- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.4627/2009 Eravant Gangaram Sadanand, age 55 yrs., occu.service as Managing Director of Sangameshwar Foods and Fats Ltd., situated at S.No.28, Gurujawala Tq.Dharmabad Dist.Nanded. ...Petitioner.. Versus 1. The Peoples Cooperative Bank Ltd., Hingoli, Branch at Vazirabad (A Multi State Bank), Nanded. Through its Manager. 2. Shri S.G. Yambal, age 43 yrs., occu.service, as Recovery Officer, People Cooperative Bank Ltd., Hingoli, Branch at Vazirabad, Nanded. Dist.Nanded. 3. The Osmanabad Janta Cooperative Bank Ltd., Osmanabad. Through its Managing Director. ...Respondents... ..... Shri N.P. Patil Jamalpurkar , Advocate for petitioner. Shri S.S. Agrawal , Advocate for respondent nos.1 & 2. Shri A.N. Irpatgire, Advocate for respondent no.3. ..... CORAM: P.V. HARDAS & A.V. POTDAR, JJ. DATE: 10.08.2009 PER COURT: - 2 - 1] Heard learned counsel for the parties. 2] This is a petition under Article 226 of the Constitution of India by which the petitioner has prayed for issuance of a writ directing respondent nos.1 & 3 – banks to settle the NPA account of the petitioner under “One Time Settlement Scheme” and also prays to direct respondent no.1 – bank to settle NOA account of the petitioner as per the terms of settlement arrived at between respondent nos.1 & 3 – banks and the petitioner in the meeting dated 3.2.2009 communicated as per letter dated 20.1.2009. 3] The petitioner by virtue of the amendment, which is sought for by the petitioner to the petition, has prayed for issuance of a writ for quashing and setting aside the notice of proclamation dated 10.7.2009 issued by respondent no.1-bank u/ss.8 & 9 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2005. 4] Undisputedly, the petitioner is a borrower of respondent nos.1 and 3 – banks. Since the petitioner was a defaulter, proceedings were initiated u/s 101 of the Maharashtra Cooperative Societies Act. Since the respondent no.1 – bank was a multi-State cooperative bank, certain dispute came to be referred to the Arbitral Tribunal also. The petitioner submitted an application seeking one time settlement of his outstanding amount and according to the petitioner, since the bank did not take any decision thereon, the petitioner filed a writ petition in this Court. This Court, by its order dated 14.11.2008, disposed of the said writ petition by directing the respondent – bank to consider the application of the petitioner for one time settlement scheme in accordance with law on its own merit. As pointed out to us, the request of the petitioner for one time settlement has been turned down by the respondents. In the mean time, the respondents have also resorted to the - 3 - remedy under the Securitization Act of recovering the outstanding amount from the petitioner and accordingly the possession of the secured properties came to be obtained by the respondents on 29.11.2008. Pursuant thereto, the proclamation notice came to be issued, which is subject matter of challenge in the present petition. 5] In the conspectus of the present facts, Shri N.P. Patil (Jamalpurkar) has urged before us that the respondent nos.1 & 3 are cooperative banks and, therefore, the provisions of the Securitization Act are not applicable to the cooperative banks. Next, it is urged by the learned counsel for the petitioner that the respondents ought to have, pursuant to the Government resolution, applied the provisions of one time settlement scheme uniformly to all its borrowers and ought to have settled the outstanding dues of the petitioner under the one time settlement scheme. The petitioner, therefore, has also prayed for quashing of the proclamation notice, as according to the petitioner, the respondent nos.1 & 3 – banks could not have availed the various remedies under the law. 6] The learned counsel for the respondents have urged before us that prior to passing of the order by this Court dated 14.11.2008, the respondents have turned down the application of the petitioner for one time settlement. It is urged before us that there is no prohibition in law in respect of the respondents for resorting to the remedies available u/s 101 of the Maharashtra Cooperative Societies Act or the Arbitral Tribunal or the provisions of the Securitization Act. It is further urged by the respondents that the petitioner has alternative remedies available in law for challenging the orders passed under the Securitization Act. 7] At the outset, it may be stated that the provisions of the Securitization Act have been held applicable to the cooperative banks and this issue is no longer res integra in the light of judgment of Division Bench of - 4 - this Court in Nashik Merchants’ Cooperative Bank Ltd., Nashik V/s Aditya Hotels Pvt.Ltd., Pune [ 2009 (4) Maharashtra Law Journal, 183 ]. The Division Bench, by placing reliance on the earlier judgment of Division Bench of this Court in M/s Khaja Industries V/s State of Maharashtra [ 2007 (6) Maharashtra Law Journal, 712 ], has held that the provisions of the Securitization Act are applicable to the cooperative banks. 8] In respect of one time settlement scheme, according to us, it is not a matter of right for a borrower to insist that the bank should arrive at a one time settlement of the dues. However, the bank, while rejecting the said request, is expected to treat all the borrowers similarly and not resort to discrimination. In the present case, the respondents have stated that they have not adopted one time settlement scheme and consequently the petitioner does not have any right, much less a legally enforceable right. The petitioner, no doubt, in his petition and in the rejoinder, has stated that the scheme has been made applicable to the respondent – banks and they had settled several NPA accounts of the borrowers, but has not given any details, much less the names of the so called borrowers. We have no hesitation in accepting the statement of respondent nos.1 & 3 that the one time settlement scheme has not been adopted by the bank. If that be the case, the petitioner has absolutely no right, much less a legally enforceable right, for praying to issue a writ of mandamus directing the respondents to settle the NPA account of the petitioner under the one time settlement scheme. The reference in this behalf may usefully be made to the Division Bench judgment of Punjab and Haryana High Court in Knittex Oversees Pvt.Ltd. V/s State Bank of Patiala & others [ AIR 2008 Punjab & Haryana, 59 ]. The Division Bench of Punjab and Haryana High Court has held that one time settlement scheme issued by the Reserve Bank of India has no statutory force and such scheme does not confer any statutory right on the borrowers to seek their enforcement by issuance of a writ of mandamus. It is also stated that it does not create a corresponding legal duty on the financial institutions. In the light of that, therefore, - 5 - there is no merit in the contention of the petitioner that the NPA account of the petitioner ought to have been settled by the respondent – banks under the one time settlement scheme. 9] Insofar as this petition relates to the challenge to the proclamation issued by the respondents, according to us, the petitioner has alternative efficacious remedy available in law for challenging the proceedings under the Securitization Act. 10] In the light of that, therefore, we do not see any merit in the petition and the petition is, therefore, summarily dismissed with no order as to costs. (A.V. Potdar, J.) (P.V. Hardas, J.) ndk/c108094