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TMI Blog2023 (4) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... e lending institution and the borrower agree to proceed with the efforts towards finalizing or restructuring plan to be implemented in respect of such borrower. The petitioner submits that it had applied before the respondent bank for implementation of the said scheme by an application dated 21.07.2021. In response to the said application, the bank had replied by way of an e-mail, a copy of which is found at Annexure-A page 49 of the counter affidavit - As such by definition prescribed under the IBC, 2016 the applicant does not come within the definition of corporate applicant. Consequently, the insolvency and Bankruptcy (pre-packaged insolvency) Rules, 2021 are not applicable in so far as the petitioner is concerned. It appears that this writ petition is directed solely as a ploy to delay the further proceedings initiated under the SARFAESI Act which has already been initiated against the petitioner. The SARFAESI Act is a complete code in itself and it has statutory Authorities prescribed for redressal of grievances raised by the petitioner in the writ petition. This Court is of the considered view that there was sufficient laches on the part of the petitioner in pursuing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk of India, Khanapara Branch. The respondent No. 4/Bank of India after due consideration of the application by the petitioner, granted loan on various credit facilities vide reference No. KHA/ADV/2016-17/SME/45 dated 04.01.2017 aggregating to an amount of Rs. 7,88,02,679.82 (Rupees seven crore eighty eight lakh two thousand seventy nine and eighty two paisa) towards the petitioner. Due to COVID-19 pandemic situation and nationwide lockdown which was enforced by the Government of India, the business of the petitioner firm suffered severe losses and the petitioner consequently defaulted in the repayment schedule for the loans advanced by the respondent No. 4/Bank of India. According to the petitioner, the total amount of loans sanctioned under the various facilities which was advanced to the petitioner by the respondent Bank and the corresponding dues required to be paid by the petitioner came to a total of Rs. 7,01,59,977.19 (Rupees Seven Crore One Lakh Fifty Nine Thousand Nine Hundred Seventy Seven and Nineteen Paisa only). The break up as furnished by the petitioner in its pleading are extracted as under: a. Cash Credit Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Pre Packaged Insolvency Resolution Process to deal with those businesses which were classified as NPAs during the COVID-19 Pandemic period. The Government of India had initiated steps to provide fillip to those business operations during the COVID-19 Pandemic period, which have MSME Registration. It is submitted that under both these schemes, the petitioner s case ought to have been considered by the respondent Bank but instead the respondent bank initiated SARFAESI proceedings which is contrary to the RBI Circular as well as to the Government of India scheme for Pre Packaged Insolvency Resolution Process. The learned counsel for the petitioner submits that the petitioner firm comes within the eligibility criteria provided under both the schemes and as such benefits under the said Schemes ought to have been extended to the petitioner firm by the respondent bank. The proceedings initiated by the respondent bank under the SARFAESI Act is contrary to the RBI Circular as well as the Government of India Scheme. It is submitted that the RBI Circular is binding on all banks including the respondent No.4/Bank. The further submission of the learned counsel for the petitioner is that these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tested the case of the petitioner by filing its counter-affidavit. It is contended that contrary to the contentions raised by the writ petitioner, the Bank had responded to the application submitted by the petitioner for restructuring the account as stated. It is contended that in terms of the RBI Circular dated 05.05.2021 the request by the petitioner for re-structuring the account under the resolution framework 2.0 of the RBI Guideline was communicated by an email dated 30.12.2021 by the Branch Manager, Khanapara Branch of the Bank. The extract of the email is enclosed as Annexure-8, Page 49 to the counter-affidavit filed by the respondent/Bank. The petitioner was requested to deposit the amount required immediately for upgradation of the loan account so that the restructuring process can be implemented as per the scheme. However, the said amount not being deposited in response to the e-mail issued, the restructuring could not be proceeded with. It is contended that since the restructuring of the loan account under the RBI resolution framework 2.0 could not be proceeded with, the bank proceeded to issue notice under Section 13(2) of the SARFAESI Act. In response to the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in support of her contentions that where the Government of India has taken specific measures to mitigate the hardships and distress faced by the various business entities like the petitioner during the COVID-19 pandemic situation, the banking authorities were duty bound in law to enforce such measures brought in by the Government of India and the banking authorities are responsible to ensure that all the steps are taken to implement the decision of the Government of India so that the benefits as contemplated by the Government of India percolates to those for whom the financial benefits have been envisaged and extended. In the same context, the learned counsel for the petitioner presses into service the Judgment of the Apex Court rendered in M/S Sardar Associates Ors Vs. Punjab and Sind Bank Ors reported in (2009) 8 SCC 257 to buttress her contention that when guidelines are issued by the RBI, a right is created in favour of the borrower. It is, therefore, submitted that the benefits conferred under the RBI Circular No. DOR. STR. REC. 12/21.04.048/2021-22 regarding Resolution Framework 2.0 and the Pre packaged Insolvency Resolution Process under Insolvency and Bankruptcy Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the entities like the petitioner that the Government had time and again brought out different schemes to ameliorate the grievances and the hardships faced by the business entities. 9. There is no dispute that the RBI by circular No. DOR. STR. REC. 12/21.04.048/2021-22 had brought out resolution framework 2.0- Resolution of COVID-19 related stress of Micro, Small and Medium Enterprises (MSMEs). For the purposes of this case Sub Clause (vi) (vii) of clause 2 are relevant. The same are extracted below: (vi) The restructuring of the borrower account is invoked by September 30, 2021. For this purpose, the restructuring shall be treated as invoked when the lending institution and the borrower agree to proceed with the efforts towards finalizing a restructuring plan to be implemented in respect of such borrower. The decisions on applications received by the lending institutions from their customers for invoking restructuring under this facility shall be communicated in writing to the applicant by the lending institutions within 30 days of receipt of such applications. The decision to invoke the restructuring under this facility shall be taken by each lending institution havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he financial affairs of the corporate debtor; 12. As such by definition prescribed under the IBC, 2016 the applicant does not come within the definition of corporate applicant. Consequently, the insolvency and Bankruptcy (pre-packaged insolvency) Rules, 2021 are not applicable in so far as the petitioner is concerned. 13. The contention of the petitioner that the benefit under the Emergency credit Line Guarantee Scheme which was initiated by the Government of India was also denied to the petitioner. Although an averment in support of such contention is not pleaded in the writ petition initially but the same has been brought on record by way of a rejoinder affidavit. However, a careful perusal of the rejoinder affidavit reveals that there is no statement that the petitioner made necessary application under the Emergency credit Line Guarantee Scheme to avail the benefit as provided under the said scheme. It is merely contended that the petitioner has been deprived of the benefits under the said scheme by the bank. The learned counsel for the petitioner also has not been able to bring it to the notice of the Court any such application that has been preferred by the petitioner s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the Apex Court held that it is the solemn duty of the court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the taxpayer's expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. 16. While there is no quarrel with the proposition of law laid down by the Apex Court which are pressed into service by the learned counsel for the petitioner, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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