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Recovery of public money cannot wait indefinitely to suit the convenience of a particular borrower

In Brahm (Alloys) Ltd. & Anr.vs West Bengal Financial Corporation & Ors., three sale notices were issued against the assets of the Petitioner/Borrower. On each of the earlier occasions, the borrower had prayed for and been given time to repay but had failed. Against this latest notice, the borrower in its appeal submitted that the petitioners are already in touch with an Asset Reconstruction Company (ARC) regarding the loan being taken over by the said ARC. Such action on the part of the petitioners was already communicated to the respondent no.1. However, the respondent no.1 is taking a plea that there had been previous nonfulfillment by the petitioners of the liberty granted to the petitioners to repay the loan and that there is no provision in the State Financial Corporation Act for transferring such loan to an ARC. The petitioners through the present application again sought some time to finalize the arrangements with the ARC for the purpose of repayment of the loan advanced by respondent No.1 and in any event, the petitioners may be given a chance to meet the highest price once the offers come in with regard to the latest auction sale. That will mitigate the grievance of the petitioners of not getting an opportunity before the assets are sold out.

The Respondent argued that against each previous sale notice, the Borrower had filed writ trying to stop the sale while pledging to repay the loan but has failed. Further, the offer given by the ARC, as annexed to the pleadings, was conditional, leaving scope for further negotiation. However, respondent no.1 does not want to prolong the recovery by sale, more so because public money is involved. A fresh process of negotiation was turned down by the respondent no.1 on such score. Hence, the ARC’s negotiations cannot form a relevant basis for staying the process of sale which has now been undertaken.

The High Court dismissed the writ observing that recovery of public money cannot wait indefinitely to suit the convenience of a particular borrower. In the present case, even the latest offer given by the concerned ARC, with whom the petitioners are negotiating, is patently conditional. As such, there is no final proposal, even at this stage, coming from the ARC at the behest of the petitioners for repayment of the loan. 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. 

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