On an out of control settlement...

A sum in excess of over a quarter of a million US dollars was paid three weeks ago in “full and final settlement” to sign it off. 

This has been an issue with several fundamental gaps such as the Supervisory/Regualatory authroity (RBI) and the overseeing Ministry refusing to look into the details of the harm done by a bank to cause the collapse of a business, and the DRT ruling not to grant the fundamental right of the borrower to have the details of accounts from the bank. All of it is summarized in the letter to the letter to the Governor, Reserve Bank of India and in the post Why it is important to get the bank to furnish accounts

Eight years are gone in the process. And the bank placed on record the name of the company and the names of the Directors in the records of credit rating agencies such as CIBIL. These agencies take the list of names unilaterally furnished by banks as Gospel and happily tarnish the listed names by flashing the names across continents, without a due, deeper evaluation. In my case, this blocked all alternate funding avenues and hence the operations of Whitefield Cottons P Limited as also blocked any form of funding for many new ventures conceived by the Directors, including Turiya.

Qualified advise received from respectable friends with inside insights to how banking works was along this lines: Give up this fight. They gang up against you and will not let you live in peace, wherever you go. Even mysteriously interferences in my pubic participatory life?

It definitely spilled beyond business to an area that matters most. In the Indian context, business fortunes are inextricably interlinked with life at home. Eight years of this helpless situation caused untold harm and pain in the family. While the family has been offering to talk to the bank to settle the claim irrespective of whether or not it is due - peace at any cost - I felt it unfair to allow a payment that was not due, given the magnitude of damages caused and continue to be caused. I resisted, the situation took its toll, more appeared in sight, so it became inevitable that the family stepped in and I became detached to how the issue was handled.

INR 80,00,000 was the original erroneous claim as principal outstanding in 2001. The bank went to court with a list including interest on the amount till 2003 to a make it a total claim of INR 124,00,000 in August 2003. The bank wouldn't respond to my earlier letters such as "tell us how the liability is arrived at and we will pay". It had its own reasons to be evasive on such basics as proof of liability.

The family approached the bank prompted by intermediary relatives of my wife accompanied by her family's Chartered Accountant. The bank started discussions with its imaginative arithmetic of a magic figure of INR 3,00,00,000 + (how the bank managed to quadruple the original erroneous claim of INR 80,00,000 of 2001 is another wonder which I wonder would ever be examined against any of the norms of the Core Principles of Effective Banking Supervision)

So a settlement of INR 130,70,000 on an unestablished principal of INR 80,00,000 was reached and paid up. And this has not been done peacefully or carefully. An inevitable Wedding Gift, that I had reason to resist all along, thrust upon fourteen years into the marriage. If it is an integral part of India's culture to offer and accept wedding gifts, but I am prone to consider this Wedding gift as different, because I don't like the way the gift wrapped up a fundamental issue of a challenge by a defenseless small business against a bank .

(an abdriged summary of a blog post that I wrote on April 3, but chose not to publish)