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Judgment
The present writ petition has been filed seeking quashing of letter dated 16.03.2018 (Annexure P-8) vide which the respondent-bank refused to extend the period of One Time Settlement (for brevity 'OTS') proposal accepted vide letter dated 09.02.2018.
The petitioner is a private limited company. State Bank of Patiala, Stressed Assets Management Branch, Ludhiana and the two guarantors namely Rajdeep Jain and Sandip Jain have been arrayed as respondents No.1 to 3 respectively in the writ petition.
The petitioner in the year 2008, availed cash credit facility of Rs.21.06 crores from respondent No.1. There was a default in repayment and the account was declared as Non-Performing Asset (NPA) in the year 2014.
In order to secure the financial assistance, following properties were mortgaged with the respondent-bank:
Factory land & building at Village Ram Nagar, Jatwali as per four sale deeds Wasika No. 885, dated 27.05.1996, Wasika No. 969, dated 28.05.1996, Wasika No. 969 dated 29.05.1996, Wasike No.1020 dated 30.05.1996 standing in the name of Jhamb Enterprises Pvt. Ltd.
Factory land & building measuring 395 sq. yards plot No.172-AMC No.B-23-9273 industrial area-A, Ludhiana, as per sale deed wasika No.10540 dated 11.01.1996 standing in the names of (1) Sh. Adarsh Jhamb (2) Sh. Navtej Jhamb and (3) Sh. Vinay Bhushan Jhamb s/o Sh. Prem Sager Jhamb.
Agriculture/commercial land at Ponta Sahib measuring 2717 biswa i.e. 135 bigha 17 biswa as per nine sale deed wasika No.1250, 1251, 1252, 1253, 1165, 1166, 1254 dated 07.10.2004 wasika No. 1165, 1166, 1167, 1168 dated 17.09.2004 standing in the names of Sh. Sandeep Jain and Sh. Rajdeep Jain sons of Sh. Jawahar Lal Jain.
Agriculture Land measuring 3 kanals situated at vill. Ram Nagar alias Jatwal opp Jhamb Enterprises Pvt. Ltd. (Unit I) as per scale deed wasika No. 3617 dated 07.11.07 standing in the name of Sh. Jhamb Enterprises Pvt. Ltd.
i) Land measuring 2 kanals situated at village lalal wali, Teh-Fazilka standing in the name of M/s Jhamb Enterprises Pvt. Ltd. Vide wasika No. 1908 dated 07.08.09.
ii) Land measuring 14K-14M situated at village lalan Wali, Teh-Fazilka standing in the name of (1) Adarsh Jhamb, (2) Navterj Jhamb and (3) Vinay Jhamb son of Sh. Prem Sager Jhamb, as per sale deed Wasika No.1190 dt. 11.06.09.
iii) Land measuring 4 kanals situated at vill. Lalanwali, Teh-Fazilka standing in the name of Jhamb Enterprises Pvt. Ltd. vide Wasika No. 1266, dt. 17.06.09. 6. Plot No. G-172, South City Ludhiana meauring 650 sq. yards standing in the name (1) Adarsh Jhamb, (2) Navterj Jhamb and (3) Vinay Jhamb son of Sh. Prem Sager Jhamb, as per Wasika No.30842 dt. 24.03.2006.
Residential House no. at street No.2 Shakti Nagar, Fazilka Measuring 16 m i.e. 4300 sq. ft. standing in the name of Sh. Adarsh Jhamb son of Sh. Prem Sagar Jhamb as per gift deed wasika No. 3792, dt. 19.10.2001.
Agriculture land situated at V. Korianwali, Teh-Fazilka Dhani Kartar Singh, Malout Road measuring 813 M i.e. 3K 4M and 37K 9 M standing in the name of Jhamb Enterprises(P) Ltd. Fazilka (Unit 1) sale deed wasika No. 3494, 3495 both dated 31.10.2017.
Agriculture Land situated at V. Korianwali, Teh-Fazilka Dhani Kartar Singh, Malout Road measuring 1274 M i.e. 63K 14M standing in the name of Jhamb Enterprises (P) Ltd. Fazilka (Unit 1) bearing sale deed wasika No. 527 dated 07.05.2007.
