Thakur Steel Tubes Ltd., New Delhi and others vs State Bank of India, Chandigarh

Ashok Bhan, J.—This petition has been filed under Art. 226/227 of the Constitution of India, for issuance of a writ of certiorari quashing Annexure P 19 an inter departmental communication dt/-18-6-1996, and for issuance of a writ of mandamus directing the State Bank of India (hereinafter referred to as the Bank) to accept the compromise amount offered by the petitioners which had been approved by the officers of the Bank and the Committee constituted by the Bank for rehabilitation of the sick units.

The three petitioners are sister concerns and had taken loans by way of advance from the Bank. Admitted facts are that petitioner No. 1 M/s. Thakur Steel Tubes Ltd. availed a loan of Rs. 40 lacs from the respondent-Bank against facility of cash credit hypothecation on 27-10-1980 with interest at the rate of 19% per annum on daily balance with quarterly rests. As the petitioner did not adhere to the financial discipline, the petitioner defaulted in the repayment of the loan amount. Ultimately respondent Bank filed a Civil Suit No. 525 of 1985 on 1-8-1985 against the petitioner and the same was decreed for Rs. 49,47,462/- along with pendente lite and future interest at the rate of 19% per annum and the quarterly rests as per decree dt/-30-4-1993. According to the respondent-Bank, the amount due as on 31-8-1996 comes to Rs. 3,73 crores. Petitioner No. 2 M/s. Om Steel Tubes Limited had availed a loan of Rs. 13,00,000/-on 26-8-1982 from the respondent Bank by way of cash credit hypothecation along with 19% interest. As petitioner No. 2 defaulted in the repayment of the loan amount to the respondent-Bank, it filed a civil suit for the recovery of the amount due from petitioner No. 2 on 13-8-1985 being civil suit No. 568. The same was decreed on 20-12-1993 for Rs. 17,50,944/- along with pendente lite and future interest as agreed at the rate of 19% per annum on daily balance with quarterly rests. Similarly H. R. Gupta Industries petitioner No. 3 which is a partnership firm had also obtained from the respondent Bank a loan of Rs. 18,00,000/- on 16-2-1981 by way of cash credit hypothecation facility with interest at the rate of 15.10% per annum on daily balance with quarterly rests. As petitioner No. 3 defaulted in the repayment of the same, respondent-Bank filed a civil suit for recovery on 3-8-1985. The same was decreed for recovery of Rs. 29,11,049/- along with pendente lite and future interest at the rate of Rs. 15.10% per annum on 4-3-1994. According to the respondent, the total amount recoverable from the three petitioners conies to Rs. 5 crores approximately.

Petitioners have averred that they approached the Rehabilitation Cell of the respondent Bank on 11-12-1993 forwarding therewith a proposal for repayment of the dues of the captioned units. Respondent Bank vide their letter dt. 28-2-1994 advised the petitioners that their compromise offer of Rs. 18 Sacs and Rs. 35 lacs against the present outstanding (without accrued interest from the date of filing of the civil suit) of Rs. 30.56 lacs and Rs. 52.22 lacs in the case of M/s. H. R. Gupta Industries and M/s. Thakur Steel Tubes Limited respectively is low. Petitioners were informed that if they are ready to offer the enhanced amount, they may visit the office of the Bank with prior appointment for further discussion. It was clarified that the case of M/s. Om Steel Tubes Limited could not be considered in isolation. This letter had been written by the Bank without prejudice to its rights in respect of civil suits filed and decrees obtained against the three petitioner units. After discussions with the Bank, petitioners wrote a letter Annexure P7 to the Assistant General Manager of the respondent-Bank that the three petitioner units shall pay an amount of Rs. 1.10 crores in complete settlement of the outstanding and accrued interest in respect of the above accounts. In response to letter Annexure P7, Assistant General Manager of the respondent-Bank wrote letter Annexure P8 that the compromise proposal has been submitted to the higher authorities and in the meantime, petitioners were asked to continue to deposit the substantial amount for adjustment of the above accounts. Correspondence continued between the petitioners and the respondent Bank and during this period petitioners deposited a sum of Rs. 63 lacs with the respondent Bank. Petitioners received communication Annexure P 13 from the Assistant General Manager of the respondent Bank stating therein that the proposal sent by the petitioners did not find favour with the higher authorities as the compromise amount offered by the petitioners was found to be on a very lower side. Petitioners were advised to enhance the offer to a reasonable level so that their proposal again be put up to the higher authorities. Meanwhile, petitioners were requested to repay the Bank''s entire dues quickly. In response to this communication petitioners wrote a letter Annexure P 14 dt/-11-3-1996 increasing the compromise proposal from Rs. 1.10 crores to Rs. 1.15 crores. The offer made by the petitioners increasing the compromise amount by Rs. 5 lacs i.e. from Rs. 1.10 crores to Rs. 1.15 crores towards settlement of the entire amount was rejected vide communication dt/-11-6-1996 Annexure P 17, Thereafter, the impugned letter Annexure P 19 dt/- L8-6-1996 written by the Assistant Genera! Manager that the entire amount along with interest be recovered from the petitioners by executing sale of their assets instead of accepting the compromise amount offered by the petitioners which was very low.

Petitioners have impugned the communication Annexure P 19 on the ground that the respondent-Bank is not justified after having once mooted the proposal for a compromise on the basis of which petitioners deposited an amount of Rs. 63 lacs to reject the proposal out rightly on the ground that the offer of the petitioners is on the lower side; that petitioners had shown their bona fide, willingness and sincerity to enter into the settlement with the Bank by depositing an amount of Rs. 63 lacs after rendering of the proposal.

This petition is liable to be dismissed on the short ground that the writ petition is not maintainable against an inter se communication between Zonal Office and the Branch of the respondent-Bank to proceed to execute the decrees passed in favour of the respondents by the Civil Courts for recovery of moneys advanced as loans to the petitioners. This inter departmental communication was not an order passed against the petitioners which can be challenged by filing a writ petition.

Approximately Rs.5 crores are to be recovered by the Bank and it was not bound to accept a compromise offer of Rs. 1.15 crores on the terms of the borrower petitioners. As the proposal of the petitioners was very much on the lower side respondent Bank did not accept the offer made by the petitioners.

Compromise proposal given by the petitioners was never accepted by the respondent-Bank, In its communication dt/- 31-7-1995 Annexure P8 respondent-Bank had clearly stated that it appreciates the concern of the petitioners for stalling their accounts and that their compromise proposal had been forwarded to the higher authorities which was under their consideration but nowhere it had committed by which it could be said that the proposal made by the petitioners was accepted/acceptable to the Bank. Mere deposit of Rs. 63 lacs towards the amount due during the period the negotiations were going on between the parties would in no way create an estoppel against the Bank to reject the proposal of the petitioners and to proceed to execute the decrees obtained by it from the Courts of competent jurisdiction and which had become final.

For the reasons stated above, we find no merit in this petition and dismiss the same with no order as to costs.

Petition dismissed.