Page No.# 1/6 GAHC010018682025 2025:GAU-AS:1475 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/527/2025 M/S HOTEL KUSUK, AND ANR C- SECTOR, BANK TINIALI, ITANAGAR, PAPUMPARE, ARUNACHAL PRADESH-791111. 2: SHRI TAMCHI KUSUK S/O LATE TAGUNG TAMCHI C- SECTOR BANK TINIALI ITANAGAR-791111 PAPUM PARE ARUNACHAL PRADESH BOTH THE PETITIONERS ARE REPRESENTED BY SHRI MARGE ETTE S/OLATE HOGMAR ETTE R/O PRESS COLONY PAPU NALLAH NAHARLAGUN-791110 PAPUMPARE ARUNACHAL PRADESH VERSUS THE NORTH EASTERN DEVELOPMENT FINANCE CORPORATIONLIMITED AND 3 ORS. NEDFi HOUSE, G.S.ROAD, DISPUR,GUWAHATI- 781006. 2:THE CHAIRMAN AND MANAGING DIRECTOR Page No.# 2/6 NEDFi NEDFI HOUSE G.S. ROAD DISPUR GUWAHATI-781006 3:THE DEPUTY GENERAL MANAGER (SAMD) NEDFI NEDFi HOUSE G.S. ROAD DISPUR GUWAHATI-781006 4:SHRI PVSLN MURTY THE CHAIRMAN AND MANAGING DIRECTOR NEDFI NEDFi HOUSE G.S.ROAD DISPUR GUWAHATI-78100 Advocate for the Petitioner : MR. K N CHOUDHURY, N GAUTAM,MR. S BISWAKARMA Advocate for the Respondent : MR G DAS, MR. S DUTTA (ALL RESPONDENTS),FOR CAVEATOR BEFORE HONOURABLE MR. JUSTICE MANISH CHOUDHURY ORDER Date : 12.02.2025 Heard Mr. K.N. Choudhury, learned Senior Counsel assisted by Mr. S. Biswakarma, learned counsel for the petitioners; and Mr. S. Dutta, learned Standing Counsel, NEDFi for all the respondents, that is, the respondent no. 1 to 4. 2. The petitioners have approached this Court challenging inter alia an Order dated Page No.# 3/6 09.01.2025 [Annexure – X] whereby the petitioners’ application for compromise settlement, submitted on 10.12.2024, has been rejected by NEDFi Ltd. 3. It is stated that the petitioners in the year 2016 sought financial facilities in the form of term loan, etc. from the respondent North Eastern Development Finance Corporation Limited [‘NEDFi Ltd.’, for short] for setting up a proposed 4-Star category hotel at Itanagar. After consideration of the proposal, the respondent NEDFi issued a Letter of Sanction on 20.07.2016 for a Rupee term loan not exceeding Rs. 15,00,00,000/- [Rupees fifteen crores]. After the loan was sanctioned, a loan agreement was executing between the parties on 12.12.2016. According to the loan agreement, the loan amount of Rs. 15,00,00,000/- [Rupees fifteen crores] was to be disbursed in phased manner. 4. It is stated that the respondent NEDFi Ltd. disbursed Rs. 10,00,00,000/- [Rupees ten crores] in terms of the loan agreement in phased manner to the petitioners against the sanctioned amount of Rs. 15.00,00,000/- [Rupees fifteen crores]. For the purpose of securing the loan, the respondent NEDFi Ltd. created equitable mortgage against the following two landed properties of the petitioner no. 2 which are as under :- i. Land Measuring 2000 sq. mtrs bearing land allotment no. DC/LM/ITS(A)- 1326/08, land passbook no. Its-17/110/2015, Plot/Dag no. 1461, Map Sheet no. J/16 located at C-Sector, Itanagar, Arunachal Pradesh, and ii. Land measuring 500 sq.mtrs bearing land allotment no. LRB-09271/21/94, land passbook no. NLG-9/82/2005, Plot/Dag no. DC/PL/21/94 located at Papu Nallah, Naharlagun, Arunachal Pradesh. 5. In course of time, the respondent NEDFi Ltd. declared the loan account of the petitioners as a non-performing asset [NPA] due to alleged default committed by the petitioners in payment of the installments as per the terms and conditions of the loan agreement and consequently, proceedings have been initiated under the Recovery of Debts and Bankruptcy Act, 1993 [‘the RDB Act’, for short] against the petitioner no. 1, a sole proprietorship firm, as well as the petitioner no.2, who is the sole proprietor of the petitioner no. 1 firm. Page No.# 4/6 6. During the pendency of those proceedings under the RDB Act, the petitioners submitted an application seeking compromise settlement by offering an amount of Rs. 8,90,00,000/- [Rupees eight crores and ninety lakhs] towards full and final settlement of its outstanding dues in respect of the loan account and along with its application, an amount of Rs. 1,78,00,000/- [Rupees one crore and seventy eight lakhs] was deposited as up-front payment by way of cheques. The said application came to be rejected by the impugned order dated 09.01.2025. 7. A number of contentions and counter contentions have been agitated by the learned counsel for the parties. In response to the writ petition, a counter affidavit has been filed on behalf of the respondent nos. 1 to 4. 