Resident Plot at Shakti Nagar, Fazilka measuring 300 sq. ft. standing in the name of Sh. Adarsh Jhamb as per gift deed no. wasika 3442, dated 14.11.2005.
The respondent-bank issued a notice dated 25.08.2014 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity 'the Act'). As per notice, there was an outstanding liability of Rs.18,26,72,141/- and accrued interest till 30.06.2014. Thereafter, the respondent-bank issued notice dated 09.12.2014 under Section 13(4) of the Act.
On 05.01.2018, petitioner gave a One Time Settlement (OTS) proposal of Rs.11.63 crores. The OTS was accepted by the respondent-bank on 09.02.2018 subject to following conditions:-
Terms of compromise offer:-
i) An upfront amount of Rs. 0.81 Cr. being the 6.99% of the OTS amount has already been deposited with us which will be adjusted towards the compromise amount on sanction of OTS proposal by the Bank.
ii) The company will make further payment of Rs.0.20 Cr within 5 days from the receipt of this letter.
iii) Remaining amount within 90 days from the receipt of this letter.
iv) You will submit two PDCs for the remaining amount of the compromise.
v) The mortgaged properties will be released subject to deposit of realizable value of each property with condition that residential house at street No.2 Shakti Nagar, Fazilka will be released at last in whole process after payment of full OTS amount along with interest if any.
Other Terms & Conditions:-
i) The OTS amount shall be raised by the borrowers by sale of properties and loans from their friends & relatives.
ii) If the entire compromise amount is not paid within 3 months, the settlement amount shall increase to Rs. 12.25 cr. and interest at minimum Base rate for the balance amount paid after three months shall be charged from the 15th day from date of letter conveying approval of the OTS to the borrower on the increased amount of OTS i.e. Rs.12.25 cr.
iii) Application for consent decree will be filed in DRT-1, Chandigarh within two weeks of the approval as per agreed terms and conditions of the OTS.
iv) Statutory dues, if any to be paid by the Company and not ~ be part of the OTS amount.
v) All the directions of the company will submit notarised affidavit that they do not have unmortgaged assets in their name.
The petitioner on 17.02.2018, deposited Rs.23 lakhs as per the condition in OTS but could not honour the other conditions. The petitioners continued to have correspondence with the respondent-bank. In the meantime on 14.03.2018, the respondent-bank applied to the District Magistrate under Section 14 of the Act. The respondent-bank filed a Recovery Suit bearing OA No. 2051 of 2017.
The petitioner vide letter dated 04.07.2018, requested the respondent-bank that due to dispute regarding consent of guarantors, there was delay in complying with terms & conditions of OTS and hence the same be extended with certain modifications to its conditions. Hence, the present writ petition.
Notice of motion was issued on 05.04.2018 and status quo regarding physical possession of the secured asset was ordered to be maintained subject to the petitioner's depositing Rs.1 crore by 25.04.2018.
The petitioner deposited Rs.1 crore. The respondent-bank was directed to encash the demand draft of Rs.1 crore without prejudice to its rights in the writ petition.
Heard learned counsel for the parties.
Learned counsel for the petitioner stated that its proposal dated 04.07.2018 is pending with the respondent-bank for extension of time for settlement of account under OTS dated 09.02.2018.
Learned counsel for the respondent-bank submitted that the bank has come up with a new OTS policy and the respondent-bank has sent a proposal dated 13.08.2018 to the petitioner.
Without expressing any opinion on the merits of the case, the writ petition is disposed of with following directions:-
(1) The petitioner would pursue its proposal dated 4. 07.2018 and within 15 days from today, the petitioner shall file its response to the proposal dated 13.08.2018 of the bank.
(2) After receiving the response, bank shall decide the proposal within 15 days of receipt of proposal, after affording an opportunity of hearing to the petitioner.
(3) The interim order passed by this Court with regard to status quo in respect of physical possession of the secured asset shall be maintained till the decision by the respondent-bank.
(4) It is clarified that in case the proposal of the petitioner is rejected by the respondent-bank, the petitioner would be at liberty to avail its legal remedies and the respondent-bank would be at liberty to proceed in accordance with law.