Karnataka High Court
Sri. Venkateshwara Poultries vs The Deputy Commissioner on 30 September, 2024
Author: H.P.Sandesh
Bench: H.P.Sandesh
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NC: 2024:KHC-D:14662
WP No. 105490 of 2024
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 30TH DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE H.P.SANDESH
WRIT PETITION NO. 105490 OF 2024 (GM-RES)
BETWEEN:
1. SRI. VENKATESHWARA POULTRIES,
DANAGALADODDI VILLAGE,
KOPPAL TALUK & DISTRICT, PIN: 583226,
BY ITS MANAGING PARTNER,
KARAMATHULLAH ABDUL SATTAR.
2. SRI. LAKSHMI POULTRY COMPLEX PRIVATE LIMITED,
UPANAYAKANA HALLI VILLAGE,
MARABBIHALLU GRAM PANCHAYAT,
HAGARIBOMMANAHALLI TALUK,
VIJAYANAGAR DISTRICT, PIN: 583212,
BY ITS DIRECTOR G. SARADA.
3. PADMAJA FARMS,
BULLAPURA VILLAGE, HITNALA POST,
Digitally signed
KOPPAL TALUK AND DISTRICT,
by SAROJA
HANGARAKI PIN: 583234, BY ITS MANAGING PARTNER,
Location: HIGH
SAROJA COURT OF KARRI BHULOKA REDDY.
HANGARAKI KARNATAKA
DHARWAD
BENCH ...PETITIONERS
Date: 2024.10.07
13:28:48 +0530
(BY SRI. HARSH DESAI, ADVOCATE)
AND:
1. THE DEPUTY COMMISSIONER,
KOPPAL DISTRICT, KOPPAL-583231.
2. THE THASILDAR,
KOPPAL TALUK, KOPPAL-583231.
3. THE UNION BANK OF INDIA,
ASSET RECOVERY BRANCH,
NO.9-15-1/1, NEAR LAXMINARAYANA THEATRE,
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NC: 2024:KHC-D:14662
WP No. 105490 of 2024
TANUKU ROAD, TADEPALLIGUDEM-534102,
ANDHRA PRADESH, BY ITS CHIEF MANAGER.
4. THE UNION BANK OF INDIA,
MUDUGAL COMPLEX ASHOKA CIRCLE,
JAWAHAR ROAD, KOPPAL-583231,
BY ITS MANAGER.
...RESPONDENTS
(BY SRI. PRAVEEN K. UPPAR, AGA FOR R1 & R2;
SRI. GIRISH HULMANI, ADV. FOR R3 & R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI QUASHING THE NOTICE BEARING
NO.SUM/KUM/DCB/2024-25/E-209764 DATED 20-08-2024 ISSUED
BY RESPODNENT-2 AS PER ANNEXURE-B, IN SO FAR AS
PETITIONERS CONCERN; ISSUE A WRIT OF MANDAMUS DIRECTING
RESPONDENTS-3 AND 4 BANK TO CONSIDER THE PETITIONERS
REVISED ONE-TIME SETTLEMENT PROPOSAL FOR AN AMOUNT OF
RS.6,06,00,000-00 OR SUCH OTHER AMOUNT AS THIS HON'BLE
COURT MAY DEEM FIT AND PROPER IN THE INTEREST OF JUSTICE,
AND TO FORTHWITH ACCEPT THE UPFRONT PAYMENT OF
RS.61,00,000-00 IN ACCORDANCE WITH THE TERMS AGREED UPON
UNDER ITS LETTER DATED 29-08-2024 AS PER ANNEXURE-D AND
ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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NC: 2024:KHC-D:14662
WP No. 105490 of 2024
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE H.P.SANDESH)
1. Heard the learned counsel for the petitioners and the learned counsels for the respondents.
2. The present petition is filed praying to issue a writ of certiorari quashing the notice bearing No.SUM/KUM/DCB/2024-25/E-209764 dated 20.08.2024 issued by respondent No.2 as per Annexure-B, insofar as petitioners concerned and issue a writ of mandamus directing respondents No.3 and 4 Bank to consider the petitioners revised one-time settlement proposal for an amount of Rs.6,06,00,000/- or such other amount as this Hon'ble Court may deem fit and proper in the circumstances of the case and to forthwith accept the upfront payment of Rs.61,00,000/- in accordance with the terms agreed upon under its letter dated 29.08.2024 as per Annexure-D.
