Karnataka High Court
Sindhu Cargo Services Private Limited vs Union Bank Of India on 23 November, 2021
Author: Krishna S.Dixit
Bench: Krishna S.Dixit
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IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 23RD DAY OF NOVEMBER, 2021
BEFORE
THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT
WRIT PETITION NO.11060 OF 2021 (GM-RES)
BETWEEN:
SINDHU CARGO SERVICES PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT 1956,
HAVING ITS REGISTERED OFFICE AT BLOCK NO.3,
NO.34, NELLAKUNTE, NEAR MVIT COLLEGE,
BETTAHALASURU, HUNSE MARANHALLI,
BENGALURU NORTH TALUK,
BENGALURU - 562 157.
REPRESENTED BY ITS AUTHORISED SIGNATORY.
... PETITIONER
(BY SRI. ARVIND KAMATH, SENIOR COUNSEL FOR
SRI. PRASHANT POPAT, ADVOCATE)
AND:
UNION BANK OF INDIA,
COOKIE TOWN BRANCH
NO.9, 1ST CROSS, D'COSTA LAYOUT,
COOKE TOWN, BENGALURU - 560 084.
REPRESENTED BY ITS MANAGER.
... RESPONDENT
(BY SRI. VIGNESH SHETTY, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE
RESPONDENT TO CONSIDER AND APPLY THE ECLG SCHEME
(ANNEXURE-L) TO THE CASE OF THE PETITIONER AND ETC.,
THIS PETITION COMING ON FOR ORDERS THIS DAY, THE
COURT MADE THE FOLLOWING:-
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ORDER
Petitioner company being the borrower of the respondent-bank is knocking at the doors of writ court seeking a Writ of Mandamus for considering its request for restructuring of the loan package in the light of Emergency Credit Line Guarantee Scheme dated 26.11.2020 and the RBI Circular dated 06.08.2020, after quashing the classification of its loan account as NPA.
2. After service of notice, the respondent bank having entered appearance through its Panel Counsel vehemently opposes the writ petition contending that the request of the petitioner either for rescinding the NPA classification of its account or for restructuring of the loan package would not merit any favour in view of RBI guidelines. He also points out that the petitioner did not furnish the Audit Report for the year 2018-19 despite granting sufficient time and therefore the action of the bank cannot be faltered; so contending learned Panel Counsel seeks dismissal of writ petition.
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3. Having heard the learned counsel for the parties and having perused the petition papers, this Court is inclined to grant indulgence in the matter as under and for the following reasons:
(a) The debtor-creditor relationship between the petitioner and the respondent bank is not in dispute;
petitioner vide application dated 03.05.2019 had applied for Overdraft facility renewal; subsequently on 05.06.2019 the petitioner had submitted a proposal for the renewal of working capital; the respondent bank had already charged the petitioner Rs.21,24,000/- plus Rs.10,62,000/- as processing charges; it had also levied Rs.59,000/- towards documentation charges; thus in all petitioner had paid Rs.32,45,000/- to the bank.
(b) It cannot be much disputed that the case of petitioner merited favourable consideration under the operational guidelines of ECLG Scheme; this apart, petitioner was entitled to the extant RBI Guidelines dated 27.03.2020 & 23.05.2020 for the moratorium period of six months cumulatively; added to this, several orders of reprieve were made by the Apex Court in view of the difficulties generated 4 by COVID-19 pandemic; that being the position the bank is not justified in turning down petitioner's request for de- classification of NPA and for restructuring of the loan facilities, merely on the ground that the Audit Report for the year 2018-19 was not furnished to the bank despite grant of sufficient time.
(c) True it is, a debtor in order to claim certain benefits de hors the loan agreement, in terms of Reprieve Schemes of the kind has to furnish all records and information; in fact, petitioner in its renewal application dated 03.05.2019 had submitted as many as six documents; of course, he ought to have furnished the Audit Report as well; however, no RBI Rule or Circular is produced making the production of the same as a sine qua non for availing the benefit of the kind; there is some fault on the part of the petitioner company, cannot be disputed, is true; for this petitioner can be made to pay additional interest or some reasonable sum which the bank in its prudence would levy.
In the above circumstances, this writ petition succeeds; a Writ of Mandamus issues to the respondent bank to 5 consider petitioner's request for the benefit of ECLG Scheme and the RBI Circulars in question within a period of eight weeks, if petitioner submits all & whatever documents/information that may be required of it by the bank, without brooking delay.
It is open to the respondent bank to levy some reasonable interest/additional charges/penalty for the lapse attributable to the petitioner.
In the special circumstances of this case, petitioner shall pay a cost of Rs.1,00,000/- (Rupees one lakh) only to the respondent bank within two weeks.
Sd/-
JUDGE Snb/