TaxTMI 
TaxTMI 
2025 (9) TMI 929
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....ager and the Deputy General Manager [the appellants] of the State Bank of India [SBI] came to be dismissed thereby. The writ appeal was directed against the judgment and order dated 22nd September, 2022 of a Single Judge, who allowed the respondent's writ petition [Writ Petition No. 22706 of 2020]. THE FACTS 2. The facts leading to presentation of this appeal are not in dispute. a) SBI is a "secured creditor" and the respondent a "borrower" as defined in Section 2(zd) and 2(f), respectively, of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [SARFAESI Act]. b) Having availed credit facilities from the SBI by mortgaging 7 (seven) immovable properties, the respondent failed to adhere to the payment schedule and defaulted in its obligation to repay. Additional time granted for regularising the payments proved abortive. c) Respondent's account was then classified as "non-performing asset", triggering a demand notice dated 31st May, 2017 under Section 13(2) of the SARFAESI Act. A sum of Rs. 7 crore (approximately) was demanded from the respondent, with further interest from 1st June, 2017. d) Such demand not havi....
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....tober, 2019 by filing an application under Section 17 of the SARFAESI Act [S.A. No. 399 of 2019]. DRT, vide order dated 21st November, 2019, granted interim stay of the sale till 23rd December, 2019 subject to payment of Rs. 1 crore (in two instalments) by the respondent in 30 days. Although deposit of Rs. 50 lakh was made, the respondent failed to deposit the balance amount of Rs. 50 lakh. This resulted in the DRT declining extension of time, as prayed by the respondent. j) The stay order having stood vacated, a fresh sale notice was issued on 12th February, 2020. Respondent again challenged this notice by filing an interim application [I A No 637 of 2020] in the pending application under Section 17 of the SARFAESI Act. DRT declined to pass an order of stay; instead, granted liberty to the appellants to proceed with the sale. In pursuance thereof, one of the mortgaged properties was sold in an auction on 18th March, 2020 and sale confirmation letter was issued to the auction purchaser on 15th April, 2020. k) While things stood thus, on 12th October, 2020, SBI introduced a scheme for One Time Settlement [OTS] of outstanding dues in excess of Rs. 20 lakh and up to ....
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.... to deposit upfront amount - within the stipulated time and I am also willing to withdraw S A 399/2019 pending on the file of Honourable Debts Recovery Tribunal, Visakhapatanam." (emphasis ours) n) Seeking objective consideration of the aforesaid points together with other points, as mentioned, the respondent sought for settlement. o) This was followed by a letter of the first appellant dated 17th November, 2020 containing the order of rejection of the respondent's application for OTS of the dues under the OTS 2020 Scheme. The first appellant referred to the previous conduct of the respondent of having failed to comply with the order passed by the DRT, seeking extension of time to make deposit which was declined resulting in vacation of the interim order of stay, sale by auction of one mortgaged property as well as suppression of facts. These constituted the grounds for rejection of the application for OTS. p) Crestfallen, the respondent invoked the writ jurisdiction of the High Court seeking quashing of the letter containing the order of rejection and for a direction on the appellants - respondents in the writ petition - to consider the applicat....
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....nded that the OTS 2020 Scheme cannot be enforced under Article 226 of the Constitution unless all terms and conditions are satisfied. According to him, a public duty must be shown to exist before a mandamus could issue directing a public authority to discharge such duty. Here, there was no such public duty which the appellants failed to discharge having noted the conduct of the respondent in failing to clear his debt despite having been granted sufficient opportunities. 5. Referring to the letter dated 23rd November, 2018 being the prior OTS offer of the appellants, Mr. Venkatraman asserted that except for payment of the up-front amount of Rs. 0.50 crore (i.e. Rs.50 lakh), the respondent did not pay a penny. He also referred to the order dated 21st November, 2019 of the DRT to drive home his point that failure and/or neglect of the respondent to pay the balance sum of Rs.50 lakh resulted in vacation of the interim order of stay. 6. Stressing that the conduct of the party invoking the writ jurisdiction of a high court under Article 226 is relevant, Mr. Venkatraman submitted that here is a litigant who not only does not honour his commitments but also has scant respect for orde....
