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TMI Blog2008 (1) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... ftab Alam JJ. DATE OF JUDGMENT: 08/01/2008 JUDGMENT: (Arising out of Special Leave Petition (Civil) No.882 of 2006) G. P. MATHUR, J. 1. Leave granted. 2. This appeal, by special leave, has been preferred against the judgment and order dated 17.8.2005 of Delhi High Court, by which a direction was issued to the appellant Oriental Bank of Commerce to declare the respondents account as Non-Performing Asset (NPA) from 31st March, 2000 and to apply the Reserve Bank of India Guidelines to their case and communicate the outstandings which shall be recoverable by quarterly instalments over a period of two years. 3. The respondents Sunder Lal Jain another were sanctioned credit facility for ₹ 20 lakhs on 12.12.1996. The respondent defaulted in repayment of the amount and their account was declared as NPA on 31.3.2001. On 21.2.2002, the appellant Oriental Bank of Commerce filed a petition against the respondents being O.A. No.21 of 2002 before the Debt Recovery Tribunal-III, Delhi (for short the DRT). The DRT passed a decree in favour of the appellant for recovery of ₹ 20,27,862/- along with interest on 14.11.2003. The appellant initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inality. In these circumstances, the writ petition filed by the respondents to declare their account as NPA from 31.3.2000 and to apply the RBI guidelines to their case was not at all maintainable and the order passed by the High Court is clearly erroneous in law. Learned counsel for the respondents has, on the other hand, tried to support the order passed by the High Court and has submitted that the same had been passed on consent of the parties and, therefore, it is not open to the appellant to challenge the same. Regarding the submission of learned counsel for the respondents that the order under challenge has been passed on consent of the parties, it may be noted that the High Court has recorded that the first respondent has agreed to consider declaring the account as NPA from 31st March, 2000. Learned counsel for the appellant bank has vehemently submitted that no consent had been given by the counsel for the bank to declare the account as NPA from 31st March, 2000, nor any such instructions had been given to the counsel by the appellant bank. That apart, the order of the High Court mentions has agreed to consider. It only means that the bank will examine and consider. Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all sectors irrespective of the nature of business which have become doubtful or loss as on 31st March 2000 with outstanding balance of ₹ 10.00 crore and below on the cut off date. b) The guidelines will also cover NPAs classified as sub- standard as on 31st March, 2000, which have subsequently become doubtful or loss. c) These guidelines will cover cases on which the banks have initiated action under the Securitisation and Reconstruction of Financial Asses and Enforcement of Security Interest Act, 2002 and also cases pending before Courts/DRTs/BIFR, subject to consent decree being obtained from the Courts/DRTs/BIFR. d) Cases of wilful default, fraud and malfeasance will not be covered. e) The last date for receipt of applications from borrowers would be as at the close of business on 30th April, 2003. The processing under the revised guidelines should be completed by 31st October, 2003. (ii) Settlement Formula amount and cut off date a) NPAs classified as Doubtful or Loss as on 31st March, 2000 The minimum amount that should be recovered under the revised guidelines in respect of compromise settlement of NPAs classified as doubtful or loss as on 31st March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of chronic Non-Performing Assets (NPAs) of public sector banks were not at all applicable to the facts and circumstances of the case and no direction could be issued to declare the respondents account as NPA from 31st March, 2000. The guidelines further provide that in case where borrowers are unable to pay the entire amount in lump sum, at least 25% of the amount of settlement should be paid upfront and the balance amount of 75% should be recovered in instalments within a period of one year together with interest. The High Court, in the impugned order, has directed that the amount should be recovered by the appellant bank in quarterly instalments over a period of two years. This is again contrary to the revised guidelines, which provide a period of one year only for recovery of the entire amount. 7. It is important to note that the revised guidelines issued by the Reserve Bank of India on January 29, 2003 are only in the nature of internal guidelines for the banks and financial institutions. They are purely executive instructions and have no statutory force. They do not create any right in favour of the borrowers. In order to avail relief under the guidelines, the eligibili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandamus is classed as a legal remedy, its issuance is largely controlled by equitable principles. Before granting the writ the Court may, and should, look to the larger public interest which may be concerned - an interest which private litigants are apt to over-look when striving for private ends. The Court should act in view of all the existing facts, and with due regard to the consequences which will result. It is in every case a discretion dependent upon all the surrounding facts and circumstances. Note 206.--.......... The correct rule is that mandamus will not lie where the duty is clearly discretionary and the party upon whom the duty rests has exercised his discretion reasonably and within his jurisdiction, that is, upon facts sufficient to support his action. 9. These very principles have been adopted in our country. In Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. v. Sipahi Singh and others, AIR 1977 SC 2149, after referring to the earlier decisions in Lekhraj Satramdas Lalvani v. Deputy Custodian-cum-Managing Officer, AIR 1966 SC 334; Dr. Rai Shivendra Bahadur v. The Governing Body of the Nalanda College, AIR 1962 SC 1210 and Dr. Umakant Saran v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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