Allowed

Idbi Bank v. Radhakrishnan Bhaskaran Vandothra

DRT21 Apr 2025OA/458/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application for issuing a Recovery Certificate based on a foreign judgment from the Dubai International Financial Centre Courts. The Tribunal rejected defenses regarding limitation, jurisdiction over the guarantor, and collateral security, ordering recovery of the decree amount plus interest and costs.

What did the court decide?

Issued Recovery Certificate for recovery of USD 19,432,741.17 plus interest and legal costs, and ordered sale of attached properties.

Idbi Bank versus Radhakrishnan Bhaskaran Vandothra — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 21^st day of April, 2025

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ORINGAL APPLICATION No.458/2023

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Between

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IDBI Bank Ltd., Registered office at: IDBI Tower, WTC Complex, Cuffe Parade, Mumbai – 400 005. DIFC Branch at Dubai, United Arab Emirates and IBU Gift City Branch, Gandhinagar, Gujarat, Represented by the General Manager and Head, IDBI Bank Ltd., IBU Gift City Branch, Unit No.1402, 14^th Floor, Signature Tower, Block 13, Road – 1C, Zone – 1, GIFT SEZ, Gift City, Gandhinagar, Gujarat – 382 355. …Applicant

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And

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Radhakrishnan Bhaskaran Vandothra, S/o.Koovayil Bhaskaran, Valanjavattom East P.O., Thiruvalla, Pathanamthitta District – 689 104. …Defendant

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OA 458/2023

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This Original Application having been heard on 11.04.2025 in the presence of Advocates M/s.Varughese Cherian and Jayakala S.S. for the applicant bank and Advocate Sri.Sasi N. for the defendant, and stood over to this day for consideration, the Tribunal delivered the following:-

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F I N A L O R D E R

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This is an application under S.31A of the Recovery of Debts and Bankruptcy Act, 1993 filed by the applicant bank for issuance of a Recovery Certificate in terms of the judgment dated 07.07.2020 in Claim No.CFI-085-2019 passed by The Court of First Instance, The Dubai International Financial Centre Courts, United Arab Emirates for recovery of the amount due thereunder.

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The applicant bank filed Claim No.CFI-085-2019 before The Court of First Instance, The Dubai International Financial Centre Courts, United Arab Emirates for recovery of amount due under the loan account and obtained judgment dated 07.07.2020 allowing it to recover the sum of USD 19,432,741.17 plus 9% interest per annum from the date of judgment i.e., 07.07.2020 until the date of full payment and legal costs in the amount of USD 40,000 from the

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OA 458/2023

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defendants therein jointly and/or severally. The defendant herein is the 5^th defendant in Claim No.CFI-085-2019 and personal guarantor to the loan availed by the firm ‘Eternity Petroleum Construction LCC’. According to the applicant bank, the defendants did not pay the amount due under the judgment/decree and it is entitled to get the amount of USD 19,432,741.17, the principal sum adjudged as due as on 07.07.2020 and USD 38,23,725 as the interest thereon @9% per annum from 07.07.2020 to 12.09.2022 and USD 40,000 as the costs awarded, totaling to USD 2,32,96,466.17 is due under the Judgment/decree as on 12.09.2022. The prayer is to issue Recovery Certificate in terms of the judgment/decree dated 07.07.2020 in Claim No.CFI-085-2019.

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The defendant filed written statement contending inter alia that the applicant bank has resorted to recovery proceedings against the guarantor without proceeding against the borrower company as well as the collateral securities. The OA is barred by limitation. No proceeding can be initiated in the OA in view of S.13(a) to 13(e) of the Code of Civil Procedure, 1908. The applicant is not disclosing the fact that the advance is secured by collateral

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OA 458/2023

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security equivalent to 100% of the advance. The foreign Court as well as this Tribunal are misguided by the deceitful averments by suppressing the fact of availability of 100% security for the advance. It is universally accepted that if any judgment is vitiated by fraud, it is against the spirit of law. The maxim makes it clear about fraud that Fraus Et Jus Nunquam Cohabitant’ i.e., justice and fraud can never go together. This defendant had never received any summons or intimation from the Court which passed the judgment and the applicant bank managed to get an exparte order from DIFC Court by concealing the fact that the loan was granted against collateral security. In the above backdrop, the OA is liable to be dismissed.

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At the time of arguments, learned counsel for the defendant contended that the decree was passed by The Court of First Instance, The Dubai International Financial Centre Courts against five persons and hence recovery certificate cannot be issued for recovery of the amount against only one person, who is the personal guarantor to the loan availed by the firm ‘Eternity Petroleum Construction LCC’. On the other hand, the learned

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OA 458/2023

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counsel for the applicant submitted that other defendants are residing in foreign countries and hence recovery certificate cannot be issued to realize the decree amount from them having their registered office situated outside the country. There is no illegality in seeking relief against the 5^th defendant/guarantor who is jointly and severally liable to pay the amount as per the decree.

