M/s AMICO Textiles vs Allahabad Bank

Petitioner-firm is a manufacturing unit established in the year 2010 in the name and style of M/s AMICO Textiles, for manufacturing of yarn. For

the purpose of setting up the unit, a term loan of ​ 19.55 crores was sanctioned. Subsequently, the petitioner-firm was allowed to change the nature

of its project and it was changed from manufacturing of yarn to Polyester Staple Fiber manufacturing. Earlier sanctioned loan was cancelled and

fresh term loan was sanctioned for setting up a new plant. Said sanction was given under technology upgradation fund scheme (hereinafter referred

to as ''TUF'') of the Ministry of Textiles. As per case of the petitioner, the bank was supposed to send sanction letter and the other documents to

the Ministry of Textiles for disbursement of subsidy for the project. A fresh working capital was sanctioned to the petitioner-company of ​6.20

crores with one time bank guarantee of ​0.27 crores vide letter dated 10.06.2011. The Assistant General Manager of the Bank sent a letter to the

TUF Cell of the bank for condonation of delay with regard to subsidy claim papers of the loan amount. Thereafter, some clarification was sought

from the bank. Subsequently, more loan amount was sanctioned under TUF for installation of additional machineries and buildings. Approval for

renewal of credit facilities was upto 30.06.2015 as there was delay in disbursement of the loan. There was delay in payment of installment from

December, 2014 to September, 2015. Petitioner-firm requested respondentbank for temporarily overdrawing ​1.00 crore for smooth functioning of

the firm. There were many communications between the petitioner-firm and the respondent-bank. As per case of the petitioner, there was delay on

the part of the respondent-bank in filing of TUF documents and because of that reason, the TUF claim is still pending.

When nothing was done, the petitioner-firm approached this Court for issuance of direction to respondent-bank to take necessary steps to

adjust the TUF subsidy claim of the petitioner, which has been delayed because of the fault of the respondent-bank and to restructure the account

of the petitioner-firm. A prayer has also been made for direction to respondentbank to upgrade the account of the petitioner-firm from NPA

category to standard category and to permit the petitioner-firm to operate its account till the pendency of this petition before this Court subject to

outcome of the petition.

In response to notice of motion, reply has been filed by respondent-bank.

Learned counsel appearing for respondent-bank submits that the petitioner is having alternative efficacious remedy to approach DRT under the

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ''SARFAESI

Act''). The petitioner-firm has been declared NPA w.e.f. 31.12.2016 as loan amount has not been repaid, whereas there is huge liability of

approximately ​31.58 crores with interest upto 31.12.2016.

Learned counsel for the respondent also submits that an action has been initiated against the petitioner-firm under SARFAESI Act and notice

under Section 13(2) has already been issued. He further submits that petitioner-firm is a defaulter and non-cooperative borrower. From the very

beginning the delay has occurred even in implantation of the project. In spite of asking time and again, the required documents were not supplied to

the respondent-bank. The claim of the petitioner was rejected earlier in the year 2011 and no such objection was raised as the petitioner firm did

not approach any Court regarding this issue. The loan of the petitioner under TUF was subject to certain terms and conditions as it was a project

of Ministry of Textiles, Government of India and IDBI. An appeal is also pending before Ministry of Textile.

Heard arguments of learned counsel for the parties and have also perused the relevant documents available on the file as well as certain

documents supplied during course of the arguments.

On perusal of all documents, it is an admitted fact that loan has been obtained by the petitioner-firm and the request of the petitioner is only to

adjust the amount of subsidy towards loan amount by respondent-bank. The request has not been accepted, whereas verbal assurance was given

by respondent-bank that amount of subsidy will be adjusted towards loan amount. Petitioner is claiming that delay was on the part of

respondentbank, whereas as per stand of respondent-bank the documents were not supplied to the bank by the petitioner-firm and, therefore, its

claim could not be considered. It is also not disputed that no order of rejection of the claim of the petitioner has been passed but many

communications are there between the petitioner-firm and the respondent-bank.

In a writ petition, disputed questions of fact cannot be decided as it is a matter of evidence as to whether the delay is on the part of the petitioner

or on the part of respondent-bank. It has been stated by learned counsel for the petitioner that oral assurance was given by respondent-bank to

adjust the subsidy to its loan amount. Learned counsel for respondentbank has denied that any representation was submitted by the petitioner and

has even denied that the required documents were supplied to forensic audit team. The petitioner-firm is aggrieved by the action of the respondent-

bank that an application was submitted to the respondent-bank much earlier but no action has been taken so far and an oral assurance was given

to adjust the amount of subsidy, whereas it is denied by respondent-bank.

On perusal of the documents supplied during arguments, it appears that many communications are there between parties. Without going into the

controversy and mentioning any expression on merits of the present case and to draw a conclusion as to who was instrument in causing delay, it

would be in the interest of justice that the issue pending between both the parties cannot be decided on merits in the writ petition being disputed.

However, a liberty is given to the petitioner to submit a detailed application to the respondent-bank mentioning therein the facts of the case with all

relevant documents within a period of one week from the date of receipt of certified copy of this order. In case such application/ representation is

submitted by the petitioner-firm to respondent-bank within said period, the respondent-bank is directed to consider the claim of the petitioner in

accordance with terms and conditions applicable to the case of the petitioner and also in accordance with law as applicable. The respondent-bank

shall decide petitioner''s claim for subsidy independently without being influenced by the earlier communication, if any, and pass an appropriate

order as may deem fit and proper in accordance with provisions of the scheme, without considering the factum of delay or non-supply of the

documents. In case the presence of any representative of the petitioner firm is required, he may be called by sending notice in writing. The

necessary exercise be done within a period of two weeks after receipt of representation/application of the petitioner.

It is also clarified that the Court has not expressed any opinion on the merits of the case and has also not entered into any issue as to whether

the documents were supplied by the petitioner-firm or objections were removed or not. The claim of the petitioner be decided without being

influenced with the earlier orders or communications but strictly in view of provisions of the scheme and by applying the mind independently. A

detailed speaking order be passed. In case the petitioner is aggrieved by that order in any manner, the petitioner-firm is at liberty to challenge the

same before the appropriate authority.

Disposed of