VENKATESWARA ASSOCIATES Vs. CHIEF MANAGER

JUDGEMENT

(1.) The 1 st petitioner claims to be a Micro, Small, Medium enterprises and engaged in Real Estate business including land acquisition, construction, marketing and sales. The 1 st petitioner has availed OCC INDSME secure scheme facility to a limit of 70 lakh on 30.10.2013 and the 2 nd petitioner had availed an Home Loan facility to a limit of Rs.25 lakh on 11.05.2012 from the 1 st respondent Bank. For the prompt repayment of loan, equitable mortgage in respect of three properties at Saligramam, Madhavaram and Thirumullaivoyal were created and the petitioners would state that in the light of sudden and abnormal increase in the prices of the land and construction materials, the 1 st petitioner had approached the respondent Bank to enhance the facility to a limit of 90 lakhs and it was sanctioned from 07.04.2014 and thereafter the 1 st petitioner had availed the enhanced limit of Rs.89,88,186 on 23.04.2014. Thus, as on 31.11.2014, the 1 st petitioner has availed SME loan amount of Rs.84,41,762/- and the 2 nd petitioner has availed the Home Loan of Rs.21,90,977/-. In view of the defaults committed by the petitioners, the assets were classified as 'Non Performing Assets' (NPA) on 01.12.2014, which according to the petitioners is contrary to the Reserve Bank of India guidelines.

(2.) The learned counsel appearing for the petitioners would submit that in the light of the guidelines issued by the Reserve Bank of India, all Banks were protected while classifying the account as 'Non Performing Asset', especially MSME units and as to the viability of the unit, it shall be done not later than three months from the date of classification of the account as NPA and provide them with full rehabilitation package within 6 months thereon to make it potentially viable and despite that the respondent Bank proceeded further and issued a Demand Notice dated 12.01.2015, under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, calling upon the petitioners to pay a sum of Rs.85,92,601/- and Rs.22,09,833/-, respectively, together with interest from 31.12.2014. The petitioners on receipt of the said notice had deposited a sum of Rs.8.19 lakhs thereafter and however, the respondent Bank proceeded further and issued further Demand Notices.

(3.) The learned counsel appearing for the petitioners would submit that though the petitioners have submitted a request for One Time Settlement proposal, in terms of the scheme formulated by the Reserve Bank of India for MSME Units, the respondent Bank did not care to consider the same and proceeded further and issued a Possession Notice dated 24.06.2015, under Section 13(4) of the SARFAESI Act and upon receipt of the same, further sum of Rs.5.80 lakhs was deposited and repeated representations were submitted for consideration of the OTS scheme and without due and proper application of mind, it was also rejected.