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TMI Blog2007 (11) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,581.62 paise along with 16.5% pendente lite and future interest with quarterly rests from the date of filing of O.A. till its realization from respondent Nos. 2 to 14 jointly and severally. 2. Facts in brief are that respondent Nos. 2 to 14 along with Smt. Darshan Kaur (since deceased) wife of Late S. Sardar Singh and mother of respondent Nos. 3, 4 and 12 approached the petitioner bank for availment of loan facilities for business purposes in the name of M/s Sardar Associates Limited-respondent No. 2 and a loan for an amount of ₹ 3,54,50,000/- was sanctioned and disbursed from time to time. Respondent Nos. 3 to 14 as well as Smt. Darshan Kaur (since deceased) stood as guarantors and in addition thereto respondent Nos. 2, 3, 7 and 9 mortgaged their properties in favour of the petitioner bank as security of the loan amount. However, respondent Nos. 2 to 14 defaulted in making repayment of the loan. On 31.3.2001, their accounts were declared as Non Performing Assets (NPA) as per the guidelines issued by the Reserve Bank of India. On 9.8.2002, a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he application under Section 21 of the 1993 Act and the appeal filed by respondent Nos. 2 to 14 was entertained without pre-deposit of amount (P-10). The writ petition filed by the petitioner-bank against the aforementioned order was dismissed. It is also appropriate to notice here that the petitioner-bank also filed an appeal before the Tribunal against the judgment and recovery certificate dated 23.11.2006 (P-1 & P-2) claiming pendente lite and future interest @ 16.50% with quarterly rests instead of 12% p.a. On 13.4.2007, the Tribunal dismissed the appeal filed by the petitioner-bank and the appeal filed by respondent Nos. 2 to 14 has been allowed directing the petitioner-bank to make one time settlement as per RBI guidelines applicable at the relevant time (P-14). The Tribunal, however, affirmed the judgment and recovery certificate dated 23.11.2006 (P-1 & P-2). The Tribunal, has further permitted respondent Nos. 2 to 14 to sell the secured properties for clearing dues under One Time Settlement. It has also been ordered that the entire exercise be completed within a period of four months and till such time the petitioner-bank shall not taken any -coercive steps against them. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing learned Counsel for the parties and perusing the record with their able assistance, we find that the short question which arises before this Court is as to whether the guidelines issued by the Reserve Bank of India for one time settlement could be regarded as statutory in character so as to confer a legal right, which could be enforced by issuing directions to the banks/financial institutions by the Courts/Tribunals in exercise of their inherent powers either under Article 226 of the Constitution or any other law. 8. It is undisputed that respondent Nos. 2 to 14 have committed default in making payment of the dues of the petitioner-bank. There is, thus, no equity in their favour. The petitioner-bank has secured assets in the form of various properties as detailed in para 12 of the writ petition, total market value of which is more than ₹ 11 crores as per valuation reports of December 2006, which could satisfy all its claims then there would not be any legal or equitable obligation on the part of the petitioner-bank to enter into one time settlement. A perusal of guidelines/one time settlement scheme issued on 3.9.2005 (P-18) would show that these have been issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or (c) to secure the proper management of any banking company generally; it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions. (2) The Reserve Bank may, on representation made to it or on its own motion, modify or cancel any directions issued under Sub-section (1) and in so modifying or cancelling any direction may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect. 9. A perusal of the aforementioned sections would show that the Reserve Bank of India wherever satisfied may determine a policy in relation to advances which is to be followed by the banking companies generally or by any banking company or by any group of banking companies or the banking company concerned. Such policy as determined by the Reserve Bank of India is determined by keeping in view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h rate of interest which can be charged and the period at the end of which rests can be struck down, interest calculated thereon and charged and capitalized. It should continue to issue such directives. Its circulars shall bind those who fall within the net of such directives. For such transaction which are not squarely governed by such circulars, the RBI directives may be treated as standards for the purpose of deciding whether the interest charge is excessive, usurious or opposed to public policy. 12. It is well settled that in the absence of any statutory obligation created by guidelines or instructions, a writ of mandamus cannot be issued, as has been held in various judgments of Hon'ble the Supreme Court in the cases of Rai Shivendra Bahadur v. Nalanda College (1962)ILLJ247SC ; Umakant Saran v. State of Bihar (1972)IILLJ580SC ; Mani Subrat Jain v. State of Haryana [1977]2SCR361 ; Ramesh Prashad Singh v. State of Bihar (1978)ILLJ197SC ; Union of India v. Orient Enterprises 1998(99)ELT193(SC) ; and Union of India v. C. Krishna Reddy 2004(163)ELT4(SC) . Moreover, in contractual matters the Courts are reluctant to issue a writ of mandamus. In this regard reliance is placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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