RIMA TRANSFORMERS AND CONDUCTORS Vs. CANARA BANK

JUDGEMENT

(1.) The petitioner is before this Court calling in question action of the respondent/Canara Bank ('the Bank' for short) in notifying conduct of e-auction on 29/4/2021, further communication dtd. 23/3/2021 whereby the Bank withdraws One Time Settlement ('OTS') that was offered and has also sought for a direction by issuance of a writ in the nature of mandamus to accept OTS.

(2.) The facts adumbrated in the petition are as follows: The petitioner is a private limited Company in the name and style of 'M/s Rima Transformers and Conductors Private Limited', incorporated under the provisions of the Companies Act, 1956. The Managing Director of the Company will be hereinafter referred to as the petitioner. The petitioner approaches the respondent/Bank for availing credit facility. The total loan that was availed by the petitioner was Rs.18.00 crores. The installments towards loan not having been made at regular intervals as was necessary, the account of the petitioner slipped into becoming a Non-Performing Asset ('NPA'). Negotiations were held between the petitioner and the Bank.

(3.) The Bank after issuance of a notice to the petitioner indicating that he has been in huge default in payment of installments, initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short). Again a notice under Sec. 13(4) of the SARFAESI Act was issued on 22/3/2019 seeking to take symbolic possession of the properties of the petitioner mortgaged with the secured creditor i.e., the Bank. It is then the petitioner and the respondent began to talk about settlement and OTS comes to be offered by the petitioner and accepted by the respondent/Bank. The first offer of OTS was accepted by the Bank on 28/8/2019 indicating certain amount in the communication. This was replied to again by the petitioner accepting the terms and conditions mentioned in the letter dtd. 28/8/2019 which directed payment of certain amount.