Disposed

M/S Metalex Steel Strips Private Ltd. v. the Authorized Officer

Karnataka HC26 Jun 2024WP/583/2023

Case brief

AI extract

What is this about?

The Court disposed of a writ petition seeking refund of sale proceeds after DRT proceedings were dismissed, directing parties to appear before the DRT to file an application for refund, reserving liberty for the bank to object, and directing the Tribunal to decide within one month.

What did the court decide?

Direction to file refund application before DRT; DRT to decide within one month.

M/S Metalex Steel Strips Private Ltd. Vs the… — Banking and Recovery | Karnataka HC (2024)

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NC: 2024:KHC:23732 WP No. 583 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26^TH DAY OF JUNE, 2024 BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 583 OF 2023 (GM-DRT)

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BETWEEN:

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M/S METALEX STEEL STRIPS PRIVATE LTD A PRIVATE LIMITED COMPANY PLOT NO 158-159 (P) KIADB INDUSTRIAL AREA BOMMASANDRA JIGNI LIN ROAD BENGALURU - 562106 REP. BY ITS DIRECTOR MR SANJAY BHANDARI (REGISTERED UNDER COMPANIES ACT 2013)

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…PETITIONER

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(BY SRI. BHARATH KUMAR V, ADVOCATE)

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AND:

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Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

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THE AUTHORIZED OFFICER AND ASSISTANT GENERAL MANAGER PUNJAB NATIONAL BANK BENGALURU CITY BRANCH VOKKALIGARA SANGHA BUILDING HUDSON CIRCLE BENGALURU – 560 027.

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SRI JEETENDRA GANDHI S/O LATE K.L. GANDHI PROP. M/S. GANDHI IRON AND STEEL NO. 44/1, NEW GANGAMMACHARI STREET MOTINAGAR, CITY MARKET BANGALORE - 560 002.

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…RESPONDENTS

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(BY SRI. T P MUTHANNA, ADVOCATE FOR R1; R2 IS SERVED BUT UNREPRESENTED)

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THIS WP FILED UNDER THE ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE R1 TO COMPLY WITH THE FINAL ORDER DATED 21.08.2017 IN T.S.A., NO.47/2017 (S.A.NO.376/6-DRT-1) ANNEXURE-A PASSED BY THE DEBT RECOVERY TRIBUNAL-11, BENGALURU AND

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NC: 2024:KHC:23732 WP No. 583 of 2023

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CONSEQUENTLY REFUND A SUM OF RS.1,41,11,480/- (RUPEES ONE CRORE FORTY ONE LAKHS ELEVEN THOUSAND FOUR HUNDRED EIGHTY ONLY) TO THE PETITIONER AS REFUND OF SALE PRICE AND OTHER INCIDENTAL EXPENSES, ALONG WITH AN INTEREST OF 12 PERCENT FROM 29.08.2016 AND ETC.,

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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In this petition, the petitioner seeks the following reliefs:

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“i) Issue writ in the nature, of Mandamus or any other appropriate writ, order or direction directing the RespondentNo.1 to comply with the Final Order dated 21.08.2017 in T.S.A. No.47/2017 (S.A.No.376/16-DRT-1) Annexure-A, passed by the Hon’ble Debt Recovery Tribunal-11, Bengaluru and consequently refund a sum of Rs.1,41,11,480/- (Rupees One Crore Forty One Lakhs Eleven Thousand Four Hundred Eighty Only) to the petitioner as refund of sale price and other incidental expenses, along with an interest of 12% from 29.08.2016.

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ii. Issue a writ in the nature of mandamus or any other writ, order or direction directing the respondent No.1 herein to ensure cancellation of the sale certificate dated 29.08.2016 executed by the Respondent No.1 in favour of the Petitioner and registered as Document No.RJN-102479-2016-17 INBOOK No.1 and stored in CD No.RJND296 with the office of Sub-Registrar, Rajajinagar, Bengaluru (Annexure-B).

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iii. To grant such other and further relief so as to cost of the proceedings as this Hon’ble Court deems fit in the

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NC: 2024:KHC:23732 WP No. 583 of 2023

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circumstances of the case in the interest of justice and equity.”

