IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.13296 of 2011 1. Shafique Ahmad son of Md. Safir Ahmad, Resident of Abgilla, P.O. Buniyadganj, P.S. Mufassil, Town and District-Gaya. Proprietor of M/s Royal Shoe a Proprietorship firm having its place of business at Abgilla, P.O. Buniyadganj, P.S. Mufassil, Town and District-Gaya. 2. Nahid Nasreen wife of Shafique Ahmad, Resident of Abgilla, P.O. Buniyadganj, P.S. Mufassil, Town and District-Gaya. …….Petitioners. Versus 1. The State Bank of India, a Banking Company constituted under the State Bank of India Act, 1955 having its Corporate Office at State Bank Bhawan, Madame Cama Road, Mumbai-400021 through its Chairman-cum-Managing. 2. The Branch Manager, State Bank of India, Manpur, Gaya. 3. The Authorised Officer, State Bank of India, Manpur, Gaya. ..…..Respondents. ----------- For the petitioners : Mr. Gautam Kejriwal, Advocate. For the respondents : Mr. Kaushalendra Kumar Sinha, Advocate. ---------- O R D E R 04/ _14.11.2011 1. This writ petition has been filed by the petitioners for the following reliefs:- (i) For issuance of a writ in the nature of mandamus directing the respondents to accept the proposal of petitioner no.1 for settlement of Cash Credit Loan Account of its business firm namely M/s New Royal Shoe, Gaya in terms of the SBI OTS SME, 2010 scheme (hereinafter referred to as the „OTS Scheme‟) which proposal is lying pending with the respondents since long without any response; (ii) For issuance of a writ in the nature of mandamus directing the respondents to allow the petitioner to liquidate the dues of aforesaid account in terms of the aforesaid OTS Scheme which is itself perfectly applicable in the case and the proposal in connection whereof along with 10% of the upfront/pre-deposit has - 2 - already been submitted with the respondents well within the prescribed time and manner as provided under the OTS Scheme; (iii) For issuance of a writ in the nature of mandamus directing the respondents not to take any action of coercive recovery of the outstanding dues relating to the Cash Credit Loan Account of petitioner no.1 under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the „SARFAESI ACT‟ ) in view of the petitioner‟s case being fully covered by the aforesaid OTS Scheme and also that the petitioner having already applied with the requirements thereof with bonafide intention of liquidating the dues of respondent; (iv) For grant of any other relief(s) to which the petitioner is found entitled to in the facts and circumstances of the present case. 2. Learned counsel for the petitioners stated that petitioner no.1 is the proprietor of the business firm namely M/s New Royal Shoe dealing in retail trade of foot wears, whereas petitioner no.2 is the guarantor of the cash credit loan account of petitioner no.1 which was granted by the respondent-Bank in the year 2004 and which was availed by petitioner no.1 to the tune of Rs.7,00,000/- against securities, including equitable mortgage of residential house of petitioner no.2. 3. It was also stated by learned counsel for the petitioners that in the year 2005 petitioner no.1, who was the principal man to handle the affairs of the firm, fell seriously ill and in the year 2006 met with a severe accident which forced him to stay bed ridden for more than six months due to which the entire trade activity of the firm came to stand still and finally petitioner no.1 lost his business completely, but till the year 2006 petitioner no.1 somehow managed to make payments to the respondent-Bank in different spells against his aforesaid loan account, - 3 - but thereafter he lost his capacity to make any further payment and intimated the Bank about his adversities and requested to set out a convenient method for petitioner no.1 to discharge his liability against the aforesaid cash credit loan account, but the respondent-Bank never entertained the request of petitioner no.1. 4. It was also claimed by learned counsel for the petitioners that in the year 2010 petitioner no.1 received an undated letter (Annexure- 2) from the Bank intimating him about the One Time Settlement Scheme, 2010 circulated by the Bank vide letter dated 05.03.2010 (Annexure-1) fixing 31.05.2010 as the last date for filing application and 30.06.2010 as the last date for final payment. However, by subsequent letter/circular the last date for receipt of application and for processing application was extended and the petitioner filed his application with his proposal for One Time Settlement Scheme within the extended time, i.e. 10.06.2010 (Annexure-3) along with 10% earnest money as required in the Bank letter. 