M. J. BETTY Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) THE question that arises for consideration in this writ petition is whether the 1st respondent was justified in declaring the accounts of the petitioners to be Non Performing Assets (NPA for short).

(2.) THE facts of the case are that petitioners 1 to 3 herein, who are conducting textile business, had availed of from the 1st respondent cash credit facilities for Rs.56 lakhs, Rs.10 lakhs and Rs.23 lakhs respectively. Insofar as the 4th petitioner is concerned she had availed of a house building loan for Rs. 12 lakhs. As security for the above, petitioners had offered a commercial building in Angamali Town situated in a plot of 6 cents of land. In addition to this two plots having an extent of 35 gents and 25 cents each with building therein, were also given. According to the petitioners these properties are worth at least Rs.8 crores.

(3.) IN spite of it on 03/09/2007 Exts. P6 to P9 were issued requiring them to pay the entire amount availed of by them. They had filed Ext. P10 objection and as they apprehended further action from the Bank this writ petition was filed on 14/09/2007 seeking to quash Exts. P6 to P9 and to direct respondents 2 to 4 to renew the cash credit facility availed of by them. They also sought a further direction requiring the Bank not to take any action pursuant to Exts. P6 to P9. Subsequently, petitioners filed IA No. 12586 of 2007 producing Exts. P12 to P15, statements of account issued by the Bank as on 15/09/2007 which indicate that the credit availed of by them was far below the limit prescribed by the Bank.