Heard Mr. Shelat, learned Senior Counsel, appearing with Mr. Hathi, learned advocate for the petitioners.
2. The petitioners have, in present petition, prayed for below mentioned reliefs/directions:-
"(a) A writ in the nature of Mandamus commanding the respondent SBI and/or its men and/or agents to act and proceed strictly in accordance with law and forebear themselves from giving any effect and/or further effect of any actions taken prejudicial to the rights and interest of the petitioners without first complying with the Circulars and directives particularly Master Circular DBOD. BP.BC. 143/21.04.012-92 dated 18th June 1992 of the respondent RBI as extended time to time and directing the respondent SBI to forthwith rescind, recall, withdraw and/or cancel the said actions taken;
(b) A writ in the nature of Mandamus commanding the Respondents and/or their agents and/or their sub-ordinates and each of them to give effect and/or to act in compliance with Master Circular DBOD. BP.BC. 143/21.04.012-92 dated 18th June 1992 of the respondent RBI as extended time to time in respect of the term loans and facilities extended to the petitioners pertaining to and/or in connection with the establishment and functioning of the industrial unit of the petitioner no.1 situated at EPIP Bari Brahmana, Jammu and directing the said respondents to forthwith rescind, recall, withdraw and/or cancel all actions taken against the petitioners without first complying with the Circulars and directions of the respondent RBI particularly the Master Circular DBOD. BP.BC. 143/21.04.012-92 dated 18th June 1992 as extended time to time;
(c) A writ in the nature of Mandamus commanding the Respondent RBI and/or its agents and/or their sub-ordinates and each of them to take appropriate steps against the respondent SBI for non compliance with the Reserve Bank of India guidelines and give appropriate directions to the respondent SBI to strictly comply with the Circulars and directives of the respondent RBI particularly the Master Circular DBOD. BP.BC. 143/21.04.012-92 dated 18th June 1992 as extended time to time;
(d) A writ in the nature of Prohibition prohibiting the respondent SBI from giving any effect and/or further effect of all actions taken by them prejudicial to the rights and interest of the petitioners without first complying with the Circulars and directives of the respondent RBI particularly the Master Circular DBOD. BP.BC. 143/21.04.012-92 dated 18th June 1992 as extended time to time;"
3. At the time of hearing present petition, Mr. Shelat, learned Senior Counsel for the petitioners, requested for permission to amend the petition and for that purpose has submitted Draft Amendment dated 30.4.2012.
3.1 The request is accepted. Permission to amend the petition as per the draft amendment dated 30.4.2012 is granted. The amendment shall be carried out forthwith.
4. Let Notice be issued (after amendment is carried out), making it returnable on 28.6.2012.
5. So far as the request for ad-interim relief is concerned, it is noticed that the petitioners have averred thus:-
"1. The petitioner submits that on June 18th, 1992, the Reserve Bank of India (Page-66) issued circular instructing the scheduled Banks that the concession/credit relaxation may be granted to the borrowers upto 31st March, 1993 and indicated possible relaxation that may be granted in favour of the borrowers for promoting trade and industry in the State of Jammu & Kashmir.
1.1 On April 21st, 2004 (Page-75), the said directions were further modified for promoting trade and industry in the State of Jammu & Kashmir. The direction dated June 18th, 1992 indicates that the increased working capital facilities may be sanctioned by way of relaxation in prescribed/standardized norms for inventory and receivables upto a maximum of 50% depending on the merits of each case."
5.1 The petitioners have relied on below mentioned provisions of the Scheme in question:-
"2(ii) All borrower's accounts irrespective of whether ad-hoc facilities were sanctioned in the post or not, would be subjected to review by the concerned banks within a period of three months and need based increased working capital facilities may be sanctioned to borrowers without delay.
2(vi)(a) For term credits, the bank may adopt a flexible and pragmatic approach as regards debt equity ratio, especially for small projects. Reschedulement of the repayment program may also be allowed in deserving cases.
2(vi)(b) The banks may review all irregular accounts within a time framed of three months with a view to exploring the possibilities of regularizing them through sanctioning additional working capital facilities.