5. Learned counsel for the petitioners also submitted that the proposal sent by petitioner no.1 was neither processed by the authorities as required under the Scheme nor any communication regarding acceptance or rejection of petitioner‟s proposal was sent by the authorities of the Bank, although steps to be taken by the sanctioning authority in that regard had been specifically provided in paragraph-3 of the OTS Scheme, 2010 which was offered by the Bank to petitioner no.1. The said steps are as follows:- “3.1. As the Scheme is non-discretionary and non- discriminatory, in all cases where the proposal is strictly in accordance with the guidelines of SBI OTS – - 4 - SME, 2010, the concerned Branch Managers/ Head of Processing Cells like SARC, SMECCC, etc. can themselves sanction the OTS in respect of branches linked to them, without going through the Screening Committee process. 3.2. In all such cases, it should be clearly mentioned in the proposal itself that the compromise amount has been arrived at strictly as per SBI OTS-SME, 2010. The proposals should be made available for scrutiny by the Inspecting Officials, if required. 3.3. In the event of the loan having been sanctioned by the official, now in position to sanction the OTS, the decision on the compromise settlement in such cases should be taken by the next higher authority. 3.4. All compromises sanctioned under the proposed OTS Scheme will be required to be promptly reported for control to the controlling authority who shall scrutinize such reports immediately. The control returns would need to be submitted account-wise.” 6. Learned counsel for the petitioners also claimed that in spite of the aforesaid facts, petitioner no.1 did all what was required by him and even deposited Rs.1,00,000.00 in the said account on 31.03.2011 (Annexure-5). However, petitioner no.1 was surprised to receive a letter dated 15.07.2011 (Annexure-6) from the Bank asking petitioner no.1 to settle the matter in the Lok Adalat on payment of Rs.10,06,780.41. The details of the account given in the said letter are as follows:- Total Rs. 8, 12, 101.41 Already paid by petitioner no.1 Rs.1, 80, 000.00 Balance Rs.6, 32,101.41 Interest Rs.2, 99,732.00 Recovery Agent Rs.0, 63,000.00 Auction fee Rs.0, 11, 947.00 Total Rs.10, 06,780.41 - 5 - 7. Learned counsel for the petitioners stated that in response to the said letter of the Bank, petitioner no.1 sent his reply dated 17.07.2011 (Annexure-7) stating that his offer for One Time Settlement Scheme having been accepted by the Bank, there was no occasion for such a demand although the fault was totally of the Bank which neither processed the application of petitioner no.1 nor sent any intimation to him in that regard. However, he specifically stated that if the Bank was ready to give a rebate of 15% to the actual amount he was ready to immediately pay Rs.5, 10, 286.00 for settlement of his loan account. However, when the said letter of petitioner no.1 remained unheeded and un-replied he filed the instant writ petition in this Court on 12.08.2011. 8. Learned counsel for the petitioners argued that petitioner no.1 was throughout ready and willing to abide by the terms and conditions of the OTS Scheme, 2010 for which he had made his proposal within the extended time prescribed along with 10% of the loan amount, but it was the fault of authorities of the Bank who did not make any response nor even processed his application as required under the Scheme, hence, the respondent-Bank was not justified in raising the claim as made by the authorities vide letter dated 15.07.2011. In this regard, he relied upon a decision of this Court dated 07.07.2011 passed in CWJC no.6079 of 2011 in which the respondent-State Bank of India was also a party represented by its counsel. 9. On the other hand, learned counsel for the respondents- Bank vehemently opposed the contentions of learned counsel for the petitioners and submitted that the proposal of petitioner no.1 dated - 6 - 10.06.2010 (Annexure-3) submitted along with earnest money of Rs.80,000.00 was accepted by the authority of the Bank on the same date as would be clear from the entry on the left side of the letter itself, hence there was no need for any other intimation as petitioner no.1 very well knew about the said acceptance and deposited Rs.1,00,000.00 on 31.03.2011 and the same was admitted by petitioner no.1 in his letter dated 17.07.2011 (Annexure-7). 