V.Rangasamy Nadar v. The Manager State Bank of India

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:- 29-4-2009CORAM:THE HONOURABLE MR.JUSTICE B.RAJENDRANW.P.No.1924 of 2007 and M.P.Nos.1 and 2 of 2007V.Rangasamy Nadar... Petitioner VersusThe ManagerState Bank of IndiaTaramangalam 636 502Omalur TalukSalem District. ... RespondentPrayer: Writ Petition filed under Article 226 of theConstitution of India for the relief of issuance of writ of mandamusforbearing the respondent from bringing the petitioner's propertyat No.82/1 Arunachalakurukal Street, Taramangalam 636 502 OmalurTaluk, Salem District for public auction sale. Petitioner :- Mr.M.V.Muralidhaaran For Respondents :- Mr.P.D.AdikesavaluO R D E RBy consent of the learned counsel on either side, the writpetition itself is taken up for final hearing. 2. The above writ petition is filed for issuance of a writ ofmandamus forbearing the respondent from bringing the petitioner'sproperty at No.82/1 Arunachalakurukal Street, Taramangalam 636 502Omalur Taluk, Salem District for public auction sale. 3. The only ground of attack of the petitioner is that the StateBank of India came forward with a compromise offer for a one timesettlement with the petitioner and immediately he accepted the saidoffer. But now the respondents are attempting to evict thepetitioner from his property and bring the property for sale inpublic auction. Be that as it may, the petitioner's contention isthat since the offer was made by the State Bank of India and he hadaccepted the offer the subsequent cancellation of the one timesettlement on the ground that is is violative of the R.B.I. circular, https://hcservices.ecourts.gov.in/hcservices/ is legally not sustainable. The compromise offer came from them andtherefore he disputes the action of the respondent in bringing hisproperty for sale in public auction.4. Counter affidavit had been filed on behalf of therespondents, wherein the following facts have been set out.The State Bank of India, Taramangalam Branch, Salem District,the respondent herein, had filed a suit in O.S.No.212 of 1994before the Sub Court, Sankari for recovery of debts due and payableby the petitioner and a preliminary decree was passed as early as14.12.1994 against the petitioner and thereafter a final decree hasalso been passed. But, unfortunately, the State Bank of Indiawithout taking into consideration the decree having already beenpassed, in the routine manner sent the proposal for One TimeSettlement to every customer including the petitioner. Though the OneTime Settlement was offered, the petitioner has not paid the amountbut has chosen to file the present writ petition. In pursuance ofthe interim order passed by this court only the petitioner hasdeposited a sum of Rs.54,480/- . Even this amount is kept by therespondent in separate account. As the petitioner has not compliedwith the One Time Settlement, he will not have any right to compelthe respondent to accept the O.T.S. Further, the discrepancycommitted by the State Bank of India cannot be taken advantage bythe petitioner to seek for the relief of mandamus preventing therespondent from bringing the property for sale in public auction.The one time settlement to be offered by the Bank could only be inaccordance with the Reserve Bank of India Circular and the circularclearly states that the cases pending before courts where decreeshave been obtained will not be covered under the RBI OTS- SME.Pursuant to the R.B.I. Circular only they have taken action torecover the amount by bringing the property for sale. 5. I have heard the the learned counsel appearing for thepetitioners and the learned counsel appearing for the respondents.6. A cursory perusal of the Reserve Bank of India Guidelineswould categorically indicate that the Banks cannot enter into any onetime settlement, if the suit has been filed and a decree has beenpassed in respect of the amount due and payable by the debtor.Admittedly, in this case the suit has been decreed and a validdecree has been passed. Therefore, the one time settlement offeredby the Bank is in violation of the R.B.I Guidelines.7. The next point for consideration would be whether in thelight of the R.B.I circular, the Bank could make an offer for suchOne Time Settlement. In this respect, the learned counselappearing for the respondent points out that unfortunately onewing of the Bank has failed to take into consideration the relevantposition and the civil suit pending before the Sub court against https://hcservices.ecourts.gov.in/hcservices/ the writ petitioner. The earlier letter of offer was only a routineletter sent to all the creditors. Taking advantage of such aletter, the petitioner has come forward with the present writpetition challenging action of the respondent in bring the propertyfor sale. 8. In this connection, the learned counsel appearing for therespondent has brought to the notice of this court the decision ofthe Supreme Court in Civil Appeal No. 4929 of 2004 ( M/S. CALIBREKNIVES PVT. LTD & ANOTHER VS. STATE BANK OF INDIA ) dated 3.8.2004,wherein the State Bank of India itself is a party. In that case alsothe debtor approached the State Bank of India for one timesettlement scheme evolved by them in accordance with the guidelinesof the Reserve Bank of India. But the Debt Recovery Tribunal hasalready passed an order in favour of the Bank and further arecovery certificate was also issued. Without being aware of thestage of the proceedings before the Tribunal, the One TimeSettlement was arrived at by the Bank. Later on, the settlementwas withdrawn by the Bank. Even in that case, the Supreme Courthas passed an order which reads as follows:-"Therefore, it is obvious that the letterwas issued without being aware of the factualposition in regard to the decision of the DebtRecovery Tribunal and the issuance of recoverycertificate.Hence the present case is identical in nature and the same iscovered by the judgment of the Supreme Court.9. On a careful consideration of the facts and circumstances ofthe case and as per the decision in the unreported judgment of theSupreme Court cited above, this Court is of the view that in thiscase also an identical mistake has been committed by the StateBank of India. Hence, the action of the respondent in bringingthe property for sale is valid in law and it has been done pursuantto the R.B.I circular. The State Bank of India is empowered torecall and withdraw the offer of One Time Settlement in accordancewith the Reserve Bank of India circular and in accordance with thejudgment of the Supreme Court. Hence, the petitioner is notentitled for the relief sought for in the writ petition. 10. For the foregoing reasons, the writ petition is dismissed.Consequently, the connected M.Ps are closed. No costs. It ismade clear that the amount deposited by the writ petitioner as perthe interim order of this court will be adjusted by the State Bankof India towards the final settlement of the loan as per the decreegranted by the civil court. https://hcservices.ecourts.gov.in/hcservices/

11. At this juncture, the learned counsel for the petitionersubmits that the petitioner wants to approach the State Bank of Indiafor getting any concession, dehors the Reserve Bank of IndiaCircular, if he is eligible. It is always open to the petitionerto approach the State Bank of India to seek any remedy includingconcession, which may be available to him.Sd/Asst.Registrar/true copy/Sub Asst.Registrarkrr/ToThe ManagerState Bank of IndiaTaramangalam 636 502Omalur TalukSalem District.1 cc To Mr.P.D.Adikesavalu, Advocate, SR.192551 cc To Mr.M.V.Muralidaran, Advocate, SR.19640W.P.No.1924 of 2007BVR(CO)SRA(20/5/2009)