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TMI Blog2003 (8) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... it petition. It is alleged in paragraph 6 of the writ petition that the factory ran into financial difficulties soon after the production began because of the low demand in the market of the petitioners' product. Hence the petitioner could not achieve the expected profits and hence could not meet the interest liability on the loan. It is alleged in paragraph 7 of the writ petition that the Reserve Bank of India framed guidelines dated 27-7-2000 for recovery of dues relating to Non Performing Assets (hereinafter referred to as 'NPA') of public sector Banks. These were revised on 29-1-2003 which has been quoted in paragraph 7 of the writ petition. True copy of the guidelines is Annexure 1 to the writ petition. It is alleged in paragraph 11 of the writ petition that the cash credit facility falls under the category of NPA from 31-12-1997 upto 31-3-2000. The account became a doubtful asset since it remained NPA for a period exceeding two years on 31-3-2000 and hence it is alleged that a compromise settlement as stated in clause (A)(i) as mentioned in the letter dated 29-3-2003 became applicable to the petitioner's case. It is alleged in para 12 that the petitioner became entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk arbitrarily and for its own convenience transferred an account of Rs. 5.5 lacs from the cash credit (hypothecation) account on 18-3-1999 and termed it as Working Capital Demand Loan (W.C.D.L.). It is stated that the Bank did not transfer the amount from cash credit account to W.C.D.L. account but it was transferred for convenience of the petitioner borrower on the assurance that he will repay the dues within a year after selling ancestral property. In order to help the petitioner the Bank converted over due position into W.C.D.L. and allowed the petitioner to repay the advance account of the proceeds or other sources not disclosed to the Bank. However the petitioner accepted the W.C.D.L. limits by executing the documents in security acknowledging the debts on 2-12-1999 and 31-1-2002 by executing the document vide Annexure C.A. 1. In paragraph 7 of the counter affidavit it is stated that after the year 1999 the petitioner never produced the balance sheets nor informed the Bank about its financial difficulties and no request for rehabilitation, stock revival or inability to pay was ever received by the Bank till 4-3-2003 when all of a sudden the petitioner demanded accommodation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P.A. because the petitioner continued to deposit conditionally the amounts which has been adjusted by the respondent Bank on the interest side and thereby the account of the petitioner was saved from becoming N.P.A. In paragraph 12 of the counter affidavit it is stated that the account of the petitioner was never fell in the N.P.A. category rather it remained under the watch category because the petitioner always deposited such amounts which saved the account from becoming a N.P.A. It is stated that the respondent Bank rightly rejected the request of the petitioner for one time settlement because his case was of wilful default and hence he cannot get benefit of the R.B.I. guidelines. None of the Auditors have recommended classification of the account of the petitioner as N.P.A. Moreover the assets of the petitioner company and of the guarantors are such as would enable the Bank to recover its dues. 5. After hearing the learned counsels for the parties we find no merit in this petition. 6. Before going into the merits of the controversy we may mention that no party has a legal right to get a one time settlement. We agree with the contention in paragraph 3 of the counter affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of legal right to have performed. Note 192 - Mandamus is, subject to the exercise of a sound judicial discretion, the appropriate remedy to enforce a plain, positive, specific and ministerial duty presently existing and imposed by law upon officers and others who refuse or neglect to perform such duty, when there is no other adequate and specific legal remedy and without which there would be a failure of justice. The chief function of the writ is to compel the performance of public duties prescribed by statute, and to keep subordinate and inferior bodies and tribunals exercising public functions within their jurisdictions. It is not necessary, however, that the duty be imposed by statute, mandamus lies as well for the enforcement of a common law duty. Note 196 - Mandamus is not a writ of rights. Its issuance unquestionably lies in the sound judicial discretion of the court, subject always to the well settled principles which have been established by the courts. An action in mandamus is not governed by the principles of ordinary litigation where the matters alleged on one side and not denied on the other are taken as true, and judgment pronounced thereon as of course. While mand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for grant of a writ of mandamus under article 226 of the Constitution and the High Court was not competent to issue the same." (p. 2154) 10. Therefore, there must be legal right with the party asking for a writ to compel the performance of some statutory duty cast upon the authorities. The petitioners have not been able to show that there is any statute or rule having the force of law which casts a duty on the UPFC to accept the proposal of one time settlement made by a borrower whereunder he has given his own terms. It is important to note that at the time when the loan was disbursed to the petitioner, a contract was entered into by them which provides for the rate of interest and mode and manner of payment. The amount of instalment and the date by which it had to be paid was also mentioned therein. The U.P.F.C.is not acting contrary to the terms of the contract which has been entered into between the parties. The State Financial Corporation Act, which governs the working of the U.P.F.C. does not contain any provision for entering into a one time settlement. A Court cannot issue any direction to a party to enter into a compromise or settlement. By the very nature or things a set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trieved. If the industrial concern has valuable land or building or machinery, its sale may give a sizeable amount. However, if the condition of the industrial unit is such that sale of its unit or hypothecated property may not give sufficient money, it may be prudent to enter into a settlement. The human element also cannot be ignored altogether. The unit may be substantially damaged on account of some natural calamity like earthquake, flood or fire or some calamity may fall upon the main person running the industrial concern like death or serious ailment. In such a situation the Financial Corporation, taking a humanitarian view, may in its discretion, enter into a settlement. These are matters to be examined and determined by the experts of the Financial Corporation as to what will be the ideal course to be adopted in a given case. The Courts have neither the expertise nor the knowledge to go into all these questions and then to examine why in one case the offer of one time settlement should be accepted and why in another case it should be refused. The exact idea of the nature and position of the industrial concern can never be fully ascertained by the affidavits filed by the par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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