TaxTMI 
TaxTMI 
2023 (4) TMI 878
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....t, Act vide registration No. 12ACQPT0456M2Z5. The petitioner firm is also registered under MSME Act bearing Udyog Adhar No. AR10B0000504. According to the petitioner, he has executed successfully various works under various departments including NF Railway, GM Office. The petitioner applied for a loan from the Bank of India, Khanapara Branch. The respondent No. 4/Bank of India after due consideration of the application by the petitioner, granted loan on various credit facilities vide reference No. KHA/ADV/2016-17/SME/45 dated 04.01.2017 aggregating to an amount of Rs. 7,88,02,679.82 (Rupees seven crore eighty eight lakh two thousand seventy nine and eighty two paisa) towards the petitioner. Due to COVID-19 pandemic situation and nationwide lockdown which was enforced by the Government of India, the business of the petitioner firm suffered severe losses and the petitioner consequently defaulted in the repayment schedule for the loans advanced by the respondent No. 4/Bank of India. According to the petitioner, the total amount of loans sanctioned under the various facilities which was advanced to the petitioner by the respondent Bank and the corresponding dues required to be paid by....
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....l with those businesses which were classified as NPAs during the COVID-19 Pandemic period. The Government of India had initiated steps to provide fillip to those business operations during the COVID-19 Pandemic period, which have MSME Registration. It is submitted that under both these schemes, the petitioner's case ought to have been considered by the respondent Bank but instead the respondent bank initiated SARFAESI proceedings which is contrary to the RBI Circular as well as to the Government of India scheme for Pre Packaged Insolvency Resolution Process. The learned counsel for the petitioner submits that the petitioner firm comes within the eligibility criteria provided under both the schemes and as such benefits under the said Schemes ought to have been extended to the petitioner firm by the respondent bank. The proceedings initiated by the respondent bank under the SARFAESI Act is contrary to the RBI Circular as well as the Government of India Scheme. It is submitted that the RBI Circular is binding on all banks including the respondent No.4/Bank. The further submission of the learned counsel for the petitioner is that these benefits have not been extended to the petitioner ....
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....s contended that contrary to the contentions raised by the writ petitioner, the Bank had responded to the application submitted by the petitioner for restructuring the account as stated. It is contended that in terms of the RBI Circular dated 05.05.2021 the request by the petitioner for re-structuring the account under the resolution framework 2.0 of the RBI Guideline was communicated by an email dated 30.12.2021 by the Branch Manager, Khanapara Branch of the Bank. The extract of the email is enclosed as Annexure-8, Page 49 to the counter-affidavit filed by the respondent/Bank. The petitioner was requested to deposit the amount required immediately for upgradation of the loan account so that the restructuring process can be implemented as per the scheme. However, the said amount not being deposited in response to the e-mail issued, the restructuring could not be proceeded with. It is contended that since the restructuring of the loan account under the RBI resolution framework 2.0 could not be proceeded with, the bank proceeded to issue notice under Section 13(2) of the SARFAESI Act. In response to the contention of the petitioner that the bank failed to initiate proceeding/action u....
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.... measures to mitigate the hardships and distress faced by the various business entities like the petitioner during the COVID-19 pandemic situation, the banking authorities were duty bound in law to enforce such measures brought in by the Government of India and the banking authorities are responsible to ensure that all the steps are taken to implement the decision of the Government of India so that the benefits as contemplated by the Government of India percolates to those for whom the financial benefits have been envisaged and extended. In the same context, the learned counsel for the petitioner presses into service the Judgment of the Apex Court rendered in M/S Sardar Associates & Ors Vs. Punjab and Sind Bank & Ors reported in (2009) 8 SCC 257 to buttress her contention that when guidelines are issued by the RBI, a right is created in favour of the borrower. It is, therefore, submitted that the benefits conferred under the RBI Circular No. DOR. STR. REC. 12/21.04.048/2021-22 regarding Resolution Framework 2.0 and the Pre packaged Insolvency Resolution Process under Insolvency and Bankruptcy Code, 2016 has created a right in favour of the petitioner. The petitioner is entitled to ....
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....ent schemes to ameliorate the grievances and the hardships faced by the business entities. 9. There is no dispute that the RBI by circular No. DOR. STR. REC. 12/21.04.048/2021-22 had brought out resolution framework 2.0- Resolution of COVID-19 related stress of Micro, Small and Medium Enterprises (MSMEs). For the purposes of this case Sub Clause (vi) & (vii) of clause 2 are relevant. The same are extracted below: "(vi) The restructuring of the borrower account is invoked by September 30, 2021. For this purpose, the restructuring shall be treated as invoked when the lending institution and the borrower agree to proceed with the efforts towards finalizing a restructuring plan to be implemented in respect of such borrower. The decisions on applications received by the lending institutions from their customers for invoking restructuring under this facility shall be communicated in writing to the applicant by the lending institutions within 30 days of receipt of such applications. The decision to invoke the restructuring under this facility shall be taken by each lending institution having exposure to a borrower independent of invocation decisions taken by other lending institutions,....
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....t does not come within the definition of corporate applicant. Consequently, the insolvency and Bankruptcy (pre-packaged insolvency) Rules, 2021 are not applicable in so far as the petitioner is concerned. 13. The contention of the petitioner that the benefit under the Emergency credit Line Guarantee Scheme which was initiated by the Government of India was also denied to the petitioner. Although an averment in support of such contention is not pleaded in the writ petition initially but the same has been brought on record by way of a rejoinder affidavit. However, a careful perusal of the rejoinder affidavit reveals that there is no statement that the petitioner made necessary application under the Emergency credit Line Guarantee Scheme to avail the benefit as provided under the said scheme. It is merely contended that the petitioner has been deprived of the benefits under the said scheme by the bank. The learned counsel for the petitioner also has not been able to bring it to the notice of the Court any such application that has been preferred by the petitioner seeking benefits under the said scheme, which the petitioner claims had accrued during the COVID-19 pandemic phase. The wr....