IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.16068 of 2008 Shakeel Ahmad Khan son of Late Banli Khan resident of Banjariya(Ambika Nager) Motihari, P.S.-Motihari, District-East Champaran. ……..Petitioner Versus 1. The State Of Bihar 2. The Bihar State Financial Corporation through its Managing Director, Fraser Road, Patna. 3. The Branch Manager, The Bihar State Financial Corporation, Bhawanipur, Motihari, East Champaran. 4. The Deputy Manager, Fraser Road, Patna, the Assistant General Manager I/C(2-1) Fraser Road, Patna. ………Respondents. ----------- For the Petitioner : Sushmita Moshra, Adv : Krishna Ballabha Sharma, Adv. For the Respondents : K.D. Chatterjee : Vinay Krishna Tripathy ------------- 04. 24.03.2009 The petitioner is a small time baker and had taken a financial assistance from the Bihar State Financial Corporation of Rs. 2.50 lakhs to run a bakery in the name of Royal Bakery at Motihari. The petitioner, due to various reasons which are not relevant, defaulted in meeting his obligations to the Bihar State Financial Corporation. When the Bihar State Financial Corporation came with One Time Settlement Scheme, 2006, (OTS 2006) petitioner applied for one time settlement under plan-C (Super 150) which was accepted by the Corporation. Under 2 the said Scheme, petitioner was required to deposit a total amount of Rs. 3,89,711/- by 05.01.2008. By 05.09.2007 petitioner deposited Rs. 3,25,500/- leaving a balance of about Rs. 64,000/-. Thus seen substantial payment had already been made. At this stage petitioner became ill with Hepatitis B and this was the reason why petitioner could not pay the balance of his amount. On 29.05.2008, he made an application for grant of some more time to deposit the balance amount and also agreed to pay interest on the said amount for the delay. This has been turned down by the Corporation and now the bakery of the petitioner along with the land and building is to be auctioned by the Corporation for realisation of dues of about Rs. 25.50 lakhs. It would thus been seen that an initial loan granted by the Corporation of about Rs. 2.50 lakhs has now swollen up to Rs. 25.50 lakhs. Petitioner has stated and it is not denied by the Corporation, that in several cases the Corporation has granted time extension under the OTS Scheme, 2006 itself on payment of interest for the extended period. But it is maintained in the present case by the Corporation that there is no power under the OTS Scheme, 2006 to grant any such extension and as such 3 extension can not be granted. Alternatively it was submitted that extension was granted only in deserving cases and petitioner’s case is not a deserving case for such a sympathetic consideration. Heard the parties. As pleadings are complete, with the consent of the parties, the matter is being disposed of at this stage itself. From the facts stated above, it is apparent that petitioner had well within time liquidated more than 75% of its liability under OTS Scheme, 2006. He fell ill with Hepatitis B. He then prayed for extension on payment of interest which was rejected. The balance was only about Rs. 64,000/- that was left to be paid for full and final settlement but for failing to pay about Rs. 64,000/-, petitioner is now being made liable to pay and account for over Rs. 25 lacs. Thus penalty for a default in failure to pay Rs. 64,000/- is Rs. over Rs. 25 lacs. This in my view, leads to a very inequitous situation. More so if we consider that in several cases, B.S.F.C. itself had granted time extension even though as per itself, there was no such provision in its own policy. Suffice to say that the B.S.F.C. being the author of the policy, nothing prevented it from relaxing the same. They did relax it in respect of several people. 4 I see no reason why it can not be or could not be relaxed in case of the petitioner. Here the consequences are as grave as those noticed above. To the contention that petitioner’s case was not a deserving case, again the same is to be repeated that if accommodation as sought for is not granted the consequences are grave. The petitioner was ready and willing to liquidate his liability under OTS Scheme, 2006. The effort of petitioner to get out of his liability was bonafide and genuine. As held by the Apex Court in the case of Haryana Financial Corporation versus Jagdamba Oil Mills since reported in 2002(3) SCC 496 and position noticed and affirmed in the case of S.J.S. Business Enterprises Private Limited versus the State of Bihar and others since reported in 2004(7) SCC 166 of which I may refer to paragraph 23 (of the later judgment) which is quoted hereinunder. In Jagdamba Oil Mills It was observed (at SCC P. 507, Para 15) that the Court may “assist the borrower who has intention to repay, but is prevented by insurmountable difficulties in meeting the commitments”. The borrower in that case had made no payment whatsoever to State Financial Corporation of its outstanding loan. As not 5 even a minimal portion of the amount borrowed had been paid the Court refused to help the defaulter. The borrower, in this case had paid over Rs. 14 lakhs as against the principal amount of Rs. 44.56 lakhs. A further amount of Rs. 10 lakhs was paid on 27.03.2002 by the appellant to BICICO i.e. the day after the impugned sale notice was published. Before the High Court a sum of Rs. 10 lakhs was paid pursuant to the interim order. In addition, the appellant had approached BICICO to settle its outstanding dues under the one-time settlement policy. As we have already recorded, we entertained the special petition on the condition that the appellant would deposit a sum of Rs. 1 crore over and above the amount already paid by it to BICICO. This the appellant has also done. All this shows that the appellant could not termed to be such a defaulter who deserved no sympathy or assistance by the Court. The Court should come in aid to persons who are genuinely interested in liquidating their liabilities but for some reason or the other are unable to do so. 6 In that view of the matter, I direct that on petitioner depositing the balance outstanding under OTS Scheme, 2006 which was due final on 05.01.2008 along with simple interest at the contractual rate of interest within a period of two months, the Corporation would not auction petitioner’s bakery and deprive the petitioner on his bread and butter. If the petitioner on being intimated the amount due as aforesaid pays the total amount within two months from that day, BSFC would deem it to be full and final settlement under OTS Scheme, 2006 and close the account and return the documents of title, if any, submitted by the petitioner as a security for the loan concerned. No action would then lie in terms of section 29 of the BSFC Act. The writ application is disposed of with the aforesaid observations and directions. Shageer (Navaniti Prasad Singh, J)