VIJAYA BANK Vs. UNION OF INDIA

JUDGEMENT

(1.) Vijaya Bank, Hyderabad, seeks a writ of mandamus to the All India Council for Technical Education, New Delhi (AICTE), the second respondent, to consider its representations dated 20.12.2017 and 21.12.2018. Thereby, the bank had sought permission to adjust three security deposits, aggregating to Rs.65,00,000/-, along with upto date interest, towards the loan liability of M/s.Gurukul Foundation, Secunderabad, the third respondent. This request was made as the said security deposits were held jointly in the names of the second and third respondents.

(2.) The third respondent, a society registered under the Societies Registration Act, 2001, had availed two loans from the petitioner bank to the tune of Rs.4.00 Crore. These two loans were secured by mortgage of properties. To obtain necessary permission from the second respondent, the third respondent society created security deposits of Rs.65,00,000/- with the petitioner bank in its name along with the name of the second respondent jointly. The college started by the third respondent society was however closed down during the academic year 2014-15 and in the meanwhile, as it failed to repay its loans, the petitioner bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The mortgaged properties, including the college buildings, were brought to sale but despite the same, the third respondent society still remained due and liable to pay a sum of Rs.13,61,47,341/- to the petitioner bank as on 31.12.2018. O.A.No.415 of 2014 filed by the petitioner bank before the Debts Recovery Tribunal-I, Hyderabad, for recovery of these dues was allowed on 04.08.2018. While so, as the security deposits of the third respondent society were still available with it, the petitioner bank addressed correspondence to the second respondent seeking its clearance to appropriate the said amounts, as the security deposits were held jointly in the names of the second respondent and the third respondent society. As these communications failed to evoke any response, the petitioner bank approached this Court.

(3.) The Regional Officer, South Central Regional Office of the second respondent, filed a counter. Therein, he stated that the Executive Committee of the second respondent in its 118th meeting discussed the issue relating to defaulting AICTE approved institutions in repaying loans to public sector banks/financial institutions and resolved as under: