Disposed

Pc Jeweller Ltd. v. State Bank of India & Ors.

DRAT25 Jan 2023MISC APPEAL/9/2023

Case brief

AI extract

What is this about?

In Misc. Appeal No. 09/2022, on the request of both parties to explore amicable solutions for operational premises affected by a stay order, the Tribunal facilitates an interim arrangement. The court appoints custodians and observers for inventory/valuation of specific showrooms, directs partial resumption of operations, mandates audited sales reporting, and schedules further hearings.

What the court decided

AI extract

Pc Jeweller Ltd. versus State Bank of India & Ors. — Company and Corporate | DRAT (2023)

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DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI Misc. Appeal No. 09/2022 Arising out ofOA No. 01/2023 (DRT-III)

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P.C. Jeweller Ltd .

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Vs.

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State Bank of India and Ors.

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25.01.2023 Hon’ble Mr. Justice BrijeshSethi

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Present: Mr. Sanjeev Bhandari, Ld. counsel for the appellant along with Ld. CounselsMr. Ravi Data and Mr. Rajiv Singh along with Mr. Balram Garg, Managing Director of the appellant company. Mr. RajeeveMehra, Ld. Sr. counsel for the respondent along with Ld. Counsel Mr. Ankur Mittal and Mr. AteendraSaumya Singh for State Bank of India along with Mr. Balaji Singh Samanta, DGM, Mr. Rakesh Verma, AGM, State Bank of India, SAMB-1, Delhi. Mr. Samarendra Kumar, Ld. Counsel for R-20 (Union Bank of India).

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Part arguments heard today in the morning session through Video Conference.

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Mr. Sanjeev Bhandari, Ld. counsel for the appellant has pressed for urgent relief for the reason that 28 premises/ showrooms of the appellant are not being operational for the last six days. Mr. Rajeev Mehra, Ld. Sr. Counsel for the respondent has certain apprehensions in relation to the submissions made by Ld. counsel for the appellant.

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Since both the Ld. Counsels for the parties state that an amicable interim arrangement can be made by discussing the matter in detail in a congenial atmosphere, in these circumstances at the request of the Ld. Counsel for the parties, I have called all the learned counsels along with parties in my chamberto find out possibilities of interim arrangement. Detailed discussions were held and without prejudice to the rights and contentions of the parties it was agreed as under:-

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A) So far as following premises/ showrooms situated at

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i) PCJ- Karol Bagh (QC & Collection Centre) at 24/2708, Bank Street, Karol Bagh, New Delhi-110025.

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Page 1 of 5

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ii) PCJ-South Extension (Diamond and Procurement Centre) at F-47, South Extension, Part-1, New Delhi-110049.

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iii) PCJ Factory- Noida at J-59, Sector 63, Noida (U.P.)

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it is agreed that inventory of the Stocks will be carried out by M/S. AAA

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Capital Services Pvt. Ltd. and appropriate number of valuers and gemmologists to be appointed by the Respondent no.1 Bank/ SBI for the purpose of valuation of the same. The appellant is also at liberty to have its own appropriate number of valuers and gemmologists while carrying out the above exercise.

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It is also agreed between the parties that the inventory as well as valuation will start from 27.01.2023 from 12 Noon at the premises as mentioned above. This process will be completed by 31.01.2023.Upon the request of Ld. counsel for both the parties, Ld. Counsel Sh. Dhananjay Kumar Singh (M. No. 9810543549) is appointed as custodian and to oversee the above work in respect of premises no. mentioned at Sl. No. (i) and (ii) and Ld. counsel Mr. Samarendra Kumar (Mb. No. 9999114922) is appointed as custodian and to oversee the above work in respect of the above-mentioned premises at Sl. no. (iii). They shall be paid fees of Rs. 50,000/- (Rs. Fifty thousand only) each per day to be shared equally by both the parties till the process of making the inventory and valuation of stocks continues in relation to above three premises. Both the Ld. Counsel shall submit its report before this Tribunal.

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It is also agreed between both the parties that all the misc. expenses will be borne by the respondent no.1 Bank.

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B) It is further agreed between the parties that inventory as well as valuation of the stocks of showrooms at the following locations will be commenced by tomorrow evening at 5 PM i.e. 26.01.2023 and will be completed by 27.01.2023 morning after which the following showrooms can become operational.

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(i) PCJ- Karol Bagh at 24/2708, Bank Street, Karol Bagh, New Delhi110025.

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(ii) PCJ- Karol Bagh at 2713, Ground Floor, Bank Street, Karol Bagh, New Delhi-110025.

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Page 2 of 5

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(iii) PCJ- South Extension at F-47, South Extension, Part-1, New Delhi110049.

