IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH * * * * WRIT PETITION No.26575 OF 2013 Between:
M/s. Akbar & Babar Mineral Water Plant .. Petitioner and State Bank of India and another .. Respondents DATE OF JUDGMENT PRONOUNCED: August 04, 2015 SUBMITTED FOR APPROVAL:
THE HON’BLE SRI JUSTICE R. SUBHASH REDDY AND THE HON’BLE SRI JUSTICE A. SHANKAR NARAYANA
1. Whether Reporters of Local newspapers Yes/No may be allowed to see the Judgments?
2. Whether the copies of judgment may be Yes/No marked to Law Reporters/Journals?
3. Whether their Ladyship/Lordship wish to Yes/No see the fair copy of the Judgment?
THE HON’BLE SRI JUSTICE R. SUBHASH REDDY AND THE HON’BLE SRI JUSTICE A. SHANKAR NARAYANA WRIT PETITION No.26575 OF 2013 ORDER: (Per Hon'ble Sri Justice R. Subhash Reddy) This Writ Petition is filed questioning the notices, dated 26.03.2013 and 01.08.2013, issued by respondent No.2 in exercise of powers conferred under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the Act’).
Petitioner was sanctioned Term Loan of Rs.21,91,000/- and Cash Credit Facility of Rs.1,84,000/- for construction of Mineral Water Plant, purchase of machinery and for working capital on giving the landed property, which is the subject matter of impugned notices, dated 26.03.2013 and 01.08.2013, as security. Petitioner was also sanctioned subsidy to the tune of Rs.8,75,000/- by the A.P. Khadi Village and Industries Board, Hyderabad, under the scheme of Prime Minister’s Employment Generation Programme. The subsidy amount was deposited under Term Deposit Receipt for a period of three years. In addition to the subsidy amount, petitioner was also required to contribute an amount of Rs.1,25,000/-. As the petitioner committed default in repaying the loan amount, respondent No.2 has issued the impugned notices, under Sections 13 (2) and 13 (4) of the Act.
It is the case of the petitioner that though the Term Loan and Cash Credit Facility are sanctioned to the tune of Rs.21,91,000/- and Rs.1,84,000/- respectively, respondents have released only Rs.10,00,000/- and without any reason, they are not releasing the balance amount. It is the further case of petitioner that as the balance amount is not released, she could not complete the project, so as to repay the loan amount as per agreed installments.
Detailed counter affidavit along with supporting material is filed. In the counter, while stating that Term Loan and Cash Credit Facility were sanctioned to the petitioner to the tune of Rs.21,91,000/- and Rs.1,84,000/- respectively, it is stated that Rs.10,00,000/- was already released to establish Mineral Water Plant, but the petitioner did not establish the Mineral Water Plant and has misused the released amount by diverting such fund for constructing residential house, in which the petitioner is now residing. It is further stated that the petitioner has never turned up for release of the balance amount and as the petitioner has violated the conditions for grant of loan, the loan account of the petitioner was declared as NPA and as such, respondents have initiated proceedings under the Act to recover the amount due.
When this Writ Petition is taken up after setting aside the earlier order of default, the learned counsel for petitioner has advanced only one contention that because the respondents have not released the entire loan amount, the Unit could not be completed and repayment of loan could not be made and as such, appropriate directions be given to the respondents to release the balance loan amount.
Learned Standing Counsel for respondent - Bank submits that the account of the petitioner was already declared as NPA and no grounds are raised in the petition assailing validity of the impugned notices, dated 26.03.2013 and 01.08.2013.
Though detailed counter affidavit is filed specifically pleading that the petitioner has not utilised the loan amount for construction of Mineral Water Plant but constructed a residential house, petitioner has not disputed the same by filing reply affidavit. Further, respondents have placed material on record to show that the petitioner has utilised the loan amount for constructing residential house, where the petitioner is presently residing. When the loan itself is granted subject to certain terms and conditions and when such conditions are violated and the loan amount is not repaid, it is always open to the respondents to declare such account as NPA and take steps for recovery of the amount due by initiating proceedings under the Act. Hence, we do not find any merit in this Writ Petition so as to invalidate the impugned notices.
Accordingly, the Writ Petition is dismissed. Miscellaneous Petitions, if any, pending in this Writ Petition shall stand closed. No costs.
R. SUBHASH REDDY, J A. SHANKAR NARAYANA, J August 04, 2015
MD