TMI Blog2020 (2) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... ced, in a phased manner, the norms styled as prudential norms for income recognition, asset classification and provisioning for the advances portfolio of the banks. Pertinently, Mr.Kamdar does not point out that it is to move towards greater consistency and transparency in the published accounts that the policy has been brought into effect. It is clarified that this policy should be objective and based on record of recovery rather than on any subjective considerations. Likewise, the classification of assets of banks has to be done on the basis of objective criteria, which would ensure a uniform and consistent application of the norms. Importantly, the provisioning should be made on the basis of the classification of assets based on the period for which the asset has remained non-performing and the availability of security and the realisable value thereof. The financial assets which can be sold to the Securitisation Company and Reconstruction Company by any bank or financial institution are non-performing assets, including a non-performing bond/debenture, a Standard Asset where the asset is under consortium/multiple banking arrangements and atleast 75% by value of the asset is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assignment agreements are with Union Bank of India, Andhra Bank, ICICI Bank Limited, Axis Bank, Bank of Baroda, Bank of India, Dena Bank, Indian Overseas Bank, Punjab National Bank, State Bank of India, Oriental Bank of Commerce and Central Bank of India, still, the petitioner has impleaded Canara Bank, Corporation Bank, Indian Bank, Vijaya Bank, IDBI Bank and Life Insurance Corporation of India Limited, all of which are not a party to this agreement. In these circumstances, marking of the documents in favour of these entities would not suffice. Petition dismissed. - WRIT PETITION No. 1893 OF 2019 AND WRIT PETITION (L) No. 223 OF 2020 - - - Dated:- 3-2-2020 - S.C. DHARMADHIKARI R. I. CHAGLA, JJ. Mr. S.U. Kamdar-Senior Advocate with Mr. Nikhil Sakhardande, Mr. Rohan Rajadhyaksha, Mr. Charles DeSouza, Mr. Prasad Lotlikar, Mr. Manaswi Agrawal and Ms. Sakshi Bhalla i/b. Mahima Sinha for the petitioner in WP/1893/2019. Mr. Navroz Seervai-Senior Advocate with Mr. Rohan Rajadhyaksha, Mr. Suyash Gadre, Mr. Prasad Lotlikar and Ms. Vandana Chamle i/b. M/s. Alathea Law LLP for the petitioner in WPL/223/2020. Dr. Birendra Saraf with Ms. Apurva Gupte, Mr. Ishtiaq Ali, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner executed a Master Restructuring Agreement, copy of which is at Exhibit A to the petition. It is dated 31st December, 2011. 6. The Reserve Bank of India issued a notification dated 8th June, 2015 bearing No. DBR.BP.BC.No.101/21.04.132/2014-15 in respect of Strategic Debt Restructuring (SDR Notification). At a Joint Lenders Forum (JLF) meeting held on September 20, 2016 (Review and Reference Date), the lenders of the Petitioner, including respondent Nos.1 to 6, invoked the SDR Notification in respect of the petitioner and M/S Chennai Network Infrastructure Limited (for short, CNIL ). A copy of the minutes of the JLF meeting dated 20th September, 2016 is annexed as Exhibit B to the petition. Pursuant thereto, the JLF through the Union Bank of India, which is a monitoring institution, executed a term sheet containing detailed terms and conditions of the scheme to be implemented in respect of the petitioner under the SDR Notification. The said term sheet was forwarded by the Union of Bank of India to the petitioner under a cover letter dated 14th June, 2017 alongwith the term sheet for the SDR scheme, copy of which, alongwith the terms sheet for the SDR scheme, is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,41,96,635 (Rupees One Thousand Seven Hundred and Fifty Eight Crores Forty One Lakhs Ninety Six Thousand Six Hundred and Thirty Five only) remained outstanding from the petitioner. 10. It is further submitted that similarly, as regards CNIL, the debt of the lenders, including respondent Nos.1 to 6, to the extent of ₹ 2808,95,53,920 (Rupees Two Thousand Eight Hundred and Eight Crores Ninety Five Lakhs Fifty Three Thousand Nine Hundred and Twenty only) was converted into full paid up equity shares of CNIL on and around 13th April, 2017 and only an amount of ₹ 2385,08,72,011 (Rupees Two Thousand Three Hundred and Eighty Five Crores Eight Lakhs Seventy Two Thousand and Eleven only) remained outstanding. The details of the outstanding debt of the lenders, including respondent Nos.1 to 6, pursuant to the aforesaid conversion of debt into equity shares and the details of the shares of the petitioner and CNIL held by the lenders, including respondent Nos.1 to 6, are