3. The case of the petitioners is that petitioner No.1 obtained agriculture loan from respondents to -4- NC: 2024:KHC-D:14662 WP No. 105490 of 2024 facilitate its poultry-framing activities providing security in the form of approximately 34 acres of valuable agricultural land and petitioner No.1 shas repaid a sum of Rs.8,96,00,000/- against the said loan and loan was availed in 2017. Due to mounting losses and substantial investments in infrastructure, petitioner No.1 was compelled to bring in petitioner No.2 to assist in repayment of the dues. The Andhra Bank consents to such arrangement. However, unforeseen outbreak of Covid-19 Pandemic leads to a complete halt in agricultural operations causing severe financial distress. As a result, petitioners No.1 and 2 rope in petitioner No.3 to sustain poultry-farming activities and address the financial losses. Petitioners in light of the Reserve Bank of India's guidelines on OTS schemes, proposes an OTS amount to Rs.5,00,00,000/- to resolve the outstanding dues. Petitioner No.1 increases the OTS offer to Rs.5,50,00,000/- at the suggestion of the respondent Bank. However, respondent Bank does not consider or act upon the revised offer given in 2024. The respondents -5- NC: 2024:KHC-D:14662 WP No. 105490 of 2024 initiated recovery proceedings against petitioner No.1 under the SARFAESI Act. However, petitioner No.1 is not served with any notice and becomes aware of the proceedings subsequently when one of its godowns was abruptly sealed on 20.08.2024. In a continued effort to resolve the outstanding dues, petitioner No.1 submits further revised OTS proposal of Rs.6,06,00,000/- which is supported by petitioners No.2 and 3 who step forward to assist in settling the debt on 28.08.2024. The respondent Bank agrees to consider the revised OTS proposal and directs petitioner No.1 to deposit an upfront amount of Rs.61,00,000/- (10% of the proposed OTS amount) with the Bank as a precondition to formal acceptance, creating a legitimate expectation of settlement on 29.08.2024. Petitioner No.1 approaches the respondent Bank to make the payment of the upfront amount, however respondent Bank refused to receive the same and this Court directed an interim order to deposit an amount of Rs.65,00,000/- and the same was also deposited.
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4. Counsel also brought to notice of this Court Annexure-A to C regarding proposal was given on 28.08.2024 and also the letter issued by the Bank as per Annexure-D. The counsel brought to notice of this Court that when the Annexure-D was issued could not make the payment, there was holidays and subsequently they refused to accept the amount and he is also very eager to settle the issue between the bank and hence a direction may be given to consider the representation.
5. Per contra, counsel appearing for the respondents also contends that the amount was not paid within a period and hence not accepted the same. However, the amount of Rs.65,00,000/- was deposited in terms of the order passed by this Court and time frame may be fixed and direction may be given to consider the same in accordance with law. The counsel also not disputes the earlier attempt made to recover the same. The counsel only contends that due to the possession was not there and hence unsuccessful.
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6. In reply to the argument, counsel for the petitioners would submit that even still they are ready to repay the amount in OTS scheme this Court may be given direction to consider the same.
7. Learned AGA submits that respondents No.3 and 4 to take decision in the matter and this is an issue between the petitioners and the respondents No.3 and 4 for recovery of public money.
8. Having heard the petitioners' counsel and also the counsels appearing for the respondents, no doubt in view of the judgment of the Apex Court, the Court cannot exercise the writ jurisdiction in a financial institution matters. However, taking into note of the petitioner had come forward to pay the amount and he is only insisting for OTS scheme and also he made the payment of Rs.65,00,000/- i.e. 10% of the proposed OTS amount as directed in terms of Annexure-D and though there was a delay and he made the payment in view of the direction given by this Court and when such being the material on -8- NC: 2024:KHC-D:14662 WP No. 105490 of 2024 record, it is appropriate to issue a writ of mandamus against respondents No.3 and 4 to consider the representation of OTS scheme as given by the petitioners within a period of one month from today and decision may be taken in accordance with law in keeping the recovery of the amount and also when the petitioner had come forward to make the payment instead of proceeding to recover the same, it is appropriate to consider the representation and get the amount in a time bound period and hence a direction is given to consider the same in accordance with law by issuing a writ of mandamus as sought in the petition.
9. This Court has fixed the time of one month to consider the same and during this period, respondents not to take any precipitative action against the petitioners. If OTS settlement scheme is not arrived within a period of one month, then the respondent Bank is given liberty to proceed in accordance with law.
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10. In view of the above, the petition stands disposed of.
11. The petitioners' counsel to furnish a copy of this order to respondents No.3 and 4 forthwith to take the decision.
Sd/-
(H.P.SANDESH) JUDGE SH CT-MCK List No.: 1 Sl No.: 36