M/s.Sheeba Engineering Industries v. The State Bank of India Ganapathy Branch

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:29-4-2009CORAM:THE HONOURABLE MR.JUSTICE B.RAJENDRANW.P.No.15812 of 2006 and W.P.M.P.No.15571 of 2006M/s.Sheeba Engineering IndustriesRep. By its Proprietor P.T.AnnammaNo.445, Madha IllamSirukaliamman Koil StreetRed Fields RoadPuliakulamCoimbatore & District.... Petitioner VersusThe State Bank of IndiaGanapathy BranchNo.285 Sathy RoadCoimbatore 641 012Rep. By its Chief Manager ... RespondentPrayer: Writ Petition filed under Article 226 of theConstitution of India for the relief of issuance of writ ofCertiorarified mandamus to call for the records in respect of theimpugned order passed by the respondent vide his proceedings No.CMBR510 dated 16.3.2006, quash the same and direct the respondent toaccept the amount paid by the petitioner on 15.3.2006 as a fullsettlement under OTS Scheme as offered by the respondent Bank videits proceedings dated 14.11.2005. Petitioner :- Mr.R.Suresh Kumar 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 ofcertiorarified mandamus to call for the records in respect of theimpugned order passed by the respondent vide his proceedings No.CMBR510 dated 16.3.2006, quash the same and direct the respondent to https://hcservices.ecourts.gov.in/hcservices/ accept the amount paid by the petitioner on 15.3.2006 as a fullsettlement under OTS Scheme as offered by the respondent Bank videits proceedings dated 14.11.2005. 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 and has also deposited the amount. But, there is a disputeas to whether the payment was made before or after thecancellation of the offer for one time settlement. Be that as itmay, the petitioner's contention is that since the offer was made bythe State Bank of India and he had accepted the offer and paid theamount , the subsequent cancellation of the one time settlement onthe ground that is is violative of the R.B.I. circular, is legallynot sustainable. The compromise offer came from them and thereforehe disputes the impugned order cancelling the one time settlementdated 14.11.2005.4. Counter affidavit had been filed on behalf of therespondents, wherein the following facts have been set out.The State Bank of India, Ganapathy Branch, Coimbatore, therespondent herein, had filed a suit in O.S.No.343 of 1994 beforethe Sub Court, Coimbatore for recovery of debts due and payable bythe petitioner and a preliminary decree was passed as early as9.3.1999 against the petitioner and thereafter they also filed anapplication for passing final decree which was pending. But,unfortunately, the State Bank of India without taking intoconsideration the decree having already been passed, in the routinemanner sent the proposal for One Time Settlement to every customerincluding the petitioner. Therefore, such a discrepancy committed bythe State Bank of India cannot be taken advantage by the petitionerto seek for the relief of setting aside the order of thecancellation of the one time settlement. The one time settlementto be offered by the Bank could only be in accordance with theReserve Bank of India Circular and the circular clearly states thatthe cases pending before courts where decrees have been obtainedwill not be covered under the RBI OTS- SME. Pursuant to the R.B.I.Circular only they have issued the impugned order and the impugnedorder is valid under law. 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 offered https://hcservices.ecourts.gov.in/hcservices/ by 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 againstthe 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 the order of the withdrawal of the O.T.S. 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 3.4.2004,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 circumstancesof the 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 order has been passed and an identicalmistake has been committed by the State Bank of India. Hence,the impugned order passed by the respondent is valid in law and it isonly in accordance with R.B.I circular and there is no infirmity inpassing such an order. 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. The petitioner has not made out anycase for interference with the impugned order of the respondentdated 16.3.2006. https://hcservices.ecourts.gov.in/hcservices/

10. For the foregoing reasons, the writ petition is dismissed.Consequently, the connected M.P is closed. No costs. Sd/Asst.Registrar/true copy/Sub Asst.Registrarkrr/ToThe Chief Manager The State Bank of IndiaGanapathy BranchNo.285 Sathy RoadCoimbatore 641 0121 CC To Mr.P.D.Adikesavalu, Advocate, SR NO.192561 CC To Mr.R.Suresh Kumar, Advocate, SR NO.19317 W.P.No.15812 of 2006 and W.P.M.P.No.15571/06bvr(co)pmk.20.5.2009