annexed as Exhibit G collectively. The petitioner submits that it would not be out of place to mention that pursuant to the implementation of the SDR Scheme and merger of CNIL and the petitioner, the lenders, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of telecom operators like Rcom, Tata Tele, SSTL and Telenor. Post completion of the due-diligence process, the petitioner received non-bonding term sheets from 3 investors i.e. AION Capital, Beam Group LLC and a consortium of Piramal Enterprises and Bain Capital Credit. However, owing to the aforementioned adverse circumstances, the consortium of Piramal Enterprises and Bain Capital Credit withdrew from the process and AION Capital and Beam Group LLC also did not pursue their respective offers. 13. The petitioner further submits that since the lenders, including respondent Nos. 1 to 6 were uncertain of the induction of a new investor into the petitioner and the consequent completion of the SDR Scheme, the lenders considered selling their respective debts to an Asset Reconstruction Company (ARC). Accordingly, on 23rd January, 2018, in the meeting of the Core Committee of the lenders of the petitioner, it was deliberated by the lenders to consider a sale of their respective debts to an ARC. In the meeting dated 23rd January, 2018, the Core Committee of the lenders was also informed that respondent No.7 had evinced an interest in buying the debt of the lenders of the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that if the lenders were to sell their debt to an ARC, the monitoring institution (Union Bank of India) ought to circulate a review note on exit of the petitioner from CDR. A copy of the minutes of the Joint Lenders Meeting dated 12th February, 2018 is annexed as Exhibit K to the petition. The said meeting was attended by the representative of respondent Nos. 1, 2, 3 and 5. 17. It is further submitted that pursuant to the discussions and consensus arrived at between the lenders of the petitioner, a process for sale of the petitioner s debt to an ARC was initiated and the bids were invited from the ARCs by giving a public notice published in two newspapers on 28th February, 2018. Exhibit L collectively is the copy of the said publication in the newspapers. At the end of the bidding process, only one binding bid was received, which was made by respondent No.7 jointly with Bank of America Merill Lynch (BAML). The bid of respondent No.7 BAML was discussed by the lenders at the meeting of the consortium of lenders of the petitioner on 23rd March, 2018. As per the joint bid of respondent No.7 and BAML, respondent No.7 and BAML were ready and willing to buy the complete debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the lenders were agreeable to sale off their respective debts to respondent No.7 and the lenders decided to obtain their respective internal approvals for the proposed transaction with respondent No.7 and BAML. The said meeting was inter alia attended by respondent Nos.1 to 6. Copy of the minutes of the meeting dated 3rd April, 2018 is annexed as Exhibit N to the petition. 19. Even while the process for sale to an ARC was under consideration, the petitioner proactively submitted a resolution plan vide letter dated 27th April, 2018 (Exhibit O ). However, in view of the ARC sale process, the resolution plan submitted by the petitioner was not considered by the lenders. 20. By letter dated 8th May, 2018 (Exhibit P ), the promoter of the petitioner expressed its support for the sale of the debt of the petitioner to an ARC chosen by the lenders of the petitioner. 21. Thereafter, in a meeting of all the lenders, including respondent Nos. 1 to 6, held on 24th May, 2018, the lenders, including respondent Nos. 1 to 6 decided to carry out a so-called Swiss-auction process for concluding the debt sale transaction with a reserve price of INR 2,400 Crores. 22. Thereafter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance granted by them to the petitioner in favour of respondent No.7. 27. The fact that the debt of the Union Bank of India, Andhra Bank, Punjab National Bank, Bank of India, Dena Bank, State Bank of India, Bank of Baroda, Axis Bank Ltd., Indian Overseas bank and ICICI Bank Ltd. was assigned to respondent No.7 was communicated by respondent No.7 to the petitioner vide letter dated 29th August, 2018, copy of which is annexed as Exhibit S to the petition. 28. Similarly, Oriental Bank of Commerce and Central Bank of India also assigned all their rights, title and interest in the financial assistance granted by them to the petitioner in favour of respondent No.7 in its capacity as trustee of EARC Trust SC 343 by executing an assignment agreement dated 7th September, 2018. 