2017 (2) TMI 654 - HC - Indian Laws

Extension of time for repayment of dues - Held that - Having regard to the totality of the facts and circumstances, though we find that the judgment of the learned Single Judge need not be interfered with, we deem it proper, looking to the amount to be repaid by the borrower, to extend the time fixed by the learned Single Judge for repaying the dues upto 31.10.2016. Accordingly, we pass the following (i) The borrower shall pay to the Bank the entire balance amount covered by Ext.P3 letter dated 7.4.2015 with interest @ 12% per annum from 30.6.2015 and also comply with all others terms as stated in the said letter, on or before 15.11.2016. Interest shall be paid for the payments made belatedly, taking into account the delay in their remittance from the respective dates as shown in Ext.P3. However, during the aforementioned period, the Bank will have no obligation to release any of the securities, unless otherwise decided by the Bank. (ii) The sale of the scheduled property shall be fixed only after 15.11.2016. However, it is open for the Bank to take all other steps to notify the property for sale, if so advised. (iii) We make it clear that if any of the payments are not made within the time stated supra, it is open for the Bank to proceed further and recover the entire amount ignoring the direction as stated in Clause (i) above. (iv) We make it clear that no further extension of time will be granted to the borrower under any circumstances.

Summary

Issues:
1. Challenge to the judgment dated 14.6.2016 in W.P(C) No.39218 of 2015.
2. Validity of One Time Settlement (OTS) facility extension and subsequent cancellation.
3. Borrower's failure to comply with OTS conditions and subsequent legal actions by the Bank.
4. Applicability of Debt Recovery Tribunal for dispute resolution.
5. Judicial discretion in extending time for repayment.
6. Extension of repayment deadline and consequences of non-compliance.

Analysis:

Issue 1:
The judgment under scrutiny pertains to the challenge against the decision dated 14.6.2016 in W.P(C) No.39218 of 2015. The key directives in the judgment include the borrower's obligation to pay the outstanding amount with interest and comply with the terms outlined in the letter within a specified timeframe. The Bank is granted the authority to proceed with the sale of the scheduled property if payments are not made as per the stipulated timeline.

Issue 2:
The case involves the extension and subsequent cancellation of the One Time Settlement (OTS) facility provided to the borrower by the Bank. Despite the borrower's request for an extension beyond the initial deadline, the Bank rejected the request, leading to the automatic cancellation of the OTS facility by a specified date. The borrower's failure to adhere to the conditions attached to the OTS scheme resulted in legal actions by the Bank to recover the outstanding dues.

Issue 3:
The borrower's non-compliance with the OTS conditions and failure to make payments as per the agreed terms prompted the Bank to initiate legal proceedings under the SARFAESI Act. The Court acknowledged the borrower's partial payments but emphasized the importance of fulfilling the repayment obligations in a timely manner. The judgment reflects the Court's lenient approach in granting the borrower additional time to settle the dues while upholding the Bank's rights to recover the outstanding amount.

Issue 4:
The Court highlighted the borrower's failure to approach the Debt Recovery Tribunal as mandated by law, opting instead to file a writ petition. Despite the availability of alternative legal remedies, the Court chose to entertain the writ petition to facilitate the recovery of dues by the Bank and provide the borrower with an opportunity to repay the loan amount within the extended timeline.

Issue 5:
The judgment underscores the judicial discretion exercised by the Court in extending the repayment deadline and granting the borrower additional time to fulfill the financial obligations. While acknowledging the borrower's financial challenges, the Court emphasized the need for genuine efforts to repay the outstanding dues and cautioned against non-compliance with the repayment terms.

Issue 6:
Considering the borrower's outstanding dues and the absence of substantial repayments during the appeals' pendency, the Court extended the repayment deadline up to 31.10.2016. The judgment reiterates the borrower's obligation to settle the balance amount with interest by the revised deadline and warns of the consequences of non-compliance, emphasizing that no further extensions will be granted under any circumstances.

In conclusion, the judgment addresses various legal aspects related to the borrower's repayment obligations, the Bank's rights under the OTS facility, and the Court's discretionary powers in extending the repayment deadline while ensuring compliance with the terms of the agreement.