutions for its business purpose. There are about 19 financial institutions from which the petitioner Company availed the loan facility and out of the 19 lenders, according to petitioner, the petitioner Company succeeded in restructuring its loan accounts for 17 lenders.
3.8 The respondent No.1 Bank, on failure on the part of the petitioner Company to repay the outstanding dues, lodged a criminal complaint with the Central Bureau of Investigation (for short "the CBI") on 4th August, 2014 as the account of the petitioner Company was declared as Non Performing Asset account (NPA) after 31st Page 6 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 March, 2012 having outstanding of Rs.436.74 Crore.
3.9 In the complaint filed by the respondent No.1 Bank the allegations levelled against the petitioner and its Directors are as under :
"Sh. Mukesh Bhandari is the Chairman of M/s. EIL and also a Director in M/s. Firefly Energy Ltd. Sh. Shailesh Bhandari, Managing Director of EIL is also a Director of M/s. Kamal Alloya Ltd., Tanzania as well as M/s. Firefly Energy Ltd. (erstwhile M/s. Alpha Nippon Innovation Ltd.). Sh. Shailesh Bhandari is a common Director in all the three entities namely M/s. EIL, M/s. Kamal Alloys Ltd. and M/s. Firefly Energy Ltd. coupled with the fact that EIL is having stacks in Kamal Alloys Ltd. (which subsequently converged into M/s. LSAL, the EPC agreements between the parties could have facilitated siphoning off funds internally).
EPC disbursements made to the credit of Company's current account were got remitted to credit of company's account with other banks as well as to builders, instead of direct payments to the suppliers. EPC Funds have also been used for interest servicing, preparation of FDR, payment of ECGC Premium, etc. in the process the Company has neither created adequate assets nor does it hold any distinctly identifiable stock acquired against EPC and has disposed off the assets without intimation to Bank and failed to deposit the sale proceeds in the account.
In view of the above observation on EPC and SBLC transactions it can be construed that the transaction is fraudulent one and therefore this complaint is filed for registering the FIR against the above borrowal Company and against the Managing Director, Directors and all other responsible persons."Page 7 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022
C/SCA/18131/2021 ORDER DATED: 24/01/2022 3.10 It is not in dispute that the petitioner Company was aware about the filing of the complaint by the respondent No.1 Bank with the CBI as the CBI has registered the FIR on 8th August, 2014 for the offences punishable under Section 120(B) read with Section 420 of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The charge-sheet was filed on completion of the investigation by the CBI in the Court of Special Judge for CBI Cases, Ahmedabad and the case was registered as CBI Special Case No.27 of 2015. Thereafter, the Ahmedabad Zonal Office of Enforcement Directorate had also registered a case on 27th January, 2015 and after investigation, apart from attachment of certain properties of the petitioner Company, a complaint under Section 45 of the Prevention of Money Laundering Act, 2002 was registered as PMLA Case No.20 of 2018 before the Court of Principal District and Sessions Judge, Ahmedabad (Rural).
3.11 According to the petitioner Company, neither written complaint nor the FIR or even the charge-sheet papers disclose that the prosecution is initiated on the basis of the account of the petitioner Company being declared as fraud by the respondent No.1 Bank.
3.12 The petitioner Company since 2015 has made proposals for settlement of the outstanding Page 8 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 dues with the respondent No.1 Bank by writing various letters as stated in paragraphs 3.9 to 3.13 of the memo of the petition. It is the case of the petitioner Company that the officers of the respondent No.1 Bank continued to have discussions with the petitioner Company for the settlement of the outstanding dues. The respondent No.1 Bank, meanwhile, also filed Original Application No.25 of 2014 before the Debt Recovery Tribunal for recovery of the outstanding dues of the petitioner Company under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
3.13 The Debt Recovery Tribunal has decreed the said suit for Rs.577,89,13,788/- and issued Recovery Certificate on 9th October, 2018.
3.14 The respondent No.1 Bank has also placed on record the Fraud Report filed by the respondent No.1 Bank with the Reserve Bank of India along with the affidavit-in-reply.
3.15 The respondent No.1 Bank has filed Company Petition (IB) No.213 of 2020 before the National Company Law Tribunal (for short "the NCLT") under the provisions of the Insolvency and Bankruptcy Code, 2016 against the petitioner Company as the petitioner Company failed to pay the outstanding dues as per the amount decreed by the DRT.
Page 9 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022C/SCA/18131/2021 ORDER DATED: 24/01/2022 3.16 The petitioner Company has filed this petition on 27th November, 2021 raising a grievance that the respondent No.1 Bank has committed breach of principles of natural justice because, for the first time, in the year 2019, by letter dated 4th January, 2019 in response to the letter dated 26th November, 2018, the respondent No.1 Bank informed the petitioner Company that the account of the petitioner has been declared as fraud in the year 2013. According to the petitioner, this was the first communication received by the petitioner Company from the respondent No.1 Bank about the classification of the account of the petitioner being "fraud".
