Disposed

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

DRAT30 Jan 2023MISC APPEAL/9/2023

Case brief

AI extract

What is this about?

The Debts Recovery Appellate Tribunal heard an interlocutory application by the respondent bank to secure dues amid alleged massive deficiency in the appellant's gold and diamond stock. The court directed the closure of showrooms and protection of assets pending a reply.

What did the court decide?

Closure of 28 showrooms; posting of security guards by AN; filing inventory and valuation report by 31.01.2023; listing for reply on 01.02.2023.

Pc Jeweller Ltd. versus State Bank of India & Ors. — Contract and Commercial Disputes | DRAT (2023)

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DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI

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Misc. Appeal No.09/2023 Arising out of NDN (O.A.) No. 03/2023 (DRT-III, Delhi)

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P. C. Jeweller Ltd.

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Vs. State Bank of India & Ors.

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30.01.2023 Hon’ble Mr. Justice Brijesh Sethi

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Present : Mr. Sanjeev Bhandari along with Mr. Ravi Data, Ld. counsel for the appellant

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Mr. Rajeeve Mehra, Ld. Sr. Advocate along with Ankur Mittal and Mr.Ateender Saumya Singh, Ld. counsel along with Mr. Rakesh Verma, AGM (SBI) for the respondent/ applicant

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This matter has been taken up by me through Video Conferencing on being mentioned by the Ld. Sr. Advocate for respondent bank/ SBI stating that there is urgency in the matter.

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I.A. No.62/2023

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This is an application filed by the learned counsel for the respondent, i.e. State Bank of India for seeking urgent directions which are as follows:-

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1. Pass an order directing the appeal to be heard on merits in view of the above-mentioned facts and permitting the Respondent No.1 to withdraw its consent to the arrangement recorded in the order dated 25.01.2023 passed by this Hon’ble Appellate Tribunal.

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2. Pass an order directing the Appellant to furnish solvent security to the satisfaction of this Hon’ble Appellate Tribunal to the extent of INR 3500 Crores to secure the dues of the Respondent’s Banks (including the share of Respondent No.1 Bank in the said security to the extent of 34.1% i.e. INR 1160.67 Crores with interest and other charges, as the security is shared on pari passu basis);

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3. Pass an order directing immediate implementation of order dated 18-01-2023 passed by Ld. DRT-III, Delhi through the appointed receivers of Ld. DRT-III, Delhi or any other receivers as the Hon’ble Appellate Tribunal deems fit and proper;

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4. Pass an order to permit sale the seized inventory by the receivers and deposit the entire sale proceeds in an escrow account, and the sale proceeds to be utilised for repayment of dues of Respondent No.1 Bank and other Lender on pari passu basis as per the directions of this Hon’ble Appellate Tribunal or as per the order Ld. DRT-III, Delhi in pending OA No.1/2023;

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5. Pass an order dismissing the present appeal with exemplary costs payable by the appellant to the Respondent No.1 Bank;

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6. Pass any other order which this Hon’ble Tribunal deems fit and proper in the interest of justice.

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Learned Sr. counsel for the respondent bank has submitted that as per the interim arrangement made on 25.01.2023, the inventory and valuation of the stock was carried out by the valuers in Karol Bagh as well as in South Extension showrooms of the appellant and the situation is quite alarming for the reason that in the Karol Bagh showroom, the stock as shown on 30.11.2022 as per the statement filed on 04.01.2023, the quantity of gold was approx 112 Kg whereas after preparation of inventory, it has been found that it is approx 45.4 Kg now. Thus, the stock-wise quantity of gold has come down by 59.51% and value-wise it has come down by 52.65%. So far as the inventory of diamonds is concerned, it was 21292 carat which after preparing the inventory, has come down to 8536carat. So far as diamonds are concerned, the carat wise, it has come down to 59.90% and value-wise it has come down by 88.93%.

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Similar is the position with regard to the stock in respect of South Extension showroom. According to the learned Sr. counsel for the respondent, the value of the stock of gold was 85.3 kg approx as on 30.11.2022 as per report dated 04.01.2023, which has now found to be 35.89 kg approx. Thus, stock wise it has come down to 57.29% and value wise it has come down by 50.83%. So far as diamonds are concerned, it was 12356.62 carat as on 30.11.2022 (statement filed on 4.1.2023) which has now come down to 7767.93 carat. Thus, carat wise, it has come down to 37.13% and value wise it has come down to 84.10%.

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Ld. Sr. Advocate, therefore, prays that since there is huge deficiency in stocks and valuation, the bank’s interest needs to be protected and, therefore, the Receivers may be allowed to prepare the inventory and valuation of stock of all the 28 showrooms as ordered by Ld. DRT. He further states that the loan

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amount of State Bank of India is to the tune of approx Rs.1160 crores and total loan amount of consortium is approx Rs.3500 crores and he, therefore, prays that DRT order be implemented immediately so that the stock which is in existence at present stands protected.

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Ld. Counsel for the appellant has opposed the said prayer and submits that this matter is already listed on 01.02.2023 and he will like to file reply to the above I.A. and will explain the alleged deficiency in stock as claimed by the respondent bank.

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I have considered the rival submissions. Let reply be filed by the appellant by 01.02.2023. Till then, it will be in the interest of justice to protect the gold, diamonds i.e. stock as well as loan of State Bank of India which is to the tune of Rs.1160 crores (and the total loan amount of consortium which is Rs.3500 crores) and it is, therefore, ordered that all the 28 showrooms as enumerated in the order of Ld. DRT will remain closed till further orders and let the bank depute its security guards in all the 28 showrooms to ensure that no stock is taken in or out.

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Let inventory as well as valuation report conducted till today be filed by tomorrow i.e. 31.01.2023.

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List on 01.02.2023 for reply of the application and argument thereupon.

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( CHAIRPERSON )

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

Case brief

What is this about?

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

Case brief

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