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Judgment
Arindam Sinha, J
Mr. Ray, learned advocate appears on behalf of petitioner and submits, Oriental Bank of Commerce, presently Punjab National Bank extended credit facility to his client. By impugned letter dated 31st March, 2014 the bank had noticed his client regarding declaring it as wilful defaulter. His client earlier moved this Court and obtained order for consideration of its representation. The bank did not consider. Meantime, there was insolvency proceeding initiated against his client, which led to appointment of Resolution Professional (RP) and declaration of moratorium. In the circumstances, his client was protected against recovery demands from the bank
He submits, a resolution plan was approved by the National Company Law Tribunal (NCLT) and appeal preferred therefrom, resulted in some variation. There was confirmation of acceptance of the resolution plan. The bank was a member of the committee of creditors, constituted under section 21 in Insolvency and Bankruptcy Code, 2016. The plan is being executed and his client is repaying in accordance therewith. In the circumstances, ingredients of the notice stands removed. Hence, the notice should be set aside and quashed.
Mr. Rao, learned advocate appears on behalf of the bank (opposite party no.4). He refers to paragraphs 4 to 8 of his client’s preliminary counter to submit, in approval of the resolution plan there was no stipulation regarding deletion of petitioner’s name from list of wilful defaulters. Petitioner had not challenged the order declaring petitioner as wilful defaulter.
Materials on record do not disclose order declaring petitioner to a wilful defaulter. As aforesaid impugned notice dated 31st March, 2014 is a notice for declaring the account as wilful defaulter. On query from Court Mr. Ray submits, no order declaring the account as wilful defaulter was served. However, the bank has given information to Reserve Bank of India that the account has been declared as wilful defaulter. Mr. Rao disputes information has been given by his client to Reserve Bank of India regarding the order declaring the account as wilful defaulter.
Impugned is a notice to respond on why the account should not be declared wilful defaulter. It is undisputed that the bank was member of the committee of creditors, which participated in making and approval of the resolution plan for revival of petitioner. It is also undisputed that under the plan there has been repayment as per schedule. These circumstances mitigate against the account being declared wilful defaulter, simply because where there is repayment it cannot be said there is wilful default. Mere so, when the repayment is in terms of a plan put in place by operation of law.
The bank, if it has already issued order declaring petitioner’s account as wilful defaulter, will either reconsider its position or communicate the same to petitioner, upon receipt of which the petitioner may seek remedy. In event no order has been issued except impugned notice, the bank will allow petitioner to make representation to it, to highlight aforesaid circumstances, the bank is already aware of, to proceed and decide on the issue. Either way there must be action taken on above applicable directions, within four weeks of communication.
With above directions the writ petition is disposed of.
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