Arun Kumar M vs Reserve Bank Of India

Krishna S.Dixit, J

Petitioner a guarantor of the loan has presented this writ petition with the following prayer:

i) Quash/set aside the proceeding initiating by the r-2 under the provisions of SARFAESI Act, as per anx-l dated 26.12.2019 and consequently set aside the e-auction notification fixing the date of sale property on 25.02.2020 and further order directing the r-2 not to take actions under the provisions of SARFAESI Act unless and until it exhausts its remedies against the r-3 being the principle borrower.

ii) direct the r-1 to issue the circular stating that the enforcement of rights of the secured creditor against the residential properties shall be the last resort of the secured creditor after exhausting the remedies for the recovery of the dues in other modes, under the provisions of SARFAESI Act.

iii) Declare that the actions initiated by the r-2 against the petitioner/surety under the SARFAESI Act and against the r-3 borrower company simultaneously is void and enforceable as it is contrary to sec. 141 of the contract act.

After service of notice, respondents have entered appearance through their Panel Counsel and oppose the writ petition making submission in justification of the ongoing coercive proceedings of recovery; learned Sr.Adv. Mr.Naik appearing for the respondent-RBI vehemently contends that the 2nd prayer of the petitioner essentially involves a policy matter in which a host of factors figure and therefore a writ court cannot grant it.

At this stage learned Sr.Adv. Mr. Jayakumar S.Patil submits that shorn off bulky pleadings, contentions and the prayers, his client would be satisfied if he is permitted to make an application to the respondent - lender Bank seeking One Time Settlement and such a proposal is directed to be considered in a time bound way and further that till such consideration takes place, no precipitatory or coercive action is taken against the petitioner; he also undertakes to deposit a reasonable sum towards the expenditure that may be incurred by the bank for deferring the scheduled auction sale.

The learned Panel Counsel for the lender bank vehemently opposes even argument of OTS proposal contending that huge money has remained overdue and now the proceedings are taking shape in terms of IBC before the NCLT and that the petitioner being only a guarantor of the loan availed by the corporate-debtor is not entitled to any relief at the hands of writ court.

Having heard the learned counsel for the parties and having perused the petition papers, this court is inclined to grant a limited & conditional reprieve to the petitioner as under inasmuch as the prayers in the writ petition have been given up and that a very innocuous prayer as to availing OTS facility in terms of extant RBI guidelines is made; petitioner undertakes to incur the expenditure which the lender bank would incur for rescheduling of the auction; no prejudice will be caused to the lender bank if it considers petitioner's contemplated OTS proposal in accordance with law and in a time bound manner.

In the above circumstances, the following order is made:

(i) The writ petition is marginally favoured, although scripted prayers are not granted; petitioner is permitted to make an OTS proposal within ten days and the lender bank would consider the same after giving audience to the petitioner or his nominee preferably within a period of two weeks; till such consideration takes place and the result thereof is conveyed to the petitioner, no coercive action would be taken.

(ii) Petitioner shall deposit with the lender bank a sum of Rs.2,00,000/- (Rupees two lakh) only towards the expenditure which the bank is likely to incur for deferring of the scheduled auction and for rescheduling the same.

All contentions are kept open.

No costs.