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TMI Blog2025 (4) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... hi, who is the wife of Petitioner No.2. Since she is a personal guarantor in the loan, she is impleaded as a party in the present matter as Petitioner No.3. 3. Accordingly, the application is disposed of. W.P.(C) 12089/2019 & CM APPLs. 49502/2019, 3005/2020, 14540/2021 4. The present petition reveals the long-drawn journey of Housing and Urban Development Corporation Limited ('HUDCO'), a Non-Banking Financial Company ('NBFC') which had lent money to the Petitioners and the struggles involved in recovering the said money. 5. The Petitioners herein, being Ascot Hotel & Resorts Ltd. and its Promoters have approached this Court under Article 226 of the Constitution of India, seeking relief in terms of directions to HUDCO to abide by a prevalent One Time Settlement ('OTS') Scheme and for further directions to the Debt Recovery Tribunal ('DRT') with regard to the ongoing proceedings between the parties. 6. The brief background of the case deserves to be captured for proper adjudication and disposal of the present petition. Background: 7. HUDCO, being an Indian Public Sector Undertaking engaged in housing finance and infrastructure project finance, had sanctioned a term loan of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l application it is ordered that: 1. The Original application is allowed. 2. The Applicant shall be entitled to recover the sum of Rs. 68,62,91,032/- with simple interest @ 14% p.a. from 01.04.2013 onwards until payment, the sum of Rs. 86,33,299/- the interest component and the sum of Rs. 2 lac cost with simple interest @ 14% p.a. from the date of order i.e. 12.08.2015 onwards until recovery from D1 to D4 jointly and/or severally. 3. The applicant shall be entitled to recover the debt by sale of the hypothecated goods and mortgage properties. 4. The sum of Rs. 10 crores (Ten Crores) paid shall be adjusted towards the principal sum adjudged w.e.f. the date of payment and balance amount shall be recoverable. 5. It is further ordered that the issue with regard to the settlement of claim involving ARC on behalf of the defendant is left open. Details of the cost including court fee on application: Rs. 2,00,000/- It is certified that the above-mentioned sum of Rs. 69,51,24,331/-" 13. HUDCO then initiated execution proceedings before the Recovery Officer, DRT-II, New Delhi, being RC No. 330/15, to recover the above stated amount in terms of the recovery certificate. Pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reconstruction Company or otherwise. Appellant can be expected to render help to the respondents if they bring forward any Asset Reconstruction company to discharge the liability. Counsel for the appellant states that if any such time and concession are to going to be allowed to the respondents, then there should be a default clause also incorporated in the order. This seems to be fairly valid solution to the entire issue. Without going into the fault, if any, on the part of the parties either to make or to receive payment, four months' time from today is allowed to the respondents to discharge the entire liability as determined in the O.A. with simple rate of interest @14% p.a. from the date of filing the O.A. till the date of payment. If the payment is not made within the period of this four months, the appellant would be entitled to recover the amount allowed in the O.A. with contractual rate of interest which is 15.5% p.a. with quarterly rests. I have persuaded myself to adopt this course in order to ensure recovery of the dues of the appellant keeping in view that this Tribunal would always have the discretion to allow the rate of interest as considered appropriate. Irresp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Petitioner No.2. 18. On 15th May, 2019, HUDCO's intervention application being I.A. No. 1599 of 2019 was allowed by NCLAT and accordingly, NCLAT also directed the parties to explore any possibility of settlement. Pursuant to the said direction, an OTS offer was again made by the Petitioner No.1 to HUDCO, which was denied by HUDCO. 19. In the meantime, on 9th May, 2019 the Recovery Officer, DRT-II, New Delhi, upon an application filed by HUDCO in RC No. 330/15, directed Petitioner No.2 to deposit with DRT, the amounts received under the settlement with McDonald's India Pvt. Ltd. This order was then challenged by the Petitioners before the Presiding Officer, DRT-II, New Delhi, by way of DRT Appeal No. 776/2019. However, the Petitioners thereafter deposited the said amount of Rs. 10 crores. 20. The proceedings before DRT/DRAT continued between the parties. The OTS Scheme, which was repeatedly proposed by the Petitioners was rejected by the Respondents on the ground of various calculations being erroneous, in view of the fact that Respondent No.2- HUDCO was of the opinion that it was entitled to recover the entire amount under the recovery certificate. HUDCO felt that the entire a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.2 on 30th July, 2019 has since been encashed by Respondent No.2. He has along with the affidavit enclosed the copy of the Manager's Cheque No. 461359 drawn on HDFC Bank favouring Respondent No.2 for the balance sum of Rs. 56.36 crores. This has been received by learned counsel for Respondent No.2 without prejudice to its rights and contentions. 3. The Court directs that in the event that Respondent No.2 seeks to schedule a public auction afresh, it will inform this Court and the Petitioners in advance. 4. As far as the show cause notices stated to have been issued by Respondent No.2 to the Petitioners, in the event that any coercive steps are taken in consequence thereof it will be open to the Petitioners to apply to the Court. 5. Replies be filed within eight weeks. Rejoinder be filed before the next date. 6. List on 29th April, 2020." 23. As can be seen from the above order, HUDCO was proceeding to auction the property in Noida and in respect thereof, certain interim directions were also issued. The Petitioners were also directed to deposit various sums as captured in paragraph No.2 of the order dated 23rd January, 2020 as set out above. 24. The present writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of on 26th April, 2022 by the Supreme Court in the following terms :- "This petition has been filed against the High Court's order refusing to pass an interim order in the matter. Learned counsel for the parties have jointly and very fairly stated that the interim order granted by this Court on 21.05.2021 may continue till the final disposal of the writ petition, which may be decided by the High Court at an early date. Accordingly, with the consent of learned counsel for the parties, we dispose of this special leave petition with the direction that the interim order dated 21.05.2021, granted by this Court, shall continue till the disposal of the Writ Petition(C) No.12089/2019 pending before the High Court. We, however, request the High Court to expedite the hearing of the said writ petition. We hope and trust that every endeavour will be made by the High court to dispose of the same within three months. With the aforesaid observations, the special leave petition stands disposed of along with the pending applications." 