29. The fact that the debt of the Oriental Bank of Commerce and Central bank of India was assigned to respondent No.7 was communicated by respondent No.7 to the petitioner vide letter dated 10th September, 2018 (Exhibit T ). 30. In view of the above assignments, respondent No.7 acquired 77.07% (by value) of the debt of the petitioner. Accordingly, whilst relying on the IRAC Guidelines, by a letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.75% 13. United Bank of India 75 1.86% 34. The petitioner further states that in the meanwhile, by a letter dated 27th June, 2018, addressed by respondent No.1 to the petition, respondent No. 1 contended that the SDR Scheme had failed; the account of the petitioner has been classified as an NPA retrospectively with effect form 1st July, 2011 (the CDR reference date) and therefore, sought repayment of the entire pre-CDR debt owed by the petitioner to respondent No.1. A copy of the letter dated 27th June, 2018 addressed by respondent No.1 to the petitioner is annexed as Exhibit W to the petition. 35. The petitioner replied to respondent No.1 s letter dated 27th June, 2018 by a letter dated 10th July, 2018 (Exhibit X ) and highlighted that no financial default had been committed by the petitioner under the SDR Scheme and therefore, the contentions of respondent No.1 were misplaced. 36. Respondent No.1 reiterated its demand for repayment of the entire pre-CDR debt owed by the petitioner to respondent No.1 by letters dated 13th July, 2018 and 4th August, 2018 (Exhibits Y and Z ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings in accordance with law. 41. The petitioner further submits that in the meanwhile, on 12th February, 2018, the RBI issued an illegal, arbitrary and unconstitutional guidelines titled as Resolution of Stressed Assets Revised Framework (Revised Framework Circular) for the resolution of stressed assets. 42. On 14th September, 2018, relying upon the Revised Framework Circular, respondent No.1, purportedly, in its capacity as a Financial Creditor of the petitioner, filed Company Petition (IB)-3604(MB)/2018) before the National Company Law Tribunal (NCLT), Mumbai under section 7 of the IBC, which is presently pending final disposal. 43. The petitioner further submits that on 19th September, 2018, the petitioner filed Writ Petition (Civil) No.1156 of 2018 before the Hon ble Supreme Court of India, inter alia, seeking to quash the Revised Framework Circular. Respondent No.1 contested the said writ petition by filing an affidavit in reply dated 24th November, 2018. Pertinently, respondent No.1 annexed a typed copy of the minutes of a meeting of the consortium of the lenders of the petitioner dated 13th July, 2018, wherein, it was expressly recorded that since no counter b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of respondent No.7, by executing Assignment Agreements, all other lenders of the petitioner are also obliged to accept the offer of respondent No.7 for assignment of their respective rights, title and interest in the financial facilities granted to the petitioner. In view of the IRAC guidelines, respondent Nos.1 to 6 are not entitled to treat themselves as creditors of the petitioner and must mandatorily assign their debts to respondent No.7. Since they have failed to assign their respective debts to respondent No.7, respondent Nos.1 to 6 are in blatant violation of IRAC guidelines. The IRAC guidelines constitute a law. The actions of respondent Nos.1 to 6 are not only illegal, but also arbitrary and violative of Article 14 of the Constitution of India. Thereafter in other grounds, particularly, grounds (D) to (Q) of the petition, it is submitted that respondent Nos.1 to 6 be directed by a writ of mandamus or a direction in the nature of mandamus to assign their respective debt owed by the petitioner in favour of respondent No.7 in terms of the IRAC guidelines. 47. In para 7 of the petition it is said that since the proceedings filed by respondent No.1 under the IBC seeking in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om taking any recovery/coercive measures against the Petitioner. 2. The Petitioner submits that since more than 75% of the lenders of the Petitioner have assigned their respective rights to Respondent No.7 i.e. an Asset Reconstruction Company, as per the IRAC Guidelines, Respondent Nos.1 to Respondent No.6 are also obligated to assign their respective debts to Respondent No.7. 3. However, Respondent No.1 has filed an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Petitioner before the NCLT, Mumbai claiming to be a financial creditor while acting in breach of the IRAC Guidelines. The said Application filed by Respondent No.1 to initiate the corporate insolvency resolution process against the Respondent is next scheduled to be listed before the NCLT, Mumbai on January 30, 2020. 