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Heard learned counsel for the petitioner and learned counsel for respondent No.1 and perused the material on record.

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In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner invited my attention to the order dated 20.12.2023 passed in W.P.No.9467/2023 in order to contend that pursuant to said order, which remanded the matter to DRT, the proceedings initiated in TSA No.47/2017 (SA No.376/2016) filed by respondent No.2-borrower was dismissed by the Debt Recovery Tribunal (DRT) vide order dated 19.02.2024. It is the grievance of the petitioner that despite the petitioner/auction purchaser requesting the DRT to refund the amount paid by him to respondent No.1-Bank by placing reliance upon the liberty reserved in his favour by this Court in his favour, the DRT is not refunding the amount in favour of the petitioner, who is before this Court by way of the present petition.

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3.1 In support of his contentions, learned counsel for the petitioner relied upon the following decisions:

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NC: 2024:KHC:23732 WP No. 583 of 2023

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i. M/s. Paramount Constructions Company Vs. The Authorised Officer & Chief Manager and others – W.P.No.33034/2019 dated 28.07.2023 passed by a Coordinate Bench of this Court.

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ii. S. Shanmuganathan Vs. The Authorized Officer, Indian Overseas Bank – W.P.No.39199/2016 dated 28.04.2017 passed by the Hon’ble High Court of Judicature at Madras.

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Per contra, learned counsel for respondent No.1-Bank does not dispute that pursuant to the order or remand, the proceedings before the DRT initiated by respondent No.2-borrower had been dismissed. It is pointed out that an amount of Rs.2,46,29,865/- deposited by respondent No.1 before this Court during the pendency of W.P.No.9467/2023 has still remained in deposit before this Court and has not been transferred to the DRT. It is also submitted that in the event the petitioner files an application seeking refund before the DRT, respondent No.1 may be is reserved liberty to file objections to the said application, which could be considered by the Tribunal in accordance with law.

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4.1 In support of his contentions, learned counsel for

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respondent No.1 relied upon the judgment of the Apex Court in the

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NC: 2024:KHC:23732 WP No. 583 of 2023

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case of Eva Agro Feeds Private Limited v. Punjab National Bank and Anr. – AIR OnLine 2023 SC 727 .

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4.2 Learned counsel for respondent No.1-Bank submits that though an application seeking release of the said amount has been filed by respondent No.1 in W.P.No.9467/2023, respondent No.1 shall not press the said application till disposal of the said application to be filed before the DRT.

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In view of the aforesaid facts and circumstances, I deem it just and appropriate to dispose of this petition by issuing certain directions.

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In the result, I pass the following:

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ORDER

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i) The Writ Petition is disposed of.

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ii) Both petitioner and respondent No.1 are directed to appear

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before the DRT in TSA No.47/2017 (SA No.376/2016) on 19.07.2024.

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iii) On that day i.e., on 19.07.2024, the petitioner is permitted to

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file an application seeking refund of the amount of Rs.2,46,29,865/- (Rupees Two Crores Forty Six Lakhs Twenty Nine Thousand Eight Hundred and Sixty Five only) deposited by respondent No.1-Bank before this Court in

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NC: 2024:KHC:23732 WP No. 583 of 2023

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W.P.No.9647/2023, in view of the liberty granted in his favour in W.P.No.9647/2023.

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iv) Upon the petitioner filing such an application on 19.07.2024, liberty is reserved in favour of respondent No.1 to file objections and contest the said application.

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v) It is directed that pursuant to the petitioner filing an application and the concerned respondent filing objections to the same, the DRT shall provide sufficient and reasonable opportunity to both parties and consider and pass appropriate orders on the same, within a period of one month from 19.07.2024, bearing in mind the judgments relied upon by both sides.

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vi) It is further directed that till disposal of the said application by the DRT, respondent No.1 shall not precipitate the application filed in W.P.No.9467/2023 before the Hon’ble Division Bench.

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vii) All rival contentions are kept open and no opinion is expressed on the same.

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Sd/JUDGE

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BMC

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List No.: 1 Sl No.: 26

M/S Metalex Steel Strips Private Ltd. v. the Authorized Officer

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M/S Metalex Steel Strips Private Ltd. v. the Authorized Officer

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