Rajesh Bindal, J. - (1.) BY filing the present petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for issuance of a direction to the respondents for consideration and approval of offer for one -time settlement made by him as per policy framed by the Reserve Bank of India.
(2.) BRIEFLY the facts, as noticed in the petition, are that against a cash credit facility availed by Anmol Agro India Ltd. (for short "the loanee") from State Bank of India (for short "the Bank") on January 27, 1988, the petitioner stood as guarantor to secure the loan. The petitioner mortgaged his immovable property situated at Kaithal. The initial cash credit facility allowed to the loanee was Rs. 50 lakh. However, it was later on extended to Rs. 2.60 crores. The petitioner was a guarantor to the extent of original limit granted to the loanee. Due to non -payment of the loan raised by the loanee, the Bank filed an application before the Debts Recovery Tribunal (for short "the DRT") for recovery of Rs. 3,64,08,131.92. Keeping in view the terms of the guarantee deed signed by the petitioner, a decree of Rs. 58,00,350.92 was passed against the petitioner as guarantor. In pursuance to recovery certificate; the mortgaged property of the petitioner was auctioned for Rs. 30,12,000/ -: The proceedings of auction are yet to attain finality as in the objections filed by me petitioner, the sale was set aside by the Debts Recovery Tribunal against which further appeal, filed by the auction -purchaser before the Debts Recovery Appellate Tribunal, is pending. The claim made in the petition is that in terms of one -time settlement scheme formulated by the Reserve Bank of India, which is binding on all public sector Banks, the petitioner is entitled to settlement of balance of his due under the scheme. Copy of the guidelines issued by the Reserve Bank of India on September 3, 2005, is placed on record as Annexure P1. The proposal made by the loanee under the signature of the petitioner for one -time settlement on September 5, 2005, is also placed on record by the petitioner as Annexure P2. The petitioner has further referred to Chapter 27 of the policy circulated by the Reserve Bank of India, which provides for prudential norms on income recognition, asset classification and provisioning. Further, request made by the petitioner for one -time settlement on November 28, 2005, is also placed on record as Annexure P6.
(3.) IN response to the petition, learned Counsel for the Bank submitted that both the policies, as are sought to be relied upon by the petitioner for one -time settlement of the dues against the petitioner are not applicable. He submitted that in terms of paragraph 2 of the guidelines issued by the Reserve Bank of India on September 3, 2005, it is categorically provided that the same are not applicable in case of wilful default, fraud and malfeasance. Relevant part thereof is extracted below: The guidelines will not, however, cover cases of wilful default, fraud and malfeasance. Banks shall identify cases of wilful default, fraud and malfeasance and initiate prompt action.;