In both the appeals as common order dated 26th Aug., 2008 passed by learned single Judge is under challenge and common question of law involved and arising out of common facts, they were heard together and disposed of by this common judgment.
2. The appellants approached the writ court by filing two separate writ petitions for mandamus directing the 2nd respondent Reserve Bank of India to give suitable direction to the respondents 3 to 6, Indian Bank (hereinafter referred to as 'Bank') for releasing the documents lying with the Bank pertaining to account of appellant, M/s.Screen Entertainments and M/s. South India Metal Exports respectively. The Court having dismissed the writ petitions, these appeals have been preferred.
The writ petition has been filed by the petitioner, M/s.Metro Film Corporation for similar relief as claimed by the appellants in the writ appeals.
3. The case of the appellants in nutshell is that they approached the Bank for financial assistance, which was granted and loan was disbursed on various occasions. For different reasons, the appellants failed to remit the dues and loan amount. The Bank filed original applications before the Debts Recovery Tribunal No.I, Chennai (hereinafter referred to as 'DRT'). During the pendency of the cases, one time settlement (hereinafter referred to as 'OTS') was reached on 20th April, 2004 and it was agreed upon that a sum of Rs.225 Lakhs (Rupees Two Hundred and Twenty Five Lakhs) would be paid by the appellants within a period of twelve months from the date of communication of the sanction and also remit a sum of Rs.75 Lakhs (Rupees Seventy Five Lakhs) within a period of thirty days. According to the appellants, they have remitted a sum of Rs.75 Lakhs on 20th May, 2004, within a period of thirty days, but the Bank, instead of adjusting the said amount in Metro Film Corporation account, adjusted Rs.70 Lakhs in Screen Entertainment Account. The balance Rs.5 Lakhs was adjusted to Metro Film Corporation account. The grievance of the appellant is that, contrary to the compromise made between the parties, Kottivakkam property was not released in order to sell the said property to third parties and remit the balance OTS amount, the Bank, in fact, agreed to release the document and also requested the purchaser to deposit a sum of Rs.10 Lakhs in a no lien account. Accordingly, one purchaser had deposited a sum of Rs.10 Lakhs in no lien account of the Bank. Despite the said fact, the Bank had not given no objection to appellants to deal with the said property. In view of the same, the appellants were unable to pay the respective amount within twelve months. Therefore, they requested the Bank for extending the time to settle the balance amount of Rs.220 Lakhs (Rupees Two Hundred and Twenty Lakhs) and on 14th July, 2005, the period of OTS was extended by Bank till 20th Oct., 2005, with same and similar condition, which remained unchanged. The Bank agreed to release the Kottivakkam property on payment of Rs.100 Lakhs and balance of Rs.120 Lakhs was to be paid on or before 20th Oct., 2005. In the said letter, it was agreed by Bank to release the Anna Nagar property on receipt of the balance of Rs.120 Lakhs. Furthermore, it had been agreed that interest @ 11.5% would be collected from 1st Jan., 2004 till the settlement of full OTS amount.
Further case of the appellant is that they mobilised fund from third parties and paid Rs.100 Lakhs on 20th Oct., 2005. Thereafter, they requested for release of Kottivakkam property. However, even thereafter the Bank has not released the documents pertaining to Kottivakkam property. There being a delay of five months in settling the OTS, the appellant agreed topay further amount apart from Rs.295 Lakhs. However, the Bank having not accepted, the writ petitions were preferred, which were dismissed.
4. The case of the Bank is that the Bank moved before the DRT and recovery certificate has been obtained from DRT on 11th March, 2004. It is only thereafter the appellants submitted a proposal of OTS on 17th March, 2004 to settle the entire amount. The Bank agreed for OTS, but the amounts were not paid in time. The appellants had not adhered to the terms and conditions of OTS and, therefore, they are not entitled for any relief as was sought for in the writ petitions, which were rightly dismissed. The appellants, who have remitted the balance amount after a period of five months are not entitled to any relief as prayed for in the writ petitions and they are liable to pay more amount with further interest as per the recovery certificate issued.
5. Learned single Judge, having noticed the aforesaid fact and a Division Bench judgment of this Court in Tamil Nadu Industrial Investment Corporation Ltd. - Vs Millenium Business Solutions Pvt. Ltd. (2004 (5) CTC 689), dismissed the writ petitions. That was a case in which the Division Bench held that
Article 226 could be used by High Court for enforcing a fundamental right or any right for any other purpose, but cannot order for OTS in absence of any violation of any law.
6. We have heard the learned counsel for the parties and noticed the rival contentions. During the pendency of the judgment, it was brought to our notce that recovery officer has also issued a notice on 22nd Jan., 2009, for execution of recovery certificate No.125/02.
It is not in dispute that the appellants failed to pay the amount in terms with the OTS. Admittedly, as per the OTS dated 20th April, 2004, apart from paying a sum of Rs.75 Lakhs within time, the rest of Rs.220 Lakhs were not paid. Even after extension of time granted by the Bank on 15th July, 2005 upto 20th Oct., 2005, the appellants could pay only a sum of Rs.100 Lakhs and the rest of the amount of Rs.120 Lakhs was due. Thus, the OTS could not be given effect in view of the inaction on the part of the appellants. So far as this Court is concerned, under
Article 226 of the Constitution of India, the Court cannot direct the Bank to reach another OTS. It is the domain of the Bank, which may agree on the basis of the proposal, if given by the borrower. So far as the return of documents are concerned, if amount due is found to have been paid within the time prescribed, the Court can issue a writ of mandamus on a Bank to return the documents pertaining to secured assets. In the present case, as we have noticed that OTS could not be given effect because of the inaction on the part of the appellants (borrowers), and now as per the decree of the Debts Recovery Tribunal the recovery certificate has been issued, till it is satisfied by the appellants, they cannot claim for return of the documents relating to secured assets, which they can claim before DRT after its order is complied with.
7. We find no merit to interfere with the order passed by learned single Judge and in absence of merit, both the writ appeals are dismissed. In view of the order passed in the writ appeals, and as the writ petition is also devoid of merits, the same is also dismissed. Consequently, connected miscellaneous petitions are also dismissed. But there shall be no order as to costs.
GLN To
1. The Minister of Finance Government of India Parliament House, New Delhi 1.
2. The Governor Reserve Bank of India Madras 600 009.
3. The Chairman and Managing Director Indian Bank, Central Office No.66, Rajaji Salai, Chennai 600 001.
4. The General Manager (Recovery) Indian Bank, Central Office No.66, Rajaji Salai, Chennai 600 001.
5. The General Manager (Recovery) Indian Bank Circle Office Wellington Estate No.55, Ethiraj Salai, Chennai 600 008.
6. The General Manager Assets Recovery Management Branch Indian Bank, Wellington Estate No.55, Ethiraj Salai, Chennai 600 008.
7. The Presiding Officer Debt Recovery Tribunal I Spencer Plaza 6th Floor Chennai 600 002