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Judgment
The petitioner has filed the instant application for the following reliefs:
“For issuance of Writ/Writs, order/orders, direction/directions, commanding the respondent authorities after quashing the letter dated 19.06.2017 issued by the Chief Manager-cum-Authorized Officer, Punjab National Bank, Circle Office, Patna as well as letter dated 30.10.2017 issued by the Chief Manager-cum-Authorized Officer, Punjab National Bank, Circle Office, Patna, whereby and where under 60 days notice dated 19.06.2017 issued Under Section 13 (2) of Securitizations and Reconstruction of Finance Assets and Enforcement of Security Interest Act, 2002, alleging in the said notice for default in payment of installments without providing information or any communication to the petitioner that account has been classifiedas Non Performing Assets (N.P.A.) on 31.03.2017, as per the Reserve Bank of India guidelines as well as respondent authorities have not followed letter in spirit the guidelines issued by the Reserve Bank of India as well as the Government of India has taken a decision and made policy for the students, those who have taken loan for education purposes, were provided benefits to reduce their financial burden, for which several students were subjected harassment and moving court to courts to settle the issue from the Banks/Banking Institutions, provided educational loan.
And further be pleased to pass such order, orders as your Lordships may deem fit the proper in the facts and circumstances of the case."
The brief facts culled out of the Writ petition are that the petitioner is a M.Sc. (Physics) graduate from Science College, Patna University. He obtained an education loan of Rs.10 lakhs from Punjab National Bank, Danapur Cantt., Patna, for pursuing higher studies in the United Kingdom. The loan was sanctioned vide letter dated 17.09.2009 against security of the residential property of the petitioner's mother.
The petitioner, thereafter, pursued his higher studies in the United Kingdom and claims to have repaid approximately Rs.6 lakhs towards the loan. Due to health and other difficulties, he returned to India in December, 2015. His grievance is that the Bank declared his loan account as NPA on 31.03.2017 and thereafter issued notice dated 19.06.2017 under Section 13(2) of the SARFAESI Act, 2002, followed by a letter dated 30.10.2017, without proper service upon him.
The petitioner further claims that he is entitle to the benefit of the applicable Government scheme relating to education loans. He has, accordingly, challenged the aforesaid communications and seeks appropriate directions for the settlement of outstanding loan in accordance with law.
The Learned counsel for the petitioner submits that the impugned action of the Bank is not in accordance with the applicable rules and guidelines, as well as the claim of the petitioner for the benefit of the Government scheme has not been duly considered by the Bank. It is, therefore, submitted that the impugned communications be set aside and the Bank be directed to consider the petitioner's case in accordance with law.
A counter affidavit and supplementary counter affidavit has filed on behalf of the respondent Bank. Learned counsel for the respondents submits that the petitioner's loan account is eligible for settlement under the Special One TIme Settlement Scheme (OTS Scheme) of the Bank. It is submitted that, after extending the permissible concessions under the said Scheme, the OTS amount has been calculated at Rs.7,54,401/-, excluding applicable legal and other charges.
It is further submitted that the petitioner may submit a Written OTS proposal along with 20% of the settlement amount, which shall be considered by the Bank, in accordance with the terms of the Scheme. The remaining amount shall be payable as per terms of the sanctioned OTS, and the benefit of waiver of further interest would be available, subject to compliance with the stipulated conditions.
The Learned counsel for the respondent/Bank further submits that in the event of failure to comply with the terms of the OTS, the Bank would be entitled to proceed in accordance with law, including under the SARFAESI Act. It is also submitted that the Bank has acted strictly in accordance with its applicable circulars and there is no personal bias or mala fide on the part of its officials.
A rejoinder to the counter affidavit has been filed on behalf of the petitioner. The Learned counsel for the petitioner submits that in view of the order passed by a Division Bench of this Court dated 04.11.2022, the petitioner's proposal for settlement was under consideration of the Bank and the Bank had assured the Court that a liberal and sympathetic view would be taken. However, the Bank subsequently issued letters dated 26.12.2022 and 28.12.2022, whereby the earlier OTS offer was not accepted and the amount deposited towards OTS was refunded.
It is further submitted that the Special OTS Scheme for the financial year 2022-23 was operative till 31.03.2023 and was subsequently extended up to 30.06.2023. The petitioner, accordingly, submitted a fresh OTS proposal dated 06.05.2023 for Rs.3,95,608/-, but the same was rejected by the Bank vide letter dated 12.05.2023 without assigning any reason or disclosing the applicable policy.
The Learned counsel for the petitioner submits that, according to the formula contained in Clause 5(B)(4) of the OTS Scheme, the petitioner is required to pay 70% of the NPA outstanding. After giving credit for the amount of Rs.5,57,000/-already deposited by the petitioner, the balance payable comes to Rs.3,95,608/-. The petitioner is ready and willing to pay the said amount.
Therefore, the Learned counsel for the petitioner submits that the rejection of the petitioner's OTS proposal is arbitrary and unsustainable and that the Bank may be directed to reconsider and settle the petitioner's account in accordance with the applicable OTS Scheme and the correct calculation.