8. Mr. Choudhury, learned Senior Counsel appearing for the petitioners has submitted that the Reserve Bank of India [RBI] has issued a Circular dated 08.06.2023 laying down ‘the Framework for Compromise Settlement and Technical Write-offs’ by Regulated Entities [REs], which would include the respondent NEDFi Ltd. also. He has submitted that the Circular dated 08.06.2023 has laid down a number of guidelines as to how an application for compromise settlement is to be processed, examined and considered. It has been submitted that as per the Circular dated 08.06.2023, any application for compromise settlement has to be examined and considered in the light of Policy approved by the Board of the concerned Regulated Entity [RE]. He has contended that the rejection order dated 09.01.2025 was not in terms of the guidelines laid down in the Circular dated 08.06.2023 and there is no mention that the application for compromise settlement was examined and considered in terms of the Board- approved policy of the respondent NEDFi Ltd. He has further submitted that notwithstanding the rejection of the petitioners’ earlier application dated 10.12.2024, the petitioners have submitted another application for compromise settlement subsequently on 29.01.2025 by offering a higher amount of Rs. 11,00,00,000/- [Rupees eleven crores] towards full and final settlement of the loan account of the petitioners and such an application is required to be examined and considered in terms of the policy approved by the Board of NEDFi Ltd. as a Regulated Entity [RE] pursuant to the Circular dated 08.06.2023 of the RBI. 9. Mr. Dutta, learned Standing Counsel, NEDFi Ltd. placed a copy of the NEDFi’s Page No.# 5/6 Compromise Settlement Policy, approved by the Board of the NEDFi Ltd. in September, 2024 and circulated by an Office Circular no. 24.10.2024. It is kept with the case records, by marking as Document – ‘X’. 10. Mr. Dutta has submitted that in the Compromise Settlement Policy, the settlement criteria have been delineated and all the other procedures regarding examination and consideration of an application for compromise settlement have been mentioned. He has further submitted that notwithstanding the rejection of the petitioners’ application earlier by the NEDFi on the ground that the offer of one-time settlement amount of Rs. 8,90,00,000/- [Rupees eight crores and ninety lakhs] against the total outstanding amount of more than Rs. 13,00,00,000/- [Rupees thirteen crores] was not acceptable due to the higher valuation of the two mortgaged properties the NEDFi Ltd. could examine and consider the subsequent application, stated to have been submitted by the petitioners, for compromise settlement offering a higher amount of Rs. 11,00,00,000/- [Rupees eleven crores] in terms of the NEDFi’s Compromise Settlement Policy and in terms of the Circular dated 08.06.2023 of the RBI and, thereafter, inform the petitioners about the decision reached on such application. 11. On the perusal of the Circular dated 08.06.2023 of the RBI, which has laid down the framework for compromise settlement with a direction to the Regulated Entities [REs] to ensure its compliance, it transpires that even if any recovery proceeding is initiated by a Regulated Entity [RE] before a judicial forum, the parties can still arrive at a compromise settlement, subject to obtaining constant decree from the concerned judicial forum. In such view of the matter, there appears to be no bar for the respondent NEDFi Ltd. to consider the subsequent application submitted by the petitioners seeking compromise settlement by offering a higher amount of Rs. 11,00,00,000/- [Rupees eleven crores] on 29.01.2025 in terms of the NEDFi’s approved Compromise Settlement Policy and the Circular dated 08.06.2023 of the RBI. Therefore, without commenting on the earlier round of compromised settlement which has ended vide the order dated 09.01.2025, this Court deems it appropriate, in the interest of justice, to dispose of the writ petition with a direction to the competent authority in the respondent NEDFi Ltd. to examine and consider the subsequent application submitted by the petitioners seeking compromise settlement on 29.01.2025 Page No.# 6/6 offering a higher amount of Rs. 11,00,00,000/- [Rupees eleven crores] in terms of the of the NEDFi’s Compromise Settlement Policy and the Circular dated 08.06.2023 of the RBI at the earliest, and within an outer limit of 15 days from the date of receipt of a copy of this order from the petitioner. The decision arrived thereon shall be communicated to the petitioners forthwith thereafter. 12. This order disposes of the writ petition. No cost. JUDGE Comparing Assistant