- 1 - IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR O R D E R Chamunda Synprocess vs. Punjab National (India) Pvt. Ltd. Bank & Ors. S.B.CIVIL WRIT PETITION NO.827/2007 DATE OF ORDER : 14th March,2008 P R E S E N T HON'BLE JUSTICE SHRI GOPAL KRISHAN VYAS Mr.Dinesh Mehta, for the petitioner. Mr.Jagdish Vyas, ] Mr.Kuldeep Mathur,] for the respondents. In this writ petition, the petitioner firm is challenging the notice dated 17/12/2005 (Annex.18) issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, so also the communication dated 5/2/2007 (Annex.26), whereby, the representation of the petitioner was rejected. Before filing the present writ petition, the petitioner approached this Court by filing S.B.Civil Writ Petition No.743/2006 and the said - 2 - writ petition was withdrawn by the petitioner on 5/1/2007 on the ground that the petitioner's representation was pending consideration before the respondent Bank with a direction to decide the same. The order passed in S.B.Civil Writ Petition No.743/2006 reads as under: “The writ petition is accordingly dismissed as withdrawn. The respondent bank is directed to decide the representation dispassionately, objectively and on merits in accordance with law. After the representation decided, it will be open for the petitioner/respondent to proceed further.” In the present case, the petitioner is challenging the rejection of his representation vide communication dated 5/2/2007 so also the notice the notice dated 17/12/2005, which was also under challenge in the earlier writ petition. In pursuance of the above directions of this Court, the petitioner again submitted a representation on 15/1/2007 while annexing its earlier representation dated 31/8/2006 and the copy of the order dated 5/1/2007. The said representation was addressed to the Chairman. The - 3 - grievance of the petitioner in this case is that since the representation was addressed to the Chairman, same should have been decided by him but the Assistant General Manager has decided the representation, which is completely in violation of principles of natural justice. As per the petitioner, the order passed by respondent no.4 is without jurisdiction because the representation was addressed to the Chairman and Chairman being higher authority was under an obligation to have applied its mind. Learned counsel for the petitioner while inviting attention towards the contentions mentioned in the representation that a specific fact was brought to the notice of the respondent Bank that the petitioner firm was not aware of the market conditions at the time of taking loan, therefore, did not insist for lower rate of interest at the time of executing papers but the bank was fully aware of such market conditions and there was availability of low rate of interest for textile units and those textile units are getting such benefit of low rate of interest but at the time of sanction of loan by the Bank to the petitioner firm higher rate of interest was charged. Further it is submitted in the - 4 - representation that dispute is only with regard to considering the case for levy of lower rate of interest and it is also assured that upon doing so, the petitioner firm will clear the entire overdue within three months. The petitioner in his representation also enclosed the detail of rate of interest which is 9% to 10.25% charged by the bankers from the textile units. It is urged by the learned counsel for the petitioner that all the facts and grounds taken in the representation were not considered and straightway by impugned order dated 5/2/2007 the representation was rejected. Hence, it is prayed that respondent bank may be directed to charge lower rate of interest from the petitioner firm because bankers are charging lower rate of interest from other textile units. Per contra, learned counsel for the respondents vehemently argued that with open eyes loan was taken by the petitioner unit and at the time of signing papers it was agreed that rate of interest applicable to `A' category of borrower, subject to change from time to time as per guidelines from RBI/HQ, will be paid by it. It is further agreed that at present 15.75% pa is the - 5 - prevailing rate of interest, however, term loan of Rs.233.87 lacs shall be assessed for eligibility under TUFs by the Nodal Agency i.e. IDBI. According to the learned counsel for the respondents the bank is under obligation to charge rate of interest as per RBI/HQ guidelines. It is further submitted that all the points were considered and speaking order was passed by the Assistant General Manager while deciding the representation. It is argued that rate of interest is required to be charged as per the policy of the bank and the terms and conditions as contained in the loan documents are required to be followed by the bank as well as by the petitioner. Therefore, initially the rate of interest was 15.25% pa. On working capital and 15.55% on term loan as per the terms and conditions of sanction letter dated 9/5/2002. As per the policy of the bank the same was changeable from time to time as per directions of Reserve Bank of India and at the time of issuing order dated 5/2/2007 it was 13.25% on working capital and 13.75% on term loan, therefore, all the terms and conditions of sanction letter including rate of interest were accepted by the petitioner firm before availing the credit facility. Hence, the representation was rightly decided and there is no error in it. - 6 - Further, it is submitted that the respondent bank has decided the representation in full spirit of the order passed by this Court and complied with all the directions issued by this Court while deciding the representation. Learned counsel for the respondents further argued that in the garb of raising dispute with regard to rate of interest, the petitioner firm has not paid the overdue, therefore, he is not entitled for any relief from this Court. It is further submitted that the petitioner's bonafides are not upto mark because had it been so, the petitioner could have deposited the overdue and interest and then he was to raise his objections. After hearing both the counsel, first of all it is required to be observed that earlier writ petition, in which the impugned notice dated 17/2/2005 issued under Section 13(4) of the Act of 2002 was challenged, was withdrawn and direction was given to the respondent Bank to decide the representation with regard to dispute of interest. This Court while passing the order dated 5/1/2007 no where directed that which authority shall decide the representation. Obviously, as per the order of this Court, bank was to decide the - 7 - representation filed by the petitioner, therefore, the contention of the petitioner that Chairman ought to have decided the representation as it was addressed to him is not tenable because order has been passed by the Bank and not by any authority in individual capacity. Therefore, in my opinion, the contention of the petitioner that the order has been passed by incompetent authority lacks force. Further, upon perusal of Annex.26, it is clear that petitioner has agreed the terms and conditions of loan, therefore, the `A' category borrower is required to pay interest as per RBI/HQ guidelines and at the time of sanctioning the loan, the rate of interest was 15.75% pa and such condition was accepted by the petitioner. Now, the petitioner is raising voice that he was not aware of the market conditions, therefore, he has agreed upon such terms and conditions but the bank was fully aware of such market conditions, which in my opinion, cannot be accepted because it cannot be presumed that a company obtaining such a huge loan was not aware of the market conditions. Likewise, petitioner's contention that for different categories of textile units, banks are charging lower rate of interest is also not acceptable because rate of interest charged to any other account depends upon different parameters - 8 - applicable from time to time, so also, rate of interest for different borrowers in the same line of business can be different in different banks. Once the petitioner has accepted the loan upon the terms and conditions of the respondent Bank that he will repay the loan along with interest fixed by RBI, then he cannot back out from his acceptance and to challenge the said conditions which was accepted by him with open eyes. Therefore, in my opinion, the representation has rightly been decided by Assistant General Manager and there is no force in this writ petition. However, upon admitted rate of interest, if petitioner still wants to settle his account then he may approach the bank authorities. Upon making such request, the bank may consider the prayer for repayment sympathetically with a view that an industrial establishment should not be crushed while taking harsh action under the provisions of Section 2002. With the aforesaid observations, this writ petition is dismissed. (GOPAL KRISHAN VYAS), J. Pankaj Baweja