3.17 The petitioner, therefore, approached the respondent No.1 Bank pursuant to the Circular dated 12th February, 2018 of the Reserve Bank of India to settle the accounts. However, the Circular dated 12th February 2018 was struck-down by the Apex Court vide judgment and order dated 2nd April, 2019 being ultra vires of Section 35AA of the Banking Regulations Act, 1949. The Reserve Bank of India thereafter, issued a Circular dated 7th June, 2019, which is called as "Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019".
3.18 According to the petitioner, the petitioner Company approached the respondent No.1 Page 10 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 Bank after the aforesaid Circular, which came into effect from 7th June, 2019 for settlement of its dues. The respondent No.1 Bank after conducting various meetings with the petitioner, informed the petitioner that the petitioner would have to deposit an amount of Rs.20 Crore as up- front payment for the purpose of settlement. The petitioner Company accordingly deposited Rs.10.75 Crore with the respondent No.1 Bank to show bonafides and by letter dated 12th March 2020, the petitioner offered to pay an amount of Rs.140 Crore within a period of three months and also agreed to deposit Rs.20 Crore by 25th March, 2020.
3.19 However, the respondent No.1 Bank did not agree to the proposal made by the petitioner Company and preferred Company Petition No.213 of 2020 before the NCLT.
3.20 According to the petitioner, the petitioner Company was never informed by the respondent No.1 Bank as to when the account of the petitioner company was classified as fraud and now the respondent No.1 Bank has refused to consider the settlement proposal of the petitioner Company on the ground of classification of the account of the petitioner as fraud account in view of the RBI Circular dated 7th June, 2019.
3.21 According to the petitioner Company, the Page 11 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 balance confirmation letter dated 2nd June, 2021 issued by the respondent No.1 Bank disclosed for the first time that the account of the petitioner Company has been declared as fraud account on 12th November, 2013 and the petitioner Company was never supplied with the decision or any documents declaring the account of the petitioner as fraud account.
3.22 The respondent no.1 Bank by letter dated 12th November, 2021 refused to accept the proposal of the petitioner even on 28th September, 2021 on the ground that the One Time Settlement (for short "OTS") offer needs to be improved and further that up-front payment was not deposited.
3.23 In view of the above facts, the petitioner Company has preferred this petition challenging the action of the respondent No.1 Bank to declare the account of the petitioner as fraud account.
4. Learned Senior Advocate Mr.Navin Pahwa appearing for the petitioner Company submitted that in view of the decision of the Telangana High Court in case of Rajesh Agarwal Vs. Reserve Bank of India in Writ Petition No.19102 of 2019, decided on 10th December, 2020, the principle of audi alteram partem, which is important part of principles of natural justice, ought to be read into clause 8.9.4 of the RBI Circular, under Page 12 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 which, the petitioner Company was declared as "fraud" and report has been made to the authorities by the respondent No.1 Bank. It was submitted that as held by the Telangana High Court, the petitioner Company ought to have been granted an opportunity to show cause after being acquainted with the materials used against it for declaration of the account as fraud account.
4.1 Learned Senior Advocate Mr.Pahwa further submitted that the Supreme Court while admitting the Special Leave Petition against the order passed by the Telangana High Court has not stayed the judgment of the Telangana High Court, so far as the principles of audi alteram partem is granted in the said judgment as only the order of providing personal hearing is stayed by the Apex Court.
4.2 It was therefore, submitted by learned Senior Advocate Mr.Pahwa that as the respondent No.1 Bank has never given an opportunity to the petitioner Company prior to declaration of the account of the petitioner as fraud account in the year 2013, the respondent No.1 Bank is required to be restrained from acting upon the decision of declaration of the account of the petitioner as fraud account and proposal for settlement of the account under the Circular dated 7th June, 2019, issued by the Reserve Bank of India should be considered by the respondent Bank.
Page 13 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022C/SCA/18131/2021 ORDER DATED: 24/01/2022 4.3 Reliance was also placed on various interim orders passed by this Court as well as the Bombay High Court and the Delhi High Court in support of his submissions, whereby, action of Banks to declare account as fraud account is kept in abeyance.
4.4 It was therefore, prayed by learned Senior Advocate Mr.Pahwa that if the impugned action of the respondent No.1 Bank to declare the account of the petitioner Company as fraud account is kept in abeyance, subject to outcome of the pending matter before the Apex Court, the petitioner Company is ready and willing to make offer for settlement of the outstanding dues of the respondent No.1 Bank because, the petitioner Company has already settled with the 17 lenders out of the 19 lenders, as on today.
