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TMI Blog2002 (9) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent submitted written arguments, which is being considered. 4. The present writ petition has been filed aggrieved by the communication dated 28-8-2001 whereby the respondent bank rejected the petitioner s proposal for one time settlement of the debts of his late father s company in terms of RBI guidelines for non-performing assets. It is pointed out by the petitioner that while rejecting the request, the respondent had assigned two reasons which are unsustainable. The first of the reason being that the offer of Rs. 40.51 lakhs is too low compared to the value of securities available. The second of the reasons which prevailed with the second respondent bank being the proposal has been received after 30-6-2001, which is the last date fixed by RBI guidelines. 5. While challenging the two reasons assigned by the respondents, the petitioner also contended that the contentions/objections raised in the counter that the petitioner is not entitled to invoke the scheme for one time settlement as the borrower has committed fraud and wilful default. According to the petitioner such an objection cannot be raised by way of an answer to the petitioner s claim when the same has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the petitioner even alienated substantial properties to third parties without securing the consent from the bank for all the alienation. The petitioner also moved the Debt Recovery Tribunal in I.A. No. 837 of 2001 to direct the respondent bank to settle the dues in accordance with RBI guidelines. Thereafter the petitioner has filed the W.P. No. 12043 of 2001 and sought for stay of sale under the very same context. The said writ petition was also dismissed on 1-7-2001. The present writ petition is third of the series of writ petitions filed by the petitioner. The petitioner has not approached the court with clean hands. The petitioner has not made a request for settlement in accordance with RBI guidelines on 21-7-2001. The petitioner claimed a settlement under the RBI guidelines as early as 2-2-2001 when the guidelines were not operative. 7. It is contended by the respondent that guidelines do not cover cases of wilful default, fraud and malfeasance. In case of wilful default, fraud and malfeasance, the bank has to initiate prompt action for recovery. The petitioner s case squarely falls under the category of wilful default, fraud and malfeasance. According to the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the impugned order of rejection by the respondent bank is illegal and liable to be quashed ? ( ii )Whether the petitioner could compel the respondent to accept his proposal for one time settlement in terms of RBI Guidelines dated 27-7-2000 as extended ? ( iii )To what relief if any ? All the above points could be considered together. 11. This court has to necessarily refer to certain material facts for appreciation of facts. The deceased Sudharshanlal Guptha during his life- time on 8-10-1996 approached the respondent bank, submitted a pro- posal to pay Rs. 125 lakhs to settle the entire dues of his Group of Companies to the Syndicate Bank s Branches of Royapettah, Nandanam and Madras Main Branch and proposed to pay the entire amount within five months from the date of receipt of approval, besides expressed that he is agreeable to pay a sum of Rs. 50,000 in total towards legal expe- nses incurred by the Bank. Sudharshanlal Guptha passed away on 7-6-1997 and his son Sampathlal Guptha on 31-10-1997 came forward with a proposal to pay Rs. 170.08 lakhs. On 24-1-1998, the respondent bank sent a reply to the effect that the competent authority has permitted the petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appellate tribunal awarded interest at the rate of 15 per cent. The petitioner s application on the original side of this court pending the suit has been dismissed and also the earlier WMP filed by him in the writ petition has been dismissed for non-compliance of the conditions. The Debt Recovery Tribunal has also issued a recovery certificate and the recovery officer initiated action. At that stage, the petitioner moved I.A. 837 of 2001 seeking for a direction directing the respondent bank to calculate the amounts due in accordance with the guidelines issued by the RBI. The said application is being opposed and pending with DRT. At that stage, the impugned communication has been sent to the petitioner by the respondent bank intimating that his offer of Rs. 40.51 lakhs is not acceptable and it is very low when compared to the Rs. 480.41 lakhs and the value of securities available. The above facts are clear from the material papers filed by either side. 14. Admittedly an identical application filed by the petitioner before the DRT in I.A. No. 837 of 2001 filed earlier in point of time is still pending. The said Tribunal is competent to decide the said application. Having i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner s case will fall under the category of wilful default, fraud and malfeasance . As detailed by the respondent, for the past six years and odd the petitioner, his father and brother have been proposing settlement, but they were never bona fide, nor were they serious, but they always determined to delay the recovery proceedings. As rightly contended by the respondent fraud, wilful default and malfeasance has been established when the securities furnished to the Bank namely undivided shares of substantial value has been alienated to third parties while representing that the secured property is free from encumbrance. It was represented in the suit proceedings that there was no fraud or malfeasance, but, demonstrably, the respondent has established that the affidavit filed by the defaulter is false, in that, amount has been realised from the third party-purchasers by sale of undivided shares while in the affidavit it has been stated that substantial sum is due from third parties in respect of the hypotheca. Therefore the scheme will not cover the case of the petitioner who is guilty of fraud, wilful default and malfeasance. That apart, the amount offered by the petitioner is nowhe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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