PARESH SPINNERS LTD Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) PETITIONER is aggrieved by the assignment of its loan, debts and charges and other collateral securities by respondent No. 1 in favour of respondent No. 3, as advised by the respondent No. 1 to petitioner vide communication dated 15-4-2006, Annexure P-1. In the present petition, petitioner is claiming following relief from this Court:-

(2.) PETITIONER is a Registered Company. It set up an industrial unit by obtaining various loans/fund or non-fund based facilities as detailed in annexure P-1 from the State Bank of India-respondent No. 1. The facilities were secured by pledge/mortgage/hypothecation of assets, including guarantees executed in favour of the respondent No. 1-Bank. The outstanding loan amount together with underlying securities was assigned by the respondent No. 1 to respondent No. 3. This, according to petitioner is impermissible in terms of the reserve Bank of India guidelines dated September 3, 2005. Petitioner expressed its readiness and willingness vide Annexure P-4 to deposit the minimum amount under the OTS by proposing 25% down payment within one month and remaining amount in 12 monthly instalments. Later on, vide annexure P-5, petitioner proposed to settle the outstanding dues of rs. 1,40,09,542/- by making payment in three months. According to petitioner, respondent No. 1 without affording opportunity of hearing, illegally assigned the NPA with securities to respondent No. 3 which is neither a Reconstruction nor a Securitisation Company as defined in Section 2 (v) and (za) of the securitisation and Reconstruction of Financial Assets and Enforcement of security Interest Act, 2002 (hereinafter referred to as 'the Act' for short ). That being the legal position, the respondent No. 1 could not assign outstanding loans and charges over the assets of petitioner Company in favour of respondent no. 3.

(3.) THE next contention of learned Counsel for petitioner was that the guidelines issued by the Reserve Bank of India on September 3rd, 2005 are binding on respondent No. 1 and as such respondent No. 1 was bound to accept the one time settlement offered by the petitioner. Lastly, it was submitted that outstanding dues of the petitioner Company being actionable claim, assignment thereof is only permissible upon execution of an instrument in writing as per section 130 of the Transfer of Property Act, to acquire unsecured rights and remedies of transferor. In view of this, according to learned Counsel for the petitioner, respondent No. 3 could not acquire secured rights and remedies of respondent No. 1 by virtue of assignment.