A reply to the rejoinder has been filed on behalf of the respondent Bank. The Learned counsel for the respondent Bank submits that the petitioner has no vested or enforceable right to claim settlement of his loan under any particular OTS Scheme, as such schemes are governed by the policy/circular applicable on the relevant date and are subject to the prescribed conditions.
It is further submitted by the Learned counsel for the respondent Bank that the OTS proposal made by the petitioner in the year 2022 was considered by the Bank, but the amount offered was not acceptable under the prevailing policy. However, the petitioner was given an opportunity to enhance the offer, which he did not avail. The subsequent offer of Rs.3,95,608/- was also not in accordance with the applicable OTS policy and was, therefore, not accepted.
The Learned counsel for the respondent Bank submits that the petitioner had earlier also failed to comply with the terms of an OTS and has not thereafter come forward with any concrete proposal for settlement. Even after the Court proceedings in 2026, and despite being informed of the outstanding dues and being called upon to submit a concrete settlement proposal, the petitioner has failed to do so.
It is, therefore, submitted by the Learned counsel for the respondent Bank that the Bank has acted in accordance with its policy and the applicable law and that no mandamus can be issued directing the Bank to accept an OTS proposal. Reliance is placed on the judgment of the Hon'ble Supreme Court in State Bank of India v. Arvinda Electronics Pvt. Ltd. (SCR 2022 Vol. 13 page 1073 wherein it has been held that "(i)
no borrower can, as a matter of right pray for a grant for the benefit of one-time settlement scheme; (ii) No Writ of mandamus can be issued by the High Court in exercise of Article 226 of the Constitution of India, directing the financial institution/bank to positively grant a benefit of OTS to a borrower; (iii) The grant of benefit of OTS Scheme is subject to the eligibility criteria and the guidelines issued from time to time".
The Learned counsel, therefore, prays for dismissal of the Writ petition as being devoid of merits.
Heard the Learned counsel for the petitioner as well as the Learned counsel for the respondents.
Upon consideration of the pleadings and the materials on record, this Court finds that the grievance of the petitioner essentially relates to the measures taken by the respondent-Bank in connection with recovery of the outstanding education loan and the petitioner's claim for settlement under the applicable One-Time Settlement Scheme. The petitioner has also questioned the rejection of his OTS proposals and seeks a direction to the Bank to accept the amount offered by him.
The respondent-Bank, however, has disputed any enforceable right of the petitioner to claim settlement under a particular OTS Scheme and has stated that the proposals submitted by him were considered in accordance with the policy applicable at the relevant time. It is also the specific case of the Bank that the petitioner has an efficacious statutory remedy available against the measures taken under the SARFAESI Act.
In view of the nature of the reliefs sought, this Court is of the considered opinion that the issues raised by the petitioner involve disputed questions concerning the legality of the recovery measures and the applicability of the relevant OTS policy, which are matters capable of being examined by the competent statutory forum. It is pertinent to mention the judgments of the Hon'ble Supreme Court :
In the case of PHR Invent Educational Society v. UCO Bank and Others (Civil Appeal No. 4845 of 2024), their Lordships of the Apex Court have held as follows:
“Ordinarily the High Court would not entertain a petition u/Art. 226 if an effective remedy is available to the aggrieved person…”
Likewise, in the matter of Celir LLP v. Bafna Motors (Mumbai) Pvt. Ltd. and Ors., reported in (2024) 2 SCC 1, their Lordships of the Apex Court have held as follows:-
“97.This Court has time and again, reminded the High Courts that they should not entertain petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person under the provisions of the SARFAESI Act …”
In the case of United Bank of India v. Satyawati Tondon and Ors. reported in (2010) 8 SCC 110, their Lordships of the Apex Court have held as follows:-
“43.… the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions …”
It is further held:-
“… the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.”
The Hon’ble Apex Court, in the aforesaid judgments, has categorically held that the High Courts cannot entertain a Writ petition under Article 226 of the Constitution when an effective alternative remedy is available to the aggrieved person.
This Court also finds that no enforceable right to obtain acceptance of a particular OTS proposal has been demonstrated by the petitioner. The question whether the petitioner satisfies the eligibility conditions of the relevant OTS Scheme and the correctness of the Bank's action in dealing with his proposal are matters which may appropriately be examined by the competent forum in accordance with law.
The petitioners may approach the appropriate forum in accordance with the law laid down by the Hon'ble Supreme Court of India as stated supra.
Accordingly, without expressing any opinion on the merits of the petitioner's claim, this Court declines to exercise its Writ jurisdiction on account of the availability of an efficacious alternative remedy.
The Writ petition is, therefore, dismissed as not maintainable, leaving it open to the petitioner to avail the remedy available to him under law before the appropriate forum. Any such remedy shall be considered in accordance with law and on its own merits.
Interlocutory Application(s), if any, shall stand disposed of.