P K VENKATACHALAM Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) THE petitioner, Kaveri's Bio Proteins Private Ltd. , has sought for issuance of writ of mandamus directing the first respondent to ensure compliance of the circular issued by the first respondent bearing No. RPCD. PLFS. BC. No. 48/05. 04. 02/2007-08 dated 19. 02. 2008 and consequently, direct the first respondent to issue instructions to the second respondent to reschedule the term loan bearing No. K140901001 extended by them to the petitioner company.

(2.) THE petitioner company is a private limited company situated in a backward area engaged in the manufacture of poultry feeds, cattle feeds, fish feed, aqua feed, animal feed etc. and the same has also been registered as a small scale industry in Agri Sector undertaking on 29. 04. 1994 for which a registration No. 18/11/16652/pm/ssi has been allotted by the General Manager, District Industries Centre, Salem. Since the petitioner was in a constant and increasing need for electricity, they decided to set up a windmill facility for their own consumption. Therefore, the petitioner approached the second respondent, ICICI Bank towards borrowing loan for setting up this facility. After negotiations, the second respondent had decided to extend a term loan of Rs. 80,00,000/- under Account No. K140901001 on the basis of the terms mentioned below:

(3.) IN pursuant to this sanction, the petitioner had also executed all the documents as required under the sanction letter issued by the second respondent. Thereafter, an amount of Rs. 80,00,000/- was disbursed to the petitioner and the windmill has been erected successfully. The wind mill was commissioned only to generate power which was to be supplied to the petitioner's own poultry feed production and poultry farm operational needs at a lesser cost. Further, it is also submitted by the petitioner that they also entered into a power purchase agreement dated 30. 03. 2006 with the Tamil Nadu Electricity Board to generate power by the company by installing one windmill of 225 KW capacity and to transmit such portion of power generated by the windmill to their HT industry premises of the company viz. , Kaveri's Bio Proteins Private Ltd. In wake of the out-break of Avian Influenza (Bird Flu) the Poultry Industry in many parts of the country had suffered huge financial loss on account of culling of the birds as well as the decline in the demand for poultry products. As a result, the prices of the poultry products steeply declined. Taking note of the situation and deterioration in poultry farm in lieu of bird flu, the first respondent herein had come forward with several relief measures and one of the measures suggested by the first respondent was that the principal and interest on working capital loans as also installments and interest on term loans which had fallen due for payment on or after the onset of bird flu i. e. , 31. 12. 2007 and remaining unpaid amounts could be converted into term loans. The remaining portion of the term loan was also suggested to be rescheduled with a moratorium period up to one year depending upon the cash flow generating capacity of the unit. The reschedulement/conversion was to be completed on or before 30. 04. 2008. In view of the above said guidelines circulated by the first respondent by their circular letter dated 26. 02. 2008, the petitioner requested the second respondent to reschedule the petitioner's term loan in keeping with the guideline mentioned above through e-mail dated 01. 03. 2008. Finally, the second respondent, ICICI Bank has made it clear by letter dated 03. 03. 2008 declaring the request of the petitioner stating that reschedulement is not possible.