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Ld. Counsel for both the parties have also requested to appoint observers to oversee the preparation of inventory and valuation of stock in respect of above mentioned three premises. Upon their request, Sh. Naveen Thakur, Ld. Advocate ( Mob. no. 9811833037) is appointed as observer in respect of premises mentioned at Sl. No. (i) and (ii) and Ld. Counsel Sh. Ashish Kumar Sharma (Mb. No. 9810065268) is appointed as observer in respect of premises at Sl. No. (iii). They shall be paid fee of Rs. 1,00,000/- ( One Lac only), to be shared by both the parties equally. These Observers shall file their reports before this Tribunal.

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C) It is also agreed that appellant may operate the remaining other showrooms/ premises of the appellant and no inventory/ valuation of the stock will be carried out at present.

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D) It is further agreed between the parties that inventory and valuation of stock will be videographed and videograph film in original shall be kept in a sealed cover sealed with the seal of appellant as well as Respondent no.1/ SBI Bank and shall be filed before this Tribunal by respondent no.1 Bank. It is directed that none of the parties will leak or supply the videography film to any 3^rd party or person under any circumstances.

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E) It is further agreed between the parties that after the inventory as well as valuation of stock of above mentioned six premises, Mr. Rakesh Verma, Authorized Representative of the respondent bank/ SBI shall file the complete report before this Tribunal by 30.01.2023. Thereafter, this Tribunal will pass the appropriate orders in relation to the inventory so prepared and release of stocks lying at premises mentioned above in para A.

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F) It is further agreed between the parties that remaining other showrooms/ premises shall start operating from tomorrow onwards. However, the Managing Director Sh. Balram Garg has agreed that the regular weekly statement of all sales including exchange sales carried out by the appellant, (within three days of

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Page 3 of 5

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relevant concerned week) shall be submitted on regular basis to the respondent no.1 Bank till further orders. The appellant and its managing director have also agreed that all sales including cash sales shall be routed only through Trust and Retention account bearing no. 38832423746 maintained with SBI, Branch Office, SAMB-1, Delhi. Further it is agreed between the parties that the appellant shall be entitled to retain Rs. 5 Crores per month in relation to cash sales to meet out petty expenses/ misc. expenses/ customer refunds. The payments shall be made by the Bank as per the TRA Agreement till the next date of hearing.

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G) Further it is agreed between the parties that the appellant herein shall submit details of all ‘Exchange Sales’ taking place in any showroom/ premises/ factory with payment of cash / transfer of money (i.e. in kind) to the ASM Agency appointed by respondent no.1 Bank on weekly basis but not later than three working days of concerned week to ensure the genuineness of the transactions.

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H) M/s. Baker Tilly US, LLP, has been appointed by the lenders including respondent no.1 as an auditor to conduct special audit for the exchange sales or any other sale which are taking place in any showrooms/ premises/ factory without payment of cash/ transfer of money (i.e. in kind) conducted by the appellant for the period commencing from 01.01.2021 onwards and the appellant and its Directors and key managerial persons would provide full support to M/s.M/s. Baker Tilly US, LLP in carrying out above exercise and further provide all requisite information and documents in this regard including inquiry rights in their accounting software without any delay so that the exercise is completed by 28.02.2023 andany other subject to further extension by the respondent no.1 Bank (SBI) will subject to the request of appellant herein.

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In view of this interim arrangement between the parties with their consensus in the presence of their Ld. counsels, list the matter on 01.02.2023 for further orders.

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Page 4 of 5

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Mr. Sanjeev Bhandari, Ld. counsel for the appellant as well Mr. RajeeveMehra, Ld. Sr. Counsel for the respondent no.1/ SBI Bank states that they will make a request to the Ld. DRT-III, Delhi to adjourn the matter listed on 27.01.2023, post the date of hearing fixed in this matter.

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A copy of this order be supplied to Ld. counsels for both the parties as well as Ld. counsels who have been appointed as Custodians and observers.

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Mr. Balram Garg Mr. Ravi Datta, (Managing Director, Appellant company) (Counsel for the Appellant) Mr. Rajiv Singh, Mr. Balaji Singh Samanta, (Counsel for the Appellant) (DGM, State Bank of India, SAMB-1, Delhi) Mr. Rakesh Verma, Mr. Ankur Mittal AGM, State Bank of India, SAMB-1, (Counsel for the Respondent no. 1 Delhi) Bank (State Bank of India) Chairperson 25.01.2023.

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Pc Jeweller Ltd. v. State Bank of India & Ors.

Case brief

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Pc Jeweller Ltd. v. State Bank of India & Ors.

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