4. In the above circumstances, the Petitioner submits that if the above Writ Petition is not heard urgently for ad interim and interim reliefs sought therein and Respondent No.1 s Application under Section 7 of the IBC is admitted by the NCLT, Mumbai, the above Writ Petition would be rendered infructuous. In the above facts and circumstances, BE PLEASED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstallments commencing from 30th September, 2011 till 30th June, 2018. Subsequently, the petitioner has also acquired tower portfolio comprising of 17,500 towers of Aircel Group through its fully owned subsidiary-M/S Chennai Network Infrastructure Limited (CNIL), which subsequently got merged into the petitioner. The combined tower portfolio of the merged entities was around 28000 towers. The first respondent had sanctioned a Term loan of ₹ 750.00 Crores to part finance CNIL for the merger of CNIL. Due to excess tie up, respondent No.1 was allotted a share of ₹ 650.00 Crores as against the sanctioned limit of ₹ 750 Crores and the unallocated portion ₹ 100 Crores was cancelled. Aircel s tower portfolio was acquired at a value of Indian ₹ 8.026.00 Crores. The petitioner s group funded the deal in a mix of debt of Indian ₹ 5,000 Crore and the balance of ₹ 3,026 Crore by way of equity. The deal was completed on 19th July, 2010 and the Term loan was repayable in 34 quarterly installments. 55. It is then said that the petitioner and CNIL faced problems in servicing the debt as per the terms of the respective financing documents and requested t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the lenders in the share capital of the petitioner. In terms of the SDR Scheme, the Rupee Lenders were expected to divest their shareholding in the petitioner company in favour of new promoter for effecting change of Management, as soon as possible, but in any event, not later than 18 months from the review and reference date i.e. upto 19th March, 2018 in line with applicable RBI guidelines. 56. It is alleged that the SDR documents were not complete and the change of Management could not take place within the cutoff date of 19th March, 2018, which resulted in failure of implementation of the SDR scheme and the account of the petitioner is classified as Non-Performing Asset with effect from 1st July, 2011 as per the guidelines of the Reserve Bank of India. 57. After setting out the facts relating to sale of financial assets to respondent No.7 and bank of America Merrill Lynch, it is stated that respondent No.1 had not agreed for the sale of financial assets to respondent No.7 and expressed its dissent vide letter dated 3rd August, 2018. Respondent No.1 expressed its dissent in view of the following facts :- (i) During the change in management process, as discussed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m towers as reported by live mint dated 31st May, 2018, American Tower Company had completed the acquisition of 9900-stand alone towers from Idea Cellular for around ₹ 4000 crores. (ix) Similar transaction was completed by ATC by way of the acquisition of Vodafone India Ltd. s 1,200 stand-alone towers for around ₹ 3,850 crores. (x) Thus, the sale of the Financial Assets of the petitioner with underlying towers of 28000 in number should fetch somewhere in the range of ₹ 10000 crores to ₹ 13000 crores as per actual market deal happened recently. Further, the petitioner, vide letter dated 19th December, 2017 addressed to the lead bank (Union Bank of India) indicated the valuation in the range of ₹ 13,750 to ₹ 15,990 crores. Annexure R-4 to the petition is a true copy of the letter dated 19th December, 2017 of the petitioner company. (xi) The ERAC-BoAML s offer for purchase of Financial Asset with underlying assets of around 28000 telecom towers was certainly an undervalued transaction. Some of the lenders, including respondent No. 1 had raised objections on the ongoing transaction based on the current deals happening in the same tele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the proposed offer was initially made for₹ 2000 crores, which constituted at 48.27% of the outstanding debt (₹ 4143 crores) and the final offer was for ₹ 2400 crores, which constituted at 57.92% of the outstanding debt. (xviii) last consortium meeting was held on 13th July, 2018, wherein, it was decided that the lenders will take up the proposal for sale of debt to ARC with their respective competent authorities and give their final approval by 31st July, 2018. It was also decided that thereafter, a consortium meeting would be convened for closing the deal. Further, Union Bank of India, vide