2(vi)(d) Liberal acceptance credit/L.C. facilities may be extended to facilitate the purchases on credit. The margin for bank guarantees and in land letters of credit should not exceed 15 per cent depending on merits of each case.
2(vi)(e) The facility for transfer of bank accounts/funds maintained with their branches in the valley to some other designated/specified branch/es outside the Vally, at the request of their customers, may be continued with necessary safeguards so that unauthorized withdrawals or transfers are not encouraged. Similarly, banks may arrnage to designate specific branches outside the Valley to receive instruments drawn on their branches in the Valley.
3(d) The power of rejection of any concesion should vest in an authority above the immediate controlling tier of the concerned branch.
3(e) It may be emphasized that additional fund requirements for implementing the package may be dovetailed into corporate fund deployment strategy of each bank so that higher flow of credit to the borrowers in the State could be affected within a reasonable period of time."
5.2 The petitioners have further averred that:-
2. The Government of India also, in order to promote trade and industry in the State of Jammu & Kashmir framed new industrial policy. The Government of India by notification dated 22.10.2002 initiated Central Interest subsidiary Scheme for the State of Jammu & Kashmir. Para-7 of the said Scheme reproduced as under:
"For the purpose of this scheme, the maximum working capital requirement of a unit shall be working out @ 25% of their annual turnover, inventory norms may be applied, if necessary, after providing for aforesaid minimum level. In respect of such units for which norms have not been laid down/are not applicable (due to the units coming below the cut of point of Rs.10 Lacs of working capital), the request of working capital should be considered favourably so long as the working capital is not very much above such minimum level. Special norms can also be evolved for inventory and receivables. Working capital below the minimum level may be justified under special circumstances in which the requirement is demonstrably lower, as in the case of ancillary units in the small scale sector with asured supply of inputs and off take of output." (Page-93)
6. The petitioner further submits that the Government of Jammu & Kashmir has placed Copper Into Restricted List. Therefore, the import permission was also required to be granted by Government of Jammu & Kashmir which was a time consuming process. The said permission was granted in the year 2008.
During the period of Amarnath Yatra, there was total stoppage of activity for the period of three months. The petitioner further submits that recession of the year 2011 further gave blow to financial health of the company. The petitioner Company was going into loss. The petitioner requested to Bank for restructuring the outstanding dues.
7. It may be appreciated that the Reserve Bank of India desired that all irregular accounts be subjected to review by the Banks within a period of three months and need based increase working capital facilities be sanctioned to borrowers without delay. It has been further provided that the Bank may adopt a flexible and pragmatic approach as regards debt equity ratio, especially for small projects. Reschedulement of the repayment program may also be allowed in deserving cases."
5.3 Having said thus, the petitioners have also averred that:-
"9. Having filed the said application, the Bank has again threatened with the notice under Section-13(2) of the Securitization Act on September 9, 2011 (Page-221). The petitioner forthwith responded the said notice by submitting objection by letter dated September 23, 2011 (Page-224).
10. Further, the State Bank of India issued a notice under Section -13(2) of the Securitization Act on November 22, 2011 for recovery of Rs.64 crores and therefore, the petitioner is obliged to approach this Hon'ble Court.
In the meanwhile, the petitioner has drawn the attention of Reserve Bank of India to the sorry state of affairs regarding financial health of the petitioner Company vide its letter dated 16.04.2012 and requested the bank to look into the subject matter as regards the non compliance of the policy laid down by the Bank and the Government of India."
6. Having regard to the above mentioned aspects and the submissions made by Mr. Shelat, learned Senior Counsel for the petitioners, by way of ad-interim arrangement, below mentioned directions are issued:-
6.1 In the meanwhile, i.e. on or before the returnable date of Notice, the respondent RBI will take into account the petitioners' application/representation dated 16.2.2012 and take appropriate decision, in light of the Notification dated 22.10.2002 read with the RBI instructions dated 21.4.2004 as modified subsequently from time to time, and communicate outcome thereof to the petitioners. A copy of the decision along with reply in response to present petition may be placed on record.
Until the returnable date, no coercive action be taken against the petitioners.
Direct service is permitted.
(K.M.Thaker, J.) kdc Top