High Court dismissed a petition seeking stay of DRT proceedings pending an appeal before the DRT Appellate Tribunal, finding no prima facie case and excessive delay.
Original petition seeking direction to keep DRT proceedings in abeyance is dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
TUESDAY, THE 21ST DAY OF JUNE 2016/31ST JYAISHTA, 1938
OP (DRT).No. 154 of 2015 (O)
----------------------------SA. NO.450/2012 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM.
PETITIONER(S):
1. M/S.SHREYAS (ERNAKULAM), 40/1739, EKM MERCHANTS ROAD, ERNAKULAM, KOCHI- 31, REPRESENTED BY ITS MANAGING PARTNER P.VALSARAJ.
2. P.VALSARAJ, S/O.MR.P. KELU, 41/429A, JAYANTHY, BEHIND HOTEL SUN INTERNATIONAL, MARAYIL LANE, RAJAJI ROAD, ERNAKULAM, KOCHI- 682 035.
3. B.JAYANTHI, W/O.P. VALSARAJ, 41/429A, JAYANTHY, BEHIND HOTEL SUN INTERNATIONAL, MARAYIL LANE, RAJAJI ROAD, ERNAKULAM, KOCHI -682 035.
4. NEERAJ VALSARAJ, S/O.P. VALSARAJ, 41/429A, JAYANTHY, BEHIND HOTEL SUN INTERNATIONAL, MARAYIL LANE, RAJAJI ROAD, ERNAKULAM, KOCHI- 682 035.
BY ADVS.SRI.R.LAKSHMI NARAYAN,
SMT.R.RANJINI.
RESPONDENT(S):
STATE BANK OF TRAVANCORE, STRESSED ASSET RESOLUTION CENTRE, ERNAKULAM SBT BHAVAN, PANAMPILLY NAGAR, ERNAKULAM, KOCHI -36, REPRESENTED BY ITS AUTHORISED OFFICER.
BY ADVS. SRI.SANTHOSH MATHEW, SC, SRI.SATHISH NINAN.
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 21-06-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
rs.
OP (DRT).No. 154 of 2015 (O)
APPENDIX
PETITIONER'S EXHIBITS:-
RESPONDENT'S EXHIBITS:- NIL.
//TRUE COPY//
P.S. TO JUDGE
rs.
A.M. SHAFFIQUE, J.
=============
OP (DRT) No. 154 of 2015
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Dated this, the 21st day of June, 2016
J U D G M E N T
This Original Petition is filed for a direction to the Debts Recovery Tribunal, Ernakulam to keep in abeyance all further proceedings in SA No.450/12 until the Debt Recovery Appellate Tribunal, Chennai considers Ext.P10 appeal.
2.48 crores and that the said account could not be classified or treated as Non Performing Asset. The amendment application was filed further pointing out that the petitioners are not liable to pay to the respondent Bank amount of 1,66,46,879/-, which according to the petitioners have been wrongly debited to the cash creditOP(DRT) No.154/15
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account of the first petitioner's firm. The Tribunal after considering the rival contentions observed that there was no infirmity of any nature either in the classification of the loan account as NPA or the subsequent actions taken by the Bank. On that basis, the application for amendment has been rejected.
OP(DRT) No.154/15
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statement in the Original Application filed by the Bank before the Debts Recovery Tribunal and the same was allowed. Therefore, there is no rationale for not allowing the amendment application filed in the Securitisation Application.
OP(DRT) No.154/15
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“13. Enforcement of security interest - (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by
OP(DRT) No.154/15
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such creditor in accordance with the provisions of this Act.”
The very fact that the Bank can enforce security interest created in its favour without intervention of Court or Tribunal clearly indicates that the question of consideration of the liability need not be gone into in a petition under Section 17 of the Act. The procedure prescribed under Section 13 relates to notice being issued under Section 13(2) in which the borrower is entitled to file a reply and that the representation has to be considered and reply has to be given by the secured creditor under Section 13 (3A) of the Act. Therefore, the question of liability is a matter which is borne out by the reply of the Bank and when the Bank comes to such a conclusion, it shall always be open for the Bank to further proceed and take steps under Section 13(4) of the Act. Section 17 of the Act gives power to any person including the borrower aggrieved by the measures in sub section (4) of Section (13) taken by the secured creditor. Therefore, the right under Section 17 is limited to the exercise of power under Section 13(4) of the Act.
OP(DRT) No.154/15
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amendment application of the petitioners. That apart, application has been considered on merits and all contentions urged between the parties were considered. When there is no prima facie case that exists for this Court to exercise jurisdiction, I do not think that this Court will be entitled to exercise any power at this stage of the proceedings. However, it shall always be open for the Appellate Tribunal to consider the matter afresh untramelled by any of the observations made herein.
Hence, reserving right of the petitioners to approach the Appellate Tribunal for necessary orders, this original petition is dismissed.
Sd/- A.M. SHAFFIQUE, JUDGE
Rp21/06/2016
//True Copy//
P.S to Judge
2 issues framed by the court
Whether the High Court should stay proceedings before the Debt Recovery Tribunal pending an appeal before the Debts Recovery Appellate Tribunal.
Whether the Tribunal committed error in rejecting the petitioners' application to amend pleadings regarding asset classification and liability.
3 provisions across 2 enactments
M/S.SHREYAS (ERNAKULAM) AND Others
STATE BANK OF TRAVANCORE
A.M. SHAFFIQUE
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court