4.5 It was therefore, prayed that one opportunity be given to the petitioner Company by showing indulgence to keep the action of the respondent no.1 Bank of declaration of the account of the petitioner Company as fraud account in abeyance by directing the respondent No.1 Bank not to act upon the same so as to consider the proposal of the petitioner Company for settlement.
4.6 Learned Senior Advocate Mr.Pahwa also Page 14 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 submitted that the petitioner Company is ready and willing to withdraw the application filed before the NCLT filed for deferment of the Company Petition No.213 of 2020. It was also submitted that the petitioner Company is still ready and willing to sit for negotiation with the respondent No.1 Bank for increasing the amount of offer for settlement.
5. On the other hand, learned advocate Mr.Bharat Jani appearing for the respondent No.1 Bank submitted that the petitioner Company has not paid the outstanding dues since 2012 except depositing Rs.10.75 Crore, which is kept in a no lien account by the respondent Bank. It was submitted that the respondent No.1 Bank has reported to the Reserve Bank of India about the fraud committed by the petitioner Company on 13th November, 2013 as the amount involved was Rs.385.26 Crore. It was pointed out that as the Bank has already filed a criminal complaint before the CBI and DRT has also decreed the OA No.25 of 2014 for recovery of Rs.577,89,13,788/- and issued Recovery Certificate on 9th October, 2018 and thereafter, the respondent No.1 Bank has preferred Company Petition No.213 of 2020 before the NCLT on the basis of the decree issued by the DRT, which is pending.
5.1 Learned advocate Mr.Jani further submitted that the petitioner Company has filed Page 15 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 Interlocutory Application No.849 of 2021 in Company Petition No.213 of 2020 and sought the deferment of further proceedings of the said Company Petition till final adjudication of this petition. It was pointed out from the copy of the IA No.849 of 2021, produced at Annexure-R2 with the affidavit-in-reply, that the petitioner Company offered settlement amount of Rs.175 Crore as against the outstanding dues of Rs.1059.59 Crore to be paid in 28 quarterly installments each of Rs.5.63 Crore starting from December, 2021 after making up-front payment of Rs.17.50 Crore and against such up-front payment, the petitioner Company requested to adjust the deposit of Rs.10.75 Crore kept in no lien account.
5.2 It was submitted by learned advocate Mr.Jani that the proposal given by the petitioner Company was not accepted by the respondent No.1 Bank and the same was communicated by letter dated 12th November, 2021 with an advice to the petitioner Company for improvement of settlement amount.
5.3 It was submitted by learned advocate Mr.Jani that with a view to defer the proceedings before the NCLT, the petitioner Company has filed this petition on the ground of not providing an opportunity of hearing before declaration of the account of the petitioner Company as fraud Page 16 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 account. It was submitted that the account of the petitioner Company was declared as fraud as per the Master Circular dated 1st July, 2013, issued by the Reserve Bank of India, which does not provide for opportunity of hearing to be given to the concerned defaulting borrower at the time of declaration of the account as "fraud".
5.4 Learned advocate Mr.Jani submitted that as the petitioner Company is not even ready and willing to deposit or give offer of settlement of the admitted amount as per the restructured loan facility advanced by the respondent No.1 Bank in the year 2011 amounting to Rs.462.86 Crore, the respondent No.1 Bank is not ready and willing to consider any proposal less than that amount.
6. The respondent No.2 - Reserve Bank of India has also filed affidavit-in-reply and relied upon the affidavit filed in Special Civil Application No.8550 of 2021 with respect to the Master Circular sought to be challenged in this proceedings. Learned advocate Mr.Amar Bhatt appearing for the respondent No.2 - RBI submitted that the affidavit-in-reply filed in Special Civil Application No.8550 of 2021 is adopted for the purpose of this petition also. From the affidavit-in-reply filed in Special Civil Application No.8550 of 2021, various contentions of the respondent No.2 narrated in detail were Page 17 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 pointed out. However, as the Special Civil Application No.8550 of 2021 is pending for adjudication, the same are not dealt with in this proceedings.
