TMI Blog2022 (10) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... LAKSHMAN, J. Counsel for the Petitioner : SRI E. MADAN MOHAN RAO, SENIOR COUNSEL FOR SRI M SRINIVAS Counsel for Respondents : SRI METTU SRINIVAS REDDY, SC FOR SBI ORDER This Writ Petition is filed to declare the letter No. SARB: HYD: PMR:MAB 21-22-335, dated 31.07.2021 and letter No. SARB: HYD: PMR:MAB: 21-22:350, dated 06.08.2021, issued by 2nd respondent as illegal and contrary to the SBI OTS 2020 Circular dated 12.10.2020 and OTS sanction letter Ref.No.1149, dated 27.11.2020 and consequently set aside the said letters and direct 2nd respondent to receive the cheque bearing No.141267, dated 27.07.2021 drawn on Axis Bank Limited, Masab Tank, Hyderabad for Rs.37,87,567/- submitted by the petitioner to 2nd respondent bank on 28.07.2021 as compliance of the final installment pursuant to above said OTS sanction letter dated 27.11.2020, and close the loan Account vide A/c.No.3 5424522518. 2. Heard Sri E.Madan Mohan Rao, learned Senior Counsel representing Sri M. Srinivas, learned counsel for the petitioner and Sri Mettu Srinivas Reddy, learned standing counsel for the respondent Bank. Perused the record. 3. The petitioner herein is in real estate business. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The petitioner is eligible for additional incentive of 15% on the OTS amount, on making payment of the entire OTS viii) The petitioner is eligible for additional incentive of 10% on the OTS amount, if the petitioner pays the entire OTS amount within two months from the date of sanction and 5% if the petitioner pays the OTS amount by 31.03.2021. ix) The petitioner is eligible for incentive of 7.5% on the OTS amount, if the petitioner pays 50% of the OTS amount within one month from the date of sanction and 5% if the petitioner pays the 50% of the OTS amount within two months from the date of sanction. The payments made by the petitioner are as follows:- Rs.3,81,000/- paid on 27.11.2020. Rs.7,62,000/- paid on 24.12.2020 Rs.7,62,000/- paid on 27.01.2021 Rs.22,00,000/- paid on 17.07.2021 Thus, in all, the petitioner had paid an amount of Rs.41,05,000/- to the respondent bank and did not pay the loan installments i.e. balance amount by 27.07.2021 which is the due date for payment as per the terms of OTS accepted by the respondent bank. 5. The petitioner herein had submitted letter dated 28.07.2021 duly enclosing a cheque bearing No.141267, dated 27.06.2021 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount, it is the duty of the petitioner to clear the entire amount as per the agreed terms. In the OTS acceptance letter dated 27.07.2020, there is a default clause stating that if the petitioner fails to pay the amount, the OTS shall be Therefore, according to him, the petitioner has to pay the entire amount. With the said submissions, he sought to dismiss the present writ petition. 8. It is relevant to note that the respondent bank has admitted that the petitioner herein had paid an amount of Rs.41,05,000/- within the time i.e. on or before 17.07.2021 and failed to repay the remaining amount by 27.07.2021. 2nd respondent in paragraphs No.3(g) of the counter affidavit categorically admitted that the petitioner herein had submitted letter dated 28.07.2021 duly enclosing the aforesaid cheque for Rs.37,87,567/- (Rs.35,09,995.38ps + interest of Rs. 2,77,571.62 paise). Since the petitioner has not paid the said amount by 27.07.2021, 2nd respondent has treated the OTS cancelled and requested the petitioner to pay the entire outstanding amount vide its letter dated 31.07.2021. 9. In proof of the sale of the property, the petitioner herein had filed agreement of sale, dated 27.07.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rower has already paid substantial amounts, to the creditor under the OTS, and for some remaining amounts is seeking a reasonable extension, such requests can be considered favorably. This shows, that the applicant had an intention to clear the settlement and the deposit of substantial amounts, is an indication in this regard. iii. Reasons which led to delay in the payment - it is important to notice, the reasons, which led to delay on the part of the If the borrower was prevented by certain reasons or circumstances beyond his control, it could be a reason to consider an application for extension favorably. It would be imperative for the borrower to show, that he made his best efforts to ensure that the requisite amounts, are arranged within the specified time, but in spite of all his best efforts, he could not arrange the same. iv. Payments having been accepted by the bank/Financial institutions, after the stipulated date if the bank or the financial institution has been accepting the payments from the borrower towards the settlement even after the stipulated period of time, it shows that the time was not the essence of contract. It would be apparent from such conduct o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to gain more time, without any actual intent to clear the settlement. In the facts and circumstances of each case, the Courts would therefore determine a reasonable period, to enable the borrower to clear the remaining settlement amount, subject of course, to payment of reasonable interest for the delayed period, to balance the vii. Attending factors and circumstances :- Attending factors and circumstances involved, while making an application for extension play an important role to identify eligible and deserving cases as also to determine the extent of extension to be granted. For example , the current situation where the entire country has been adversely effected on account of COVID- 19 pandemic, the difficulties in arranging the amounts could be taken note of while determining the period of extention to be granted to an applicant. Further, accounts which have suffred losses and became NPA on account of having suffered antural calamities, unfortunate accidents, fire incidents, thefts, damage by floods, storm etc., and have come forward for an eventual settlement, can also be considered for extension of time. viii. Irreparable loss and injury to the applicant: - While ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he guidelines of RBI relating to OTS as per its decision in Central Bank of India Vs. in Central Bank of India v. Ravindra [(2002) 1 SCC 367], that the Board of Directors of Bank in the said case could not have deviated from the said guidelines and it s conduct was violative of the equality clause contained in the RBI guidelines and also Article 14 of the Constitution of India. The bank itself has made an offer to accept the proposal of the payment in regard to enforcement of OTS pursuant to the RBI guidelines and it was certainly aware of the amount of securities lying with it. 16. In M/s Indo Swiss Time Limited vs Umrao [AIR 1981 P H 213], the Full Bench of Punjab Haryana High Court held that if there is direct conflict between the decisions of the Apex Court rendered by two equal Benches, the High Court must follow the judgment which appears to it to lay down the law more elaborately and accurately. The mere incidence of time whether the judgment earlier or later could hardly be relevant. 17. In Punjab and Sind Bank Vs. Oberoi Cars Pvt. Ltd. [Man/DE/1668/2022] Delhi High Court relying on the terms of OTS Policy therein, held that the High Court can extend timelines of OT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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