Dismissed

Claudia Stephen v. the Federal Bank Ltd.

Kerala HC25 Nov 2016OP (DRT)/70/2014

Case brief

AI extract

What is this about?

The High Court of Kerala rejected the petitioner's plea to keep in abeyance the Debt Recovery Tribunal proceedings under Section 31A. The court