10. Learned counsel for the respondents also submitted that petitioner no.1 did not pay the remaining amount as per the OTS Scheme, but inspite of the said fact a second opportunity was given to petitioner no.1 by the Bank vide letter dated 15.07.2011 (Annexure-6) after deducting Rs.1,80,000.00 which had already been deposited by petitioner no.1, hence the concessions demanded by petitioner no.1 vide his letter dated 17.07.2011 after expiry of the period of OTS Scheme of 2010 on 31.03.2011 cannot be legally granted to him. Hence, he submitted that no relief as claimed by the petitioners in this writ petition can be granted to them. 11. After hearing learned counsel for the parties and after perusing the materials on record it is quite apparent that the letter (Annexure-2) sent by the Bank to petitioner no.1 with respect to OTS Scheme, 2010 dated 05.03.2010 (Annexure-1) was an invitation for offer and within the prescribed time petitioner no.1 sent his offer/proposal along with requisite money within time. Hence, the authorities of the respondent-Bank were duty bound to inform the petitioners about the acceptance of the offer and amount so settled by the Bank, but although a - 7 - period of more than eight months lapsed and even the date fixed in the Scheme and the letter of the Bank expired, no such information was sent/given by the respondents-authorities of the Bank to petitioner no.1. 12. So far noting on the left side of petitioner‟s letter dated 10.06.2010 (Annexure-3) is concerned, it is quite apparent that after receiving the said letter the receiving authority had signed after writing the words “Accept OTS, 2010 letter”. This clearly shows that the word “Accept” used in the said sentence was only with respect to the letter of petitioner no.1 and it cannot be legally assumed to be acceptance of the offer made in the said letter, especially when for accepting an offer the sanctioning authority had to process the application and follow certain steps as prescribed in the Scheme and only thereafter the offer had to be accepted. Admittedly, no such steps had been taken by the authorities of the respondent-Bank nor any intimation with respect thereto had been sent by the authorities of the Bank to petitioner no.1 although they were legally required to do so. 13. Neither the respondent bank or its authorities had made any statement nor had produced any material before this court to show that petitioner‟s proposal had ever been processed by them or that they had ever sent any intimation to petitioner no.1 with respect thereto within the period prescribed in the Scheme in question, namely OTS Scheme 2010 of the Bank. Hence, the authorities of the respondent-Bank cannot be legally allowed to take benefit of their own wrong nor they can be allowed to squeeze out the blood of the loanee, although they are entitled only to a pound of flesh as required in the Scheme which petitioner no.1 - 8 - is ready to pay. 14. In the aforesaid facts and circumstances, this writ petition is allowed and the authorities of the respondent-Bank are directed to accept the petitioners‟ proposal for settlement of the cash credit loan account in the respondent-Bank in terms of OTS Scheme, 2010 after processing the proposal/offer of the petitioners within two months from the date of receipt/production of a copy of this order and fixing the settled amount as per the OTS Scheme, 2010 deeming it to continue for the purposes of this case and inform the petitioners about the same within the said period directing/allowing him to pay the amount so settled within six months thereafter. 15. Since the claim of the petitioners and the respondent- Bank is fully under the OTS Scheme, 2010, which is extended for the purposes of this case, the authorities of the respondent-Bank shall not take any coercive action for recovery of the outstanding dues relating to the cash credit loan account under the provisions of the Act till the date of payment by the petitioners which is going to be fixed by the authorities of the respondent-Bank in the light of the aforesaid directions. Sunil (S. N. Hussain, J.)