Recovery of public money cannot wait indefinitely: Calcutta High Court

The recovery of public money cannot wait indefinitely, observed the Calcutta High Court recently while dismissing a plea seeking time to repay a loan due to the West Bengal Financial Corporation after a sale notice was issued with respect to the borrower's assets (Brahm (Alloys) Ltd. & Anr.v. West Bengal Financial Corporation & Ors.) .The petitioner-company (borrower), Brahm (Alloys) Ltd. had sought some time to finalise arrangements with an Assets Reconstruction Company (ARC), that was stated to have agreed to take up the loan and repay the lender/financial corporation. .The Financial Corporation, however, opposed this prayer on the ground that the petitioner-company had exhibited recalcitrant conduct on several occasions earlier, indicating that they were in the habut of trying to stop the process of sale, whevere a sale notice was put up. .In this regard, it was pointed out that an earlier writ petition moved by the petitioner company in 2018 challenging the first sale notice issued by the financial corporation was disposed of by a Division Bench after restructuring the repayment schedule. .The borrower had failed to take advantage of this order, the Court was told. Furthermore, while another writ petition was filed challenging a second sale notice, this plea was not moved by the petitioner. .The instant plea was filed by the petitioner when a third notice of sale was issued. In this backdrop, the financial corporation told the Court that it did not want to prolong the recovery of the loan by sale any longer, more so since there was public money involved. .Justice Sabyasachi Bhattacharyya, in turn, saw merit in the financial corporation's arguments, observing that it was right in submitting that "recovery of public money cannot wait indefinitely to suit the convenience of a particular borrower.".The Court noted that the offer given by the ARC in this case was also patently conditional. As such, there was not final proposal from the ARC as of yet, it was noted. Therefore, it dismissed the petitioner-company's plea, observing, ."In such circumstances, the respondent no.1 was fully justified in proceeding with the sale of the assets of the borrower, particularly in view of the previous conduct of the petitioners. A fresh lease of life cannot now be granted to the petitioners, since such opportunity was previously given to them but the petitioners miserably failed to avail of the same. Recovery of public money cannot wait indefinitely.".The Court also noted, "Although counsel for the petitioners is right in so far as there is scope for repayment of loan through an ARC within the purview of Section 5 of the 2002 (SARFAESI) Act, such provision becomes academic in the present context, in view of the petitioners having already been given an opportunity as long back as on February 13, 2018, but having failed to avail of the same.".The petition was dismissed with the observation that while selling the assets, the petitioner-company should be given a reasonable opportunity to meet the highest offer."In the event the petitioners can give a concrete counter offer equal to or more than the highest offer, it will be open to the respondent no.1 to permit the petitioners to purchase back the property", the Court said..Read the order: