M/S.Agathyaz Traders vs. The Authorised Officer

Facts

The petitioner, M/s. Agathyaz Traders, represented by its Proprietrix G. Geetha, filed a writ petition before the Madurai Bench of the Madras High Court. The petition sought to quash an order dated 16.12.2022 passed by the learned Chief Judicial Magistrate, Karur, in Crl.M.P.No.1038 of 2022. The petitioner stated that due to the Covid-19 pandemic, business closures and financial crises led to an inability to pay the entire outstanding amount to the respondent Bank (State Bank of India). The petitioner also mentioned having paid GST to the Department. The respondent Bank had initiated proceedings for the outstanding amount. The petitioner undertook to pay the entire outstanding amount, either through a One-Time Settlement or another offer from the Bank.

Held

The Court directed the petitioner to pay a sum of Rs. 1 crore to the respondent Bank within two weeks from the date of receipt of the order. Concurrently, the petitioner was directed to submit a proposal to the respondent Bank for settling the remaining outstanding amount, either through a One-Time Settlement or any other offer. Upon receipt of the proposal and after the petitioner pays Rs. 1 crore, the respondent Bank is to consider the proposal and pass appropriate orders in accordance with law within two weeks thereafter. The impugned order in Crl.M.P.No.1038 of 2022 was ordered to be kept in abeyance until these directions are complied with. The Court also stipulated that if the petitioner fails to comply with these undertakings, the respondent Bank may proceed further in accordance with law. The writ petition was disposed of with these directions.

Key Issues

1. Whether the impugned order dated 16.12.2022 in Crl.M.P.No.1038 of 2022 on the file of the learned Chief Judicial Magistrate, Karur, is liable to be quashed? Petitioner's contention: The petitioner argued that due to financial difficulties arising from the Covid-19 pandemic, they were unable to clear the outstanding dues to the respondent Bank. They stated that they had paid GST to the Department and were willing to settle the remaining dues through a One-Time Settlement or any other offer made by the Bank. The petitioner further undertook to pay a sum of Rs. 1 crore within two weeks. Revenue/State's contention: The learned standing counsel for the respondent Bank strongly objected to the petitioner's proposal, alleging that the petitioner's intention was to stall proceedings without paying the outstanding amount. The counsel stated that the petitioner had not shown any bona fide in paying the amount and that the Bank would consider the proposal if some amount was paid.