Ms PRATYUSHA RESOURCES AND INFRA P LTD vs INDIAN BANK on 16 May 2019

ORDER

This petition is filed by the Petitioners with a prayer to grant 60 days time for payment of 6^th installment to the respondent bank in pursuance to the OTS sanction given by the respondent bank in the interest of justice.

2. According to the case of petitioners, Mr. PV Prabhakara Rao is the Director of the first appellant herein and petitioners we have filed the above petitioner challenging the Possession notice published by the respondent herein and further submitted that the first appellant is a private limited company and the second and third appellants are the Directors of the first appellant company and the others appellants are the guarantors for the credit facilities availed by the first appellant herein. The first appellant herein availed OCC facility of Rs.65 crores, Working Capital Term Loan of Rs.88 crores, Funded Interest Term Loan of Rs.10.60 crores and Bank Guarantee of Rs.70 crores from the respondent bank in the year 2015 and mortgaged the schedule properties in favour of the respondent bank towards security for the credit facilities availed by the first appellant company. Petitioners further submitted that in the year 1989 initially started as a stevedoring company and subsequently ventured into iron ore rising and exports and also infrastructure projects and enjoyed various credit facilities from the respondent bank and further submitted that it has paid more than Rs.150 crores as interest to the respondent in respect of the various credit facilities availed by the first appellant herein. Petitioners further submitted that due to the inevitable circumstances and due to ban imposed by the Hon'ble Supreme Court of India on export of Iron ore, iron ore stocks was held up at the ports which resulted in huge losses and further Odisha Mining corporation limited has cancelled the 7 year mine raising contract given to the first appellant herein and further project division also suffered a setback as the largest road project of NH 215 has been stuck down due to non receipt of forest clearance and further as there is price fluctuation in respect of iron ore prices in international market and the first appellant A handwritten signature in dark ink, appearing to read "Dheeraj" or similar, written over a long, slightly curved horizontal line.

company sustained huge losses and as such could not repay the amount due to the respondent bank as per the sanctioned terms and the appellant company never intended to avoid payment to the respondent bank and having long association with the respondent bank made a representation by way of letter dated 20.09.2016 appraising the facts and with a request to reschedule the credit facilities. Petitioners further submitted that petitioners made several OTS Proposals for settlement of the liability and finally the respondent bank accepted OTS proposal for an amount of Rs. 115 crores and as per the terms and conditions of the said OTS petitioners have to pay Rs.16 crores at the time of sanction of OTS and remaining Rs.99 crores in 08 (eight) equal quarterly installments and further permitted them to pay the amount by disposing the mortgaged properties as such the above SA was disposed off in view of the compromise. Petitioners further submitted that as per the terms of sanctioned OTS petitioners paid Rs.16 crores at the time of sanction and paid further 5 installments regularly as per the sanctioned terms. Petitioners further submitted that due to the General Elections proposed A handwritten signature in dark ink, appearing to be "S. Rao" or similar, written in a cursive style with a long horizontal stroke extending to the right.

buyers have postponed the payment of the amount as such petitioners could not pay the 6^th installment in time as such petitioners made a letter dated 30.03.2019 to respondent bank requesting 60 days time for payment of the 6^th installment and further informed them that petitioners are ready to pay interest for the delayed period but the respondent bank without considering bonafide intention and without considering earlier payments in time, bank issued letter on the same day i.e. 30.03.2019 informing petitioners that OTS stands cancelled and will proceed further under SARFAESI Act. Petitioners further submitted that they never intended to avoid payment to the respondent bank at any point of time but the respondent bank without considering our long standing relation and without considering our bonafide intention to pay the OTS amount straight away issued letter against the principles of natural justice and prayed to grant 60 days time for payment of 6^th installment to the respondent bank in pursuance of the OTS sanction given by the respondent bank in the interest of justice.

A handwritten signature in dark ink, consisting of stylized loops and a long horizontal stroke at the bottom.

3. Counter has been filed by the respondent bank denying the petition averments and further submitted that grant of 60 days time for payment of 6^th installment to respondent bank does not arise since the purpose of giving OTS sanction is to recover the amount in a prescribed time and further submitted that petitioners failed to pay the 6^th installment and now on pretext of general election trying to avoid the repayment of OTS amount. The respondent bank submit that as per the OTS, borrower company has comply all terms and conditions and in case of failure to comply with the any of the conditions, OTS sanction will automatically get cancelled and remittances, if any made by the parties including the upfront amount under the OTS sanction, will stand appropriated towards the total dues as if there is no One Time Settlement and the Bank will proceed with all available legal course to recover its entire dues. Hence as the borrower company failed to comply the terms and condition of OTS sanction and OTS sanction is to recover the amount in a prescribed time and further submitted that the present petition is devoid of merits and as on the date of filing this petition there is no matter pending on the A handwritten signature in dark ink, appearing to read "Dale" or "Dalee", written in a cursive style with a long horizontal stroke extending to the right.

file of the Tribunal as such seeking extension of time through this Tribunal is not correct.

