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25. PNB contended that the petitioners failed to fulfil the requisite conditions to avail the benefits of restructuring their loan accounts. Consequently, their restructuring proposals were rejected, and due to their default in repayment, PNB was justified in initiating action under the SARFAESI Act, 2002, including the issuance of a notice under Section 13(2) of the said Act.

Submissions:

26. Mr. Saha Roy, learned Senior Advocate, advanced arguments on behalf of the petitioners. A central pillar of his submissions was the alleged non-compliance by the respondent bank with various directives and circulars issued by the Reserve Bank of India (RBI). In particular, reliance was placed on the RBI circulars dated January 1, 2019; February 22, 2019; March 27, 2020; and May 22, 2020. Additionally, reference was made to internal circulars of UBI dated January 18, 2019; February 22, 2019; and December 7, 2019. It was specifically contended that, by virtue of the circular issued in February 2019, the General Manager of United Bank of India had directed all its branches to extend the benefits envisaged under the RBI circular dated January 1, 2019 to cold storage units as well. The petitioners alleged that the respondent bank had flagrantly violated these directions.

33. Mr. Saha Roy submitted that it remains unclear how, after the declaration of certain loan accounts as Non-Performing Assets (NPAs), those accounts could subsequently be considered for restructuring. According to him, this inconsistency indicates that the Bank never formally completed the process of classifying the petitioners' loan accounts as NPAs. He further contended that prior to such purported classification, the petitioners had been regularly paying their instalments and other dues. However, disputes began to arise regarding the extension of restructuring benefits to the petitioners in accordance with the RBI circulars as well as the internal circulars issued by United Bank of India (UBI).

35. Mr. Saha Roy asserted that the Bank in brazen violation of the RBI circulars and even its own circular and in violation of the applicable statutes declined to extend the benefits of restructuring although the petitioner met all essential criteria. He submitted that in light of these circumstances, the classification of the petitioners' loan accounts cannot be legally sustained. He prays for a directive to the Bank to grant the benefits of restructuring of petitioners' loan accounts in terms of the RBI circulars and also in terms of its own internal circulars.