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....on of the process, the respondent challenged it under Section 17 of the SARFAESI Act and by an order dated 1st September 2021, the DRT set aside the notice, the auction, and any sale certificate. This fact, it was urged, has been suppressed in the present proceedings. Moreover, 25% advance deposited by the auction purchaser was never credited to the respondent's account and was refunded on 8th September 2021 by the authorized officer himself. Hence, no third-party rights accrued. Reference was also made to the respondent's letter dated 10th November 2020 offering to indemnify the SBI against any vexatious claims by the purchaser. 14. With regard to the second auction of 26th April 2022, Mr. Naidu submitted that the sale remains under challenge before the DRT, and the auction purchaser's deposit too has been refunded, leaving no subsisting sale consideration with the SBI. 15. On the question of bona fides, it was contended that the respondent is not a wilful defaulter. Respondent, an operational creditor of ICOMM Tele Limited, has unpaid claims of Rs. 5 crore, in respect of which it only received a sum of Rs. 9,63,123/- in the insolvency proceedings. Such circumstances directl....
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....cted and there is no positive direction for granting an OTS. 22. Notwithstanding limited notice having been issued on a special leave petition, that this Court can expand the scope of the lis is no longer res integra. One may profitably refer to the decision of this Court in Biswajit Das v. Central Bureau of Investigation 2025 SCC OnLine SC 124. 23. The only question that we are tasked to decide is, whether the High Court erred in its interference with the said order of rejection of the respondent's application under the OTS 2020 Scheme and directing re-consideration thereof. 24. For the discussions and reasons that follow, we are of the opinion that the High Court was not justified in its interference with the order of rejection. 25. OTS 2020 Scheme was launched by the SBI to augment efforts towards recovery of outstanding dues. Apart from clause 2.1 of the OTS 2020 Scheme providing "cases not eligible to be covered", heavily relied on by the Division Bench, clause 4(i) thereof provided as follows: "The borrower has to deposit 5% or 15%(for wilful defaulters) of the OTS Amount (As per the settlement formula point v) at the time of submission of application (in....
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....earing and submitted that clause 4 read with clause 6 of the OTS 2020 Scheme makes it clear that all branches of the SBI were obligated to identify eligible borrowers, send intimation specifying dues, payment modalities, and last date for application under the scheme. However, despite the appellants not following the OTS 2020 Scheme by sending intimation with quantification of the respondent's dues and the payment modalities, the respondent, in filing the application accompanied by the upfront amount, fully complied with the scheme requirements. Therefore, it cannot be argued that the respondent was ineligible on grounds of non-compliance of the terms. 33. In light of his arguments, Mr. Naidu prayed for dismissal of the appeal and for an order on the appellants to proceed in terms of the directions in the impugned judgment and order. 34. A question would obviously arise for our answer, having regard to the Constitution Bench decision in Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405 and the larger Bench decisions of this Court in Commissioner of Police v. Gordhandas Bhanji AIR 1952 SC 16 and Opto Circuits (India) Ltd. v. Axis Bank (2021) 6 SCC 707, as to ....
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....nd 63 Moons Technologies Ltd. (supra), in our reading, while mandating what has been noticed above was not required to and, as such, rightly did not go that far in establishing the principle that, in all cases coming before it, the court is necessarily bound to confine itself to the grounds mentioned in the administrative order under challenge and cannot look beyond such grounds at all. While the courts, in course of reviewing administrative orders, may not permit additional grounds not found within the four corners of the said order to be raised in an affidavit or in oral arguments, we are inclined to the view that the factual narrative in such order and the documents referred to therein can certainly be considered together with the case set up in the writ petition, but in appropriate cases. Such cases could include a case, as the present, where the mentioned grounds are found to be untenable and, thus, unsustainable, but an alternative ground (appearing from the factual narrative in the order itself and/or from the records relevant thereto) is traceable which could have validly been mentioned as a ground to support the impugned rejection had there been a proper application of min....
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....ons. 42. Assuming arguendo that a ground not mentioned in the administrative order under challenge cannot be permitted to be raised in an affidavit or in course of arguments, we bear in mind that the High Court - both the Single Judge and the Division Bench - did not issue any positive direction to the appellants to grant the proposal of the respondent for an OTS. What the High Court required was a re-consideration of the respondent's application for OTS, treating it to be eligible under clause 2 of the OTS 2020 Scheme. However, clause 2 was not the only clause relating to eligibility. There were other clauses too, viz. the various sub-clauses of clause 1 apart from clause 4. Having regard to the fact that applicability of clause 4(i) of the OTS 2020 Scheme as a potential ground for rejection had been brought to the notice of the parties and responses elicited, as noted above, even if the impugned judgment and order were not disturbed and the appeal dismissed by us, it would still be open to the appellants to fall back on the omission of the respondent to comply with clause 4(i) of the OTS 2020 Scheme to reject its application for OTS. Would, in such circumstances, the cause of ....