JUDGMENT
Amitava Lala,, J.
1. The writ petition has been made before this Court that One Time Settlement (hereinafter called as ‘OTS’) guidelines notified by the Reserve Bank of India vide Circular No. RBI/2005-06/153 dated 3rd September, 2005, is binding upon the bank to accept the same mandatorily. Factually, twice the OTS has been rejected on 20th March, 2006 and 15th May, 2007. The order has been passed under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, from which alternative forum of appeal under Section 17, before the Debts Recovery Tribunal is available.
2. Learned Counsel appearing for the writ petitioner contended before this Court that since the circular of Reserve Bank of India has mandatory effect, the Bank is compelled to accept the same having its statutory force He cited a judgment Central Bank of India v. Ravindra and Ors. From sub paragraph 5 of paragraph 55, it has been pointed out by the learned Counsel, that Supreme Court held Reserve Bank of India, is one of the watchdogs of finance and economy of the nation in certain cases i.e., deal with rate of interest which can be struck down, interest calculated thereon and charged and capitalised etc. Supreme Court held that circulars shall bind those who fall with the net of such directives. For such transaction which are not squarely governed by such circulars, the RBI directives may be treated as standards for the purpose of deciding whether the interest-charged is excessive, usurious or opposed to public policy.
3. We have gone through the particular section being Section 35A of Sub Section 1 & 2 both of the Banking Regulation Act. 1949 as quoted herein.
4. 35-A. Power of the Reserve Bank to give directions.- (1) Where the Reserve Bank is satisfied that.
(a) in the [public interest] or.
[(aa) in the interest of banking policy; or]
(b) to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or.
(c ) to secure the proper management of any banking company generally.
it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions.
(2) The Reserve Bank may, on representation, made to it or on its own motion, modify or cancel any direction issued under Sub-section (1), and in so modifying or cancelling any direction may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect.
5. It appears from such section that Reserve Bank of India has power to issue certain directions under certain circumstances which are falling under sub section 1 and if so, the Reserve Bank of India may on the representation or its own motion, modify, cancel or issue certain directions etc. Under no stretch of imagination such section, by our independent mind or with the analysis of the Supreme Court judgement., can be construed as mandatory. It has been held on several occasions by the Supreme Court and High Courts. Moreover, the OTS is dependable under various circumstance. The general circular which has been shown as annexure to the writ petitioner is not applicable to a wilful defaulter. According to Bank approximately a sum of Rs. 1,35,00,000/- (Rs. One Crore Thirty Five lacs only) is due and payable by the petitioner to Bank. The petitioner is entitled to take all such points in the appeal before the Debt Recovery Tribunal. So far as, the writ court is concerned the sky is not the limit to hear each and every cause as a matter of right that too from a defaulting litigant not paying claim of the bank.
6. Thus, factually and legally we are unable to accept the submissions on the part of the writ petitioner. As such, thus the writ petition stands dismissed.
7. However, no order is passed as to costs.
Shishir Kumar, J.
8. I agree.