P. N. BALASUBRAMANI Vs. UCO BANK

JUDGEMENT

(1.) The petitioners have approached this Court challenging the proceedings initiated by the Recovery Officer attached to the Debts Recovery Tribunal-II, Ernakulam bringing certain properties which are now in the ownership of the petitioners (by virtue of Exts.P1 to P4 sale deeds) to sale, for recovery of amounts due from respondents 3 to 10. It is the case of the petitioners that the steps taken to bring the properties to sale without considering the request made by the petitioners for one-time settlement are bad in law.

(2.) The facts which are to be noted for the adjudication of this case may be briefly noticed. The petitioners purchased 29.35 acres of land from M/s. Eden Cardamom Estate, a partnership firm of which respondents 3 to 10 were partners. On 28/6/2011, the date on which Exts.P1 to P4 sale deeds were executed, the petitioners also entered into an agreement undertaking to repay the liability of Rs.2,14,86,060.00 due from M/s. Eden Cardamom Estate and its partners, to the UCO Bank along with future interest and costs etc. It is not in dispute before this Court that though the petitioners made some payments to clear the liabilities to the UCO Bank, they did not pay the entire amount due to the UCO Bank and consequently the Bank initiated proceedings before the Debts Recovery Tribunal by filing O.A.No.226/2015 for recovery of the sum of Rs.2,74,85,532.77 due under one term loan account and Rs.7,08,533.00 due under another term loan account together with future interest at the rate of 16.50% per annum with monthly rests from defendants 1 to 9 in the Original Application, namely, M/s. Eden Cardamom Estate and its partners. The petitioners being purchasers of the property mortgaged with the respondent Bank were also made parties to the Original Application as respondents 10 to 13. It appears that sometime in the month of March 2019, the petitioners approached the Bank with an offer for a one-time settlement which was rejected by the Bank stating that the petitioners have to improve their offer. OA.No.226/2015 was subsequently allowed, permitting the respondent Bank to recover the amounts claimed in the Original Application along with future interest from 18/3/2015 from defendants 1 to 9 in the Original Application. The Recovery Certificate issued in terms of the final order dtd. 20/9/2019 indicates that the respondent Bank is at liberty to proceed against the mortgaged properties, including the properties purchased by the petitioners. Though the petitioners filed an appeal against the order of the Tribunal, the same came to be dismissed on account of reasons which are not readily discernible from the record. The petitioners carried the matter to the Supreme Court of India by filing SLP (C)No.4847-4848 of 2022. The Supreme Court vide Ext.P13 order permitted the petitioners to withdraw the Special Leave Petition and permitted them to approach the Bank for availing the benefit of one-time settlement. The petitioners filed a request for availing one-time settlement, pursuant to Ext.P13 order. The said request made by the petitioners for settlement is on record as Ext.P14. The Bank has rejected the application through Ext.P.15 communication stating that the petitioners who are neither the borrowers nor the guarantors in respect of the loan have no right to claim that their application for one-time settlement should be considered by the respondent Bank. This stand taken by the respondent Bank which was reiterated in Ext.P.18 is essentially under challenge in this Original Petition. It also appears that one of the partners of M/s.Eden Cardamom Estate has filed a complaint alleging that the petitioners have cheated the erstwhile partners by promising to pay a total sum of Rs.2,14,86,060.00 to the Bank and by not doing so.

(3.) The learned counsel appearing for the petitioners would contend that the stand taken by the respondent Bank in Ext.P14 letter is fundamentally different from the stand taken by the Bank in Ext.P12 where the Bank had only requested the petitioners to improve the offer for one-time settlement. It is submitted that in Exts.P15 & P.18, the stand taken by the Bank is that the petitioners are neither borrowers nor guarantors and they cannot apply for one-time settlement. It is submitted that this is clearly contrary to Ext.P13 order of the Supreme Court in SLP Nos.4847-4848 of 2022. It is submitted that the Bank was well aware of the fact that the properties in question were sold to the petitioners. It is submitted that the petitioners were even made parties to the Original Application filed by the Bank before the Debts Recovery Tribunal and it is not open to the respondent Bank to now contend that the petitioners are not borrowers or guarantors and no offer for one-time settlement can be made by the petitioners. The learned counsel places reliance on the judgment of the Supreme Court in Narayan Deorao Javle (Deceased) through Lrs v. Krishna & Ors.; AIR 2021 SC 3920, to support her contention. It is submitted that the Supreme Court, in the aforesaid judgment, has taken the view that even subsequent purchasers of mortgaged properties have a right in the matter notwithstanding the fact that they are neither borrowers nor guarantors. It is submitted that in the light of the declaration of law in Javle (supra), the Bank is liable to be directed to consider the application of the petitioners for a one-time settlement.