Unfair ‘settlement’ puts bank under High Court scanner | Chennai News

CHENNAI: Noting a bank’s single settlement offer of 14 lakh, against the principal loan amount of 62 lakh, and a court-ordered sum of 1.8 crore with interest, the Madras High Court has launched a due diligence investigation against the bank.
Appalled by the settlement pact, the First Bench of Chief Justice Munishwar Nath Bhandari and Justice D Bharatha Chakravarthy has now summoned the bank to explain why a vigilance investigation should not be ordered against the officer who agreed to the single settlement .
“Public money cannot be allowed to be embezzled in this way,” the bench said.
The matter relates to a plea filed by Virudhunagar-based Pandian Extractions Private Ltd challenging the decision of the Union Finance Ministry to reject the Single Settlement Pact entered into between the petitioner and the Industrial Investment Bank of India (IIBI).
“This tribunal takes cognizance suo motu of the whole matter relating to the Single Settlement and intends to know why an instruction should not be given to file a vigilance investigation or register a case against the officer who was implicated in the conclusion of a single settlement term, as well as against the plaintiff/appellant who is the beneficiary of the transaction,” the judges said.
“The action of the bank in making a single settlement for 14 lakh, against the principal amount due of 62 lakh and the decretal amount of 1.85 crore, this too, when two properties of the appellant were available, stinks of bad faith intentions and it only shows that there is more to the whole transaction than meets the eye,” the court said.
The court then adjourned the appeal until February 23 for the bank to respond.
A former Chief Justice of the High Court of Madras once said that Indians regard failure to pay a bank loan as their basic right. To prove the same, a failing private company managed to convince a bank to accept a one-time settlement of 14 lakh against a principal loan amount of 62 lakh and a court-ordered amount of 1.85 crore with interest.

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