7. I have heard the learned advocates for the respective parties and considered the documents produced on record. In the facts of the case emerging from the records, it is not in dispute that the petitioner Company has availed loan facility advanced by the respondent No.1 Bank in the year 2010, which was restructured in the year 2011, and as on date of restructuring, there was total outstanding dues of Rs.462.86 Crore on 8th December, 2011 and outstanding on 31st March, 2012 was Rs.436.74 Crore as under :
Details of Facilities wise outstanding / Loss as under :-
Original Restructured Limit Facility-wise Facility Facility Outstanding as on 31.03.2012 Short Term Term Loan I 50.00 50.60 Loan II EPC Term Loan II 247.50 250.49 LC Term Loan III 25.68 23.60 Development SBLC Term Loan IV 65.05 65.84 Development TOD Term Loan V 1.37 1.38 FITL I (STL I) 4.90 4.22 FITL II (EPC) 59.03 35.08 FITL III (LC 3.95 1.92 Page 18 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 Development) FITL IV (SBLC 4.68 3.19 Development) FITL V (TOD) 0.70 0.38 Total 462.86 436.74 7.1 Thus, the petitioner Company is liable to pay Rs.436.74 Crore as on 31st March, 2012 to the respondent No.1 Bank. The DRT has also passed a decree in the year 2018 by issuing Recovery Certificate for Rs.577.89 Crore. According to the respondent No.1 Bank, total outstanding dues to be recovered from the petitioner Company is more than Rs.1059.59 Crore as referred to by the petitioner Company in the IA No.849 of 2021 filed by the petitioner Company for deferment of the proceedings during the pendency of this petition before the NCLT.
7.2 The issue before the Telangana High Court for providing opportunity of hearing to the borrower was considered in detail in the order passed in case of Rajesh Agarwal (Supra), upon which reliance is placed on behalf of the petitioner Company. However, the said judgment and order of the Telangana High Court is challenged before the Apex Court and the Apex Court has passed the following order :
"Applications seeking exemption from filing certified copy of the impugned order are allowed.
Issue notice.Page 19 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022
C/SCA/18131/2021 ORDER DATED: 24/01/2022 Dasti service, in addition, is permitted.
Learned counsel is permitted to file counter affidavit within a period of four weeks from today. Rejoinder affidavit within two weeks thereafter. Set down for hearing on Tuesday, the 13 th July, 2021 on top of the Board.
Meanwhile, the Minutes/Order dated 15.02.2019 passed by the Joint Lenders Meeting is not to be acted upon. The High Court insofar as it observed that a personal hearing be given is stayed."
7.3 The Apex Court has considered the facts of the case before it and therefore, in such circumstances, the issue of providing opportunity of hearing is at large before the Apex Court.
7.4 In the facts of the present case, the petitioner Company, under the guise of challenge of not providing opportunity of hearing to the petitioner Company before declaration of the account of the petitioner Company as "fraud", is trying to pressurize the respondent No.1 Bank to accept the offer of settlement of Rs.175 to 200 Crore as against the outstanding dues of the respondent No.1 Bank of more than Rs.1059.59 Crore.
7.5 It is not possible to believe as averred by the petitioner Company in the petition that the petitioner Company was not in knowledge that the account of the petitioner Company is declared as fraud in spite of the fact that the complaint was filed with the CBI by the respondent No.1 Page 20 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 Bank, wherein charge-sheet is also filed as well as the case under the Prevention of Money Laundering Act is also filed against the petitioner Company and therefore, the say of the petitioner Company that the petitioner Company was not aware about declaration of its account as fraud, cannot be accepted.
7.6 It appears that the petitioner Company so as to take the advantage of the judgment of the Telagana High Court has filed this petition so as to see that the respondent No.1 Bank is compelled to accept the the offer of settlement given by the petitioner Company. Even on perusal of the offer given by the petitioner Company,it appears that the petitioner Company is not ready and willing to pay even the principal outstanding dues at the time of restructuring of the proposal by the respondent No.1 Bank. The outstanding dues to be recovered from the petitioner Company by the respondent No.1 Bank as on 31st March, 2012 is about Rs.436.74 Crore, as against that, after ten years, the petitioner Company is ready and willing to pay only Rs.200 Crore, that too over a period of seven years. By no stretch of imagination, by any financial institution, by any commercial norms or even by applying any standard would accept such an offer from any defaulting borrower. The petitioner Company has not placed on record as to the value of the assets of the petitioner Company nor has stated anything on Page 21 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022 C/SCA/18131/2021 ORDER DATED: 24/01/2022 record to show that the petitioner Company has sufficient means to pay even the Rs.200 Crore. No details with regard to the compromise arrived at with the 17 other lenders are also placed on record, except giving the list of such lenders in the memo of the petition.
8. In such circumstances, I am not inclined to show any indulgence to the petitioner Company in the peculiar facts of the case taking into consideration the offer made by the petitioner Company to the respondent No.1 Bank for settlement of the account in the year 2022 for the amount less than the principal outstanding amount in the year 2011.
8.1 This petition is therefore, not entertained in view of the foregoing reasons and is accordingly dismissed with no order as to costs. Notice is discharged.
(BHARGAV D. KARIA, J) dolly Page 22 of 22 Downloaded on : Sun Apr 24 10:38:55 IST 2022