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Heard arguments advanced by the learned counsel appearing on either side. On perusal of the judgment, it appears that the judgment was passed by The Court of First Instance, The Dubai International Financial Centre Courts for realisation of USD 19,432,741.17 plus 9% interest per annum from the date of judgment until the date of full payment and legal costs of USD 40,000 from the defendants therein jointly and/or severally. Hence there is no illegality to proceed against the only defendant residing within the territorial jurisdiction of this Tribunal and he is liable to pay the decree amount as awarded as he is jointly and/or severally liable to pay the same as per the decree.

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The OA was presented before the Tribunal 19.09.2022

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for execution of the judgment dated 07.07.2020 in Claim No.CFI-

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OA 458/2023

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085-2019 i.e., within the period of limitation from the date of judgment and hence the contention of the defendant that the OA is barred by limitation is untenable. The claim of the defendant that the loan is secured by 100% collateral security is not sustainable as the judgment does not provide for sale of any property. The defendant has failed to substantiate his claim/allegations made in the written statement. This Tribunal, being an executing court, cannot go beyond the judgment/decree and it is only authorized to pass order in issuing Recovery Certificate as per S.31A of the Recovery of Debts and Bankruptcy Act, 1993.

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A foreign judgement can be enforced in India if the judgment pertains to ‘superior court’ of a ‘reciprocating territory’ as notified by the Central Government in the Official Gazette. A reciprocating territory is defined in Explanation I to Section 44A of the Code of Civil Procedure, 1908 which reads as follows:-

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“Reciprocating territory” means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and “superior Courts”, with reference to any such territory, means such Courts as may be specified in the said notification.

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OA 458/2023

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The Central Government published a notification in the Gazette of India: Extraordinary dated 17.01.2020 vide G.S.R. 38(E), which reads as follows:-

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G.S.R. 38(E). —In exercise of the powers conferred by Explanation 1 to section 44A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares, United Arab Emirates to be a reciprocating territory for the purposes of the said section and the following Courts in United Arab Emirates to be superior Courts of that territory, namely:-

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(1) Federal Court-

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(a) Federal Supreme Court;

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(b) Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah,

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Ajman, Umm Al Quwain and Fujairah;

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(2) Local Courts-

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(a) Abu Dhabi Judicial Department;

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(b) Dubai Courts;

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(c) Ras Al Khaimah Judicial Department;

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(d) Courts of Abu Dhabi Global Markets;

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(e) Courts of Dubai International Financial Center.

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In the instant case, the judgment was passed by the Court of First

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Instance, Dubai International Financial Centre Court (which is a ‘Superior Court’ specified in the aforesaid notification), United Arab Emirates, which is declared to be a ‘reciprocating territory’ therein. In such premises, the judgment can be executed in India and the OA is maintainable before this Tribunal.

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OA 458/2023

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Here in this case at the time of passing the

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judgment/decree by the Dubai International Financial Court, the decreetal amount was USD 19,432.741.17. At the time of initiation of this proceeding, total recoverable amount as on 12.09.2022 is USD 2,32,96,466.17, which is inclusive of accrued interest and costs. In view of the discussion made above, this proceeding is maintainable in this forum and the Tribunal is empowered to issue Recovery Certificate for recovery of amount due under the judgment/decree.

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Along with the OA, the applicant bank filed IA No.3010/2022 seeking attachment of the properties scheduled thereto belonging to the defendant. The Tribunal vide order dated 18.09.2023 directed the defendant to show cause as to why he should not furnish security on 16.10.2023 but he failed to comply the direction. In such premises, attachment in respect of ‘A’ to ‘C’ schedule properties to the IA was ordered on 26.09.2024. Hence the applicant bank is entitled to recover the outstanding loan amount by sale of the properties attached under IA No.3010/2022.

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OA 458/2023

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In view of the above discussion, the applicant bank is entitled to get a final order directing to issue Recovery Certificate on the following lines:

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In the result, it is ordered to issue Recovery Certificate in terms of the judgment/decree dated 07.07.2020 in Claim No.CFI085-2019 passed by the Court of First Instance, The Dubai International Financial Centre Courts, United Arab Emirates, for recovery and payment to the applicant bank the amount of USD 19,432,741.17 plus 9% interest per annum from 07.07.2020 until the date of full payment and legal costs of USD 40,000 and also costs of the applicant bank in this proceeding from the defendant and by sale of ‘A’ to ‘C’ schedule properties attached under IA No.3010/2022.

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‘A’ to ‘C’ schedules to IA No.3010/2022 shall be appended to this final order.

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The applicant bank shall file memo of costs within ten days from the date of this final order.

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OA 458/2023

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Communicate copy of this order to both parties as

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provided in R.16 r/w R.2(c) of the Debts Recovery Tribunal

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(Procedure) Rules, 1993.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 21^st day of April, 2025)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

OA 458/2023 11

OA 458/2023 12

OA 458/2023

PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated the 21^st April, 2025

OA No.458/2023

Between

…Applicant

And

Radhakrishnan Bhaskaran Vandothra, S/o.Koovayil Bhaskaran, Valanjavattom East P.O., Thiruvalla, Pathanamthitta District. …Defendant

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F I N A L O R D E R

Idbi Bank v. Radhakrishnan Bhaskaran Vandothra

Case brief

What is this about?

What did the court decide?

Idbi Bank v. Radhakrishnan Bhaskaran Vandothra

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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