28. As per the above order, the stay on the auction notice of the Noida property continued and the Supreme Court directed that the hearing in this w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 224/2013, which application was allowed. The matter was thereafter taken to the Debt Recovery Appellate Tribunal, where the petitioners on 01.04.2016 undertook to pay the outstanding amount within a period of four months with simple interest @ 14% p.a. The petitioners, however, again defaulted in making the said payment and therefore, a revised recovery certificate was issued against them. 2. It is at this stage that the petitioners approached this Court by way of the present petition. In order to show their bonafide, the petitioners‟ subject to the outcome of the present petition undertook to pay a sum of Rs. 56.36 crores to the respondent no.2, which amount the respondent no.2 accepted without prejudice to its rights and contentions. 3. Learned senior counsel for the petitioners submits that the petitioners have already paid a sum of Rs. 135.83 crores to the respondent no.2 as against the loan of Rs. 62.38 crores advanced to them. However, taking into account, interest is continuously accruing, they, in order to put a quietus to the matter, are without prejudice to their rights and contentions, still willing to pay simple interest @ 14% p.a. as had been undertaken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a settlement, the respondents ought to have restrained from initiating precipitative steps against the petitioners. However, the respondent no.2's plea that the petitioners' bona fide itself is in doubt, cannot be brushed aside. Taking into account the respondent's plea that even in the past the petitioners have failed to abide by their commitments, we are of the view that to examine whether the petitioners are serious about entering into a settlement with the respondents, they should be directed to demonstrate their bona fide by depositing some substantial amount with this Court. We, therefore, direct the petitioners to deposit a sum of Rs. 10 crores with the Registrar General of this Court within one week from today and a further sum of Rs. 10 crores within two weeks thereafter. Subject to the said deposits being made within the time so directed, the respondents will abide by their assurance given to this Court on 16.07.2024 and therefore, make an endeavour to resolve the matter amicably with the petitioners and will also refrain from taking any precipitative steps in respect of the impugned notices till the next date. 6. Needless to state that, in case, the parties are not ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates. Additionally, to the extent possible, OTS are encouraged. Relevant circulars of the RBI are dated 1st July, 2010 and 8th June, 2023. (vi) Ld. Senior Counsel also relies upon the decision of the Supreme Court in Central Bank of India vs. Ravindra And Others (2002) 1 SCC 367 to argue that the Court, while dealing with such cases, does have the power in writ jurisdiction to reduce the rate of interest. (vii) In addition, reliance is also placed upon the decision in Anil Kumar Somani vs. Union of India 2012 SCC OnLine Bom 1867, where a Division Bench of the Bombay High Court has exercised discretion in writ jurisdiction and reduced the rate of interest prescribed by the DRT, which was 16.5% per annum to be calculated quarterly to 6% per annum from the date of filing of the suit. (viii) It is also argued that the Supreme Court has also held that the circulars of the RBI in respect of remission to be granted to MSMEs on interest and grant of OTS ought to be followed strictly. 37. On the other hand, Mr. Rohit Sharma, ld. Counsel appearing for HUDCO has vehemently contended that this is a case which involves public money since HUDCO is a government NBFC. He further submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, the Court ought not to interfere in this case. 41. The Court has heard the ld. Counsels for the parties. 42. There can be no doubt that this is a case where the long-drawn litigation has mounted the dues which the Petitioners have to pay over a period of almost 15 years. The Petitioners have contested the matters in various forums DRT, DRAT, NCLT, NCLAT, this Court as also the Supreme Court. The factual narration above, would show that the final recovery certificate, which is still valid and has not been challenged by the Petitioners, is the order dated 1st April, 2016 along with the default clause as recognized by the recovery certificate dated 20th February, 2019. 43. In terms of the said recovery certificate, in fact, the Petitioners are liable to pay the contractual rate of interest, which is 15.5% per annum with quarterly rests. The recovery certificate has clearly captured the contractual rate of interest itself and therefore, this Court is of the opinion that the Court cannot go behind the recovery certificate and look at the contractual clauses and interpret the same in this writ petition. 44. The initial period of four months, which was granted for accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... released to HUDCO from this Court. The remaining amount due to be payable would be Rs. 129,57,13,058/-. A detailed tabulation of the amount payable by the Petitioner to Respondent No. 2- HUDCO, is set out herein below: Total amount payable as on 31st March, 2025 Rs. 150,18,51,578/- [Rs.86,98,99,435/- (principal amount as per recovery certificate) + Rs. 63,19,52,144/- (interest accrued)]. Total amount to be released by the Court to Respondent No. 2- HUDCO as on 31st March, 2025 Rs. 20,61,38,520/- [Rs. 20,00,00,000/- (principal amount deposited) + Rs. - 61,38,520/- (interest amount)] Final outstanding amount to be paid by Petitioners to Respondent No.2- 2-HUDCO by 30th September, 2025 including litigation cost Rs. 130,07,13,058/- [Rs. 150,18,51,578/- - Rs. 20,61,38,520/- + Rs. 50,00,000/-] 52. If the entire amount is paid by 30th September, 2025, no further interest will be payable for the March 2025 to September 2025 period. 53. Additionally, litigation costs of Rs. 50 lakhs are also awarded to Respondent No.2- HUDCO which shall be cleared by 30th September 2025. 54. If the amounts are not paid by 30th September, 2025, the Petitioners would then be liable to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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