their e-mail dated 1st August, 2018 had requested the lenders to give their approvals at the earliest. However, subsequent to above no lenders meet was held and the transaction was concluded by 10 lenders on bilateral basis with a value of around ₹ 1424 crores i.e. approximately 60% of the outstanding amount on 27th August, 2018, which is a clear violation of consortium spirit and violation of term sheet floated by M/s. Edelweiss ARC and Bank of America Merrill Lynch. That there is no document which can be put on record by way of consortium meeting minutes that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified. It is contended that the Reserve Bank of India, after the Supreme Court judgment dated 12th February, 2018, issued a new circular dated 7th June, 2019 on Prudential Framework for Resolution of Stressed Assets. Pursuant to the new circular, the lenders, including respondent No.1, are free to choose to initiate legal proceeding for insolvency or recovery in accordance with the provisions of new circular. It is stated that all the contentions of the petitioner in this writ petition are obsolete and the petitioner has no grounds to seek any relief under the circular of the Reserve Bank of India. Under the circulars of the Reserve Bank of India, including IRAC guidelines, the Reserve Bank of India issued directions to the banks and financials for the purpose of managing their stressed assets and the borrowers of such banks and financial institutions have no say in such matters. 60. It is, therefore, submitted that respondent No.1 is a financial creditor and the proceedings initiated by respondent before the National Company Law Tribunal (for short, NCLT ) be continued in the interest of justice and that of all stakeholders, including the petitioner. Further, the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he allegations in that petition are more or less identical, but the difference is that the Canara Bank opted to issue the notices in question and under challenge. This is notwithstanding with an explanation submitted by the petitioner to the Canara Bank (respondent No.7) regarding the third proposal dated 2nd June, 2018. It is alleged that respondent No.7 wrote to IDBI Bank (respondent No.3) and all lenders of the petitioner and stated that this third proposal was allegedly not attractive and requested for a meeting of the lenders to discuss this proposal. The response was given to this letter on 13th June, 2018. 64. There were meetings held where this proposal was discussed, but it was not acceptable to the CDR lenders. It is specifically alleged in para 27 of the petition as under :- 27. In the meetings of the JLF held on June 27, 2018 and September 6, 2018, the Petitioner once again submitted revised settlement proposals to the CDR Lenders. However, the Third Settlement Proposal was not acceptable to the CDR Lenders. The Petitioner states that due to the paucity of time, the resolution attempts could not fructify as there was no time to materially better or improve the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd we must interfere in our writ jurisdiction and issue the writ as prayed for. 69. These arguments are adopted by Mr.Seervai and he has also emphasised that the Canara Bank is bent upon on liquidating or winding up the petitioner. It should not be allowed to do so. Our attention has been invited by Mr.Seervai to the communication of 4th June, 2019 by the Canara Bank to M/s.Global Holding Corporation Private Limited on the subject of negotiated settlement with lenders. The bank says that the consortium meeting rejected the negotiated settlement proposed by the petitioner. The Canara Bank firstly alleges that the negotiated settlement proposed by the petitioner was one sided and not taking care of the interest of all stakeholders. The bank is pressing onerous conditions and contrary to the Reserve Bank of India s circulars. It is not assigning any reasons for rejection of the proposal for settlement. Our attention has been invited to the latest circular of the Reserve Bank of India dated 7th June, 2019 and, particularly, on the guidelines on implementation of Resolution plan. It is, therefore, contended by Mr.Seervai that the bank must be directed to execute an inter-creditor agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow, the petitioner s prayer is that this Circular should be complied with insofar as it lays down the Prudential Norms on Income Recognition Assets Classification and Provisioning pertaining to advances. Now, this part of the Circular would require a closer look. The said aspect is found in Part A, 3, 4 and 5. That says, an asset can be termed as Non Performing Asset, if it satisfies the criteria laid down