SREE GEETHANJALI CONSTRUCTIONS Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) Petitioner Nos.1 and 3 are the principal borrowers whereas petitioner Nos.2 and 4 are the guarantors in regard to the loans which were obtained by petitioner Nos.1 and 3 from the respondent Union Bank of India. On account of the failure on the part of the petitioners to repay the loans in accordance with the terms and conditions settled, the accounts of the petitioners were declared as Non-performing Assets (N.P.A.). Proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "SARFAESI Act") were initiated for taking possession of the properties, which were secured assets with the respondent bank, and also sale and auction of the said properties. Based upon the proposal for One Time Settlement (for short, "O.T.S."), it appears that the Union Bank of India, vide communication dtd. 6/1/2024, laid down the terms and conditions of the said O.T.S.

(2.) According to the said terms and conditions, the petitioners had to pay upfront amount of Rs.1.92 crores, which was already available with the bank and had only to be adjusted. According to condition (B) of the settlement, an amount of Rs.3.00 crores was to be deposited within 20 days of the date of the conveying of the approval to the borrower. This condition is also stated to have been complied with. According to condition (C) of the settlement, the balance amount had to be paid within three months from the date of conveying the approval to the borrower. The balance amount was approximately Rs.15.18 crores. It needs to be seen that according to the other conditions of the O.T.S., the balance amount, which was required to be paid within three months, had to be arranged by sale of properties which were mortgaged with the bank.

(3.) It is the admitted case of the parties that two of the such mortgaged properties were released in favour of the petitioners which were sold and the amount was deposited with the bank. The petitioners claim that contrary to the terms and conditions agreed between the parties and recorded in the O.T.S. dtd. 6/1/2024, the respondent bank, without any prior notice to the petitioners, cancelled the agreed terms by virtue of communication dtd. 3/7/2024 by which time, an amount of Rs.4.92 crores had already been deposited with the bank.