Strides Air Systems (P) Ltd v. The Authorised Officer

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 03.07.2019 CORAM :

THE HON'BLE MRS.VIJAYA K.TAHILRAMANI, CHIEF JUSTICE AND The HON'BLE MR.JUSTICE M.DURAISWAMY W.P.No.9768 of 2019 and W.M.P.No.10363 of 2019 Strides Air Systems (P) Ltd., rep by its Director 40/1, Vayalur Road, Namachivayapuram, Thodukadu Village, Thiruvallur District - 602 105.

.. Petitioner Vs.

The Authorized Officer, The State Bank of India, Stressed Assets Recovery Branch, Red Cross Building, II Floor, No.32, Montieth Road, Egmore, Chennai - 600 008.

.. Respondent Petitions filed under Article 226 of the Constitution of India praying for issue of Writ of mandamus directing the respondent to consider the representation of the petitioner dated 21.02.2019 for One Time Settlement of the loan accounts pursuant to the letter of acceptance dated 16.02.2019 issued by the respondent within a time frame.

For Petitioner : Mr.Y.Prakash For Respondent : Mr.K.Chandrasekaran

O R D E R

(ORDER OF THE COURT WAS MADE BY M.DURAISWAMY, J.) The above Writ Petition has been filed by the petitioner to issue a Writ of mandamus directing the respondent to consider the representation dated 21.02.2019 for One Time Settlement of the loan accounts pursuant to the letter of acceptance dated 16.02.2019 issued by the respondent within a time frame.

2.It is the case of the petitioner that they gave a proposal for One Time Settlement dated 13.02.2019 agreeing to pay a sum of Rs.2,75,00,000/- as OTS amount. 3.The respondent - Bank, by letter dated 16.02.2019, agreed for the proposal and called upon the petitioner to make a upfront amount of Rs.68,75,000/- within three days from the date of receipt of the said letter and also made it clear that the balance amount of Rs.2,06,25,000/- has to be paid before 25.03.2019 and in case of non-payment before 25.03.2019, the compromise settlement offer will become infructuous.

Further, in paragraph - 6 of the said letter, the respondent - Bank also made it clear that if the agreed amount is not received within the scheduled time period, the Bank would cancel the compromise settlement offer and the entire dues of the Bank as claimed before the DRT/Court in Original Application with interest and costs will become due for payment. 4.Thereafter, on 14.03.2019, the petitioner sent a communication stating that they are willing to settle the account as per the settlement offer for Rs.2,75,00,000/- and also willing to pay the upfront amount of Rs.68,75,000/-. However, the request made by the petitioner was declined by the respondent - Bank stating that due to the non-payment of even the agreed upfront amount for compromise, the request made by the petitioner cannot be considered.

Further, the respondent - Bank made it clear that fresh compromise proposal would be considered by the Bank if the petitioner submit their request in writing along with the upfront amount of 25% of the compromise offer to convey their earnestness in pursuing the compromise. They also made it clear that mere sending of e-mails without paying any upfront amount and without written commitment from the Borrower Company will not serve any purpose.

5.Thereafter, by letter dated 19.03.2019, the petitioner again re-iterated their stand by stating that they are willing for One Time Settlement for a sum of Rs.2,75,00,000/-. By their letter dated 21.03.2019, the respondent - Bank rejected the request made by the petitioner and stated that the Bank cannot settle for compromise for any amount less than Rs.2.85 crores, subject to initial upfront payment of 25% of the compromise offer. The matter standing thus, the petitioner has filed the above Writ Petition. 6.It is settled position that the Bank cannot be compelled to agree for a One Time Settlement proposal. It is only the petitioner who has to negotiate with the

respondent - Bank and arrive at a compromise. From the materials available on record, it is clear that though the petitioner was given sufficient opportunity to settle the matter, they failed to utilize the same. In these circumstances, we are not inclined to entertain the Writ Petition. Accordingly, the Writ Petition is dismissed. No costs. Consequently, the connected miscellaneous petition is closed.

Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrar va To The Authorized Officer, The State Bank of India, Stressed Assets Recovery Branch, Red Cross Building, II Floor, No.32, Montieth Road, Egmore, Chennai - 600 008.

+1cc to Mr.Y.Prakash , Advocate SR.No. 55920 +1cc to Mr.K.Chandrasekaran , Advocate SR.No. 55367 W.P.No.9768 of 2019 and W.M.P.No.10363 of 2019 A.SK(07/08/2019)