in the definition of this expression. Firstly, this part says that in line with the international practices and as per the recommendations made by the Committee on the Financial System, the Reserve Bank of India has introduced, in a phased manner, the norms styled as prudential norms for income recognition, asset classification and provisioning for the advances portfolio of the banks. Pertinently, Mr.Kamdar does not point out that it is to move towards greater consistency and transparency in the published accounts that the policy has been brought into effect. It is clarified that this policy should be objective and based on record of recovery rather than on any subjective considerations. Likewise, the classification of assets of banks has to be done on the basis of objective crit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. This provides for sale of the financial assets on without recourse basis, i.e., with the entire credit risk associated with the financial assets being transferred to SC/RC, as well as on with recourse basis, i.e., subject to unrealized part of the asset reverting to the seller bank/FI. Banks/FIs are, however, directed to ensure that the effect of the sale of the financial assets should be such that the asset is taken off the books of the bank/FI and after the sale there should not be any known liability devolving on the banks/FIs. (b) Banks/FIs, which propose to sell to SC/RC their financial assets should ensure that the sale is conducted in a prudent manner in accordance with a policy approved by the Board. The Board shall lay down policies and guidelines covering, inter alia, i. Financial assets to be sold; ii. Norms and procedure for sale of such financial assets; iii. Valuation procedure to be followed to ensure that the realisable value of financial assets is reasonably estimated; iv. Delegation of powers of various functionaries for taking decision on the sale of the financial assets; etc. (c) Banks/FIs should ensure that subsequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking recourse to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act ). This provides for sale of financial assets on without recourse basis. This means the credit risk associated with the financial assets being transferred to the creditors. This is subject to unrealised part of the asset reverting to the seller bank/financial institution. The banks are directed to ensure that the effect of the sale of the financial assets should be such that the asset is taken off the books of the bank/financial institution and after the sale, there should not be any known liability devolving on the bank/financial institution. Thereafter, how the sale is to be conducted in a prudent manner, in accordance with the policy approved by the Board and what policy and guidelines the Board should lay down is set out in clause (b) of para 6.4. Further, clause (c) says that the banks and financial institutions should ensure that subsequent to sale of the financial assets to Securitisation Company and Reconstruction Company, they do not assume any operational, legal or any other type of risks relating to the financial asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting assignment agreements, by virtue of the IRAC guidelines, all other lenders of the petitioner are obligated to accept the offer of respondent No.7 for assignment of their respective rights, title and interest in the financial facilities granted to the petitioner. To our mind, this understanding of the senior counsel is flawed and erroneous simply because there is an obligation only when the guidance is adhered to and all precautions are taken before the assignment arrangement for sale. Once these are guidelines and they cannot be elevated or placed at the level of a binding rule, regulation and statute, then, we cannot accept the arguments of Mr. Kamdar. Assuming that these are fulfilled, as projected by the petitioner, still the decision to be taken requires balancing and weighing of several factors. There is a risk which has to be taken and ultimately the policy must be applied on case-to-case basis. We cannot direct respondent Nos.1 to 6, who are financial institutions/banks, to agree to the demand of the petitioner. If these are policy matters and dealing with fiscal and financial issues, then, the discretion of the banks/financial institutions cannot be taken away by issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are summarised. The petitioner seeks to challenge these allegations. However, all the matters pertaining to these allegations are factual issues. The remarks of the first respondent are termed as allegations by the petitioner,but what we find is that it is an evaluation by the first respondent. Its evaluation and financial commitments may not be acceptable to the petitioner, but surely, on the version of the petitioner, we cannot issue the writ as prayed. These are seriously disputed factual issues. Therefore based on all these grounds, the petitioner cannot insist on respondent Nos.1 to 6 to agree with it. It is apparent from a reading of ground (K) that respondent Nos.1 to 6 are public sector undertakings and custodian of public funds. However, before accusing these respondents of acting unfairly, arbitrarily, the petitioner knows that the guidelines of the Reserve Bank of India on all and every possible aspects of financial management, grant of loans and advances, do not have a binding character. Ultimately, the banks have been given a free play in the joint. The decisions are discretionary in nature. The discretion cannot be directed to be exercised in a particular manner when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner and they have to be implemented. 79. We do not think that the grounds raised in this petition, consistent with which Mr.Kamdar raised the arguments, enable us to issue the writ as prayed for. 80. The grounds in the writ petition project a version of the petitioner based on which a relief in the nature of specific performance of contractual obligations is sought in this writ petition. If we make a reference to grounds (N), (O) and (P), then, it is evident that the petitioner say that it has fulfilled its part of promise or obligation and respondent Nos.1 to 6 have refused to comply with the guidelines despite the same. Now, what the reciprocal or corresponding obligations qua the dues of the lenders are and whether they are contractual or statutory in character would have to be established and proved. If these are contractual obligations, then, whether there is absolute refusal to perform the obligations or discharge the duties or that the duties and obligations allegedly attributed to the lenders have been performed only in part and not in full are matters, which would have to be established and proved by the petitioner either in substantive legal proceedings or in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words, this is not an undisputed factual position, but a highly disputed one. It is in these circumstances that we are disinclined to grant any relief. 83. It may be that the seventh respondent has addressed a letter to the petitioner, copy of which is at page 322 of the paper-book, and it claims that it is entitled to recover from the borrowers or guarantors the total dues of the banks alongwith the interest at contractual rate. It makes reference to certain banks mentioned in Schedule-1. This may not be inclusive of all the debts and dues to even Canara Bank. Therefore, this communication may say that the assignment agreements are with Union Bank of India, Andhra Bank, ICICI Bank Limited, Axis Bank, Bank of Baroda, Bank of India, Dena Bank, Indian Overseas Bank, Punjab National Bank, State Bank of India, Oriental Bank of Commerce and Central Bank of India, still, the petitioner has impleaded Canara Bank, Corporation Bank, Indian Bank, Vijaya Bank, IDBI Bank and Life Insurance Corporation of India Limited, all of which are not a party to this agreement. In these circumstances, marking of the documents in favour of these entities would not suffice. All the more when we have made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.7 to enter into a inter-creditor agreement. That is already entered into between the petitioner and remaining domestic lenders (respondent Nos.3 to 6 and 8 to 18). 89. Now, the mandamus that is claimed is once again on the basis of the petitioner s version. The petitioner says, in the grounds of challenge itself, that the prudential framework issued by the second respondent (Reserve Bank of India) provides lenders with a wide array of options to implement a resolution plan for the resolution of the debts owed by the borrowers. Ultimately, it is a resolution plan. Now, whether the word shall appearing therein would denote that it is mandatory to enter into the intercreditor agreement or otherwise or that is not decisive would depend upon this framework and reading of the same in its entirety. Similarly, the disputes and which are purely factual in nature, founded on contractual obligations necessitates consideration of a contra version. That is how ground (A) of the petition is drafted. The intent of the framework is to facilitate decision on the basis of prescribed thresholds. Whether this prudential framework is better in comparison to given one and contains an absolute ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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