4. The point for consideration is whether the petitioners are entitled for granting 60 days time for payment of 6^th installment to the respondent bank in pursuance to the OTS sanction given by the respondent bank in the interest of justice as prayed for or not.

5. Heard both sides. Ld Counsel for petitioners argued that the petitioners filed the present petition with a prayer to grant 60 days time for payment of 6^th installment to the respondent bank in pursuance to the OTS sanction given by the respondent bank in the interest of justice. According to the petitioners respondent bank initiated SARFAESI proceedings against the applicants/petitioners and as such applicants/petitioners filed SA 91/2017 and during pendency of SA 91/2017, respondent bank accepted OTS proposal for an amount of Rs.115 crores and as per the terms and conditions of the said OTS, petitioners have to pay Rs.16 crores at the time of sanction of OTS and remaining Rs.99

A handwritten signature in dark ink, appearing to read "Dale" or "Dalee", is written over a horizontal line.

crores in 08 (eight) equal quarterly installments and further permitted them to pay the amount by disposing the mortgaged properties as such the above SA was disposed off in view of the compromise. As such SA was disposed off. It is the case of the petitioners as per the terms of sanctioned OTS, petitioners paid Rs.16 crores at the time of sanction and paid further 05 (five) installments regularly as per the sanctioned terms. Petitioners further submitted that due to the General Elections, proposed buyers have postponed the payment of the amount as such petitioners could not pay the 6^th installment in time as such petitioners made a letter dated 30.03.2019 to respondent bank requesting 60 days time for payment of the 6^th installment and further informed them that petitioners are ready to pay interest for the delayed period but the respondent bank without considering bonafide intention and without considering earlier payments in time, bank issued letter on the same day i.e. 30.03.2019 informing petitioners that OTS stands cancelled and will proceed further under SARFAESI Act. Therefore, petitioners submitted that the present petition MA 39/2019 was filed. It is *Dneel*

the contention of the respondent bank that as per the OTS, borrower company has comply all terms and conditions and in case of failure to comply with the any of the conditions, OTS sanction will automatically get cancelled and remittances, if any made by the parties including the upfront amount under the OTS sanction, will stand appropriated towards the total dues. At the time of arguments, Ld Counsel for petitioners relied on decision in AIR 2013 Punjab and Haryana 218 and as per the judgment "under RDDB Act - Recovery of Loan and One Time Settlement and Revocation of and default on part of borrower to make payment of settle amount and deposit of entire settlement amount with interest for delayed period sought by Bank even after expiry of stipulated period mentioned in settlement. It was held that time prescribed in settlement thus not essence of contract and bank entitled to claim interest for delayed period and borrowers had deposited amount and also paid interest, as per calculations given by bank and the bank thus had no right to revoke settlement. It was held that revocation of settlement not proper. Therefore, as per the principles of natural justice, Bank A handwritten signature in dark ink, appearing to read "D. N. Rao" or similar, written in a cursive style with a long horizontal line extending from the bottom right.

has no right to revoke OTS settlement agreed by Bank. So, therefore in view of above decision and as per the principles of natural justice, it is crystal clear that borrower has got every right to pay the balance OTS amount with interest into the respondent bank and respondent bank has to accept the delay OTS balance amount with interest. Admittedly, in the case on hand, five installments of OTS have been paid into the respondent bank and petitioners / applicants has to pay only 6^th installment into the respondent bank and failed to pay the 6^th installment into the respondent bank due to general election and buyers have postponed the payment and respondent bank further permitted petitioners/applicants to pay the amount by disposing the mortgaged properties. Therefore, merely because one installment i.e. 6^th installment was not paid, it cannot be said that applicants/petitioners have no right to pay the 6^th installment of OTS into the respondent bank with interest.

6. Therefore, considering the facts and circumstances of the case, I am of considered opinion that applicants/petitioners are entitled to pay the 6^th installment of OTS amount with interest as A handwritten signature in dark ink, appearing to read "Daleel", is written over a horizontal line.

fixed by the Tribunal. Therefore, 6^th installment of OTS amount may be paid by the applicants/petitioners herein on or before the end of September, 2019 as per OTS sanction by respondent bank. So, therefore I am of further opinion that applicants/petitioners are entitled to pay the 6^th installment of OTS amount into the respondent bank @ 12 % per annum simple from March, 2019 till the payment of 6^th installment into the respondent bank.

In the result, this petition MA 39/2019 is allowed with a direction to the applicants/ petitioners to pay the 6^th installment OTS amount with interest @ 12% per annum simple on or before the end of September, 2019 and respondent bank is directed to receive the 6^th installment OTS amount along with interest @ 12% per annum simple as and when paid by the applicants/petitioners on or before the end of September, 2019 and further OTS sanction by respondent bank shall stand continued and will be in force till the end of September, 2019 i.e. till the end of total OTS period granted by respondent bank.

Each party to bear their cost.

Let the copy of the order be made available to the parties as per rules.

[Dictated to PS, transcribed by him and corrected and pronounced by me in the open court on this 16^th day of May, 2019]

PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL VISAKHAPATNAM