GONTI YADAIAH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The petitioner assails the action of the State Bank of India (for brevity, 'the bank') in not considering his representation dated 17.07.2019 and proceeding with the sale of the secured asset contrary to the compromise arrived at between the parties.

(2.) M/s.Sri Krishna Tractors and Farm Equipment, Tukkuguda, Maheswaram, Ranga Reddy District, a partnership firm, being the third respondent herein, availed loan facilities from the bank to the tune of Rs.2.00 crores. The petitioner stood as a guarantor for the same. Default having been committed in the loan repayment, the loan account was declared a non-performing asset and the bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity, 'the SARFAESI Act').

(3.) However, upon the representation dated 14.07.2016 made by the third respondent firm, the bank issued letter dated 08.09.2016 to it, marking a copy of the same to the petitioner and other guarantors, agreeing to the settlement of the loan by payment of Rs.1.80 crores. The upfront amount of Rs.18.00 lakhs already paid by the third respondent firm was appropriated towards the settlement and a sum of Rs.45.00 lakhs had to be paid immediately. The balance amount of Rs.117.00 lakhs was to be paid before 08.12.2016. The bank undertook to release its charge over the secured properties and other securities on payment of the balance amount of Rs.162.00 lakhs. The bank further stated that if for any reason the compromise amount was not received within the scheduled period, it reserved its right to cancel the compromise settlement and the entire dues of the bank as claimed before the Debts Recovery Tribunal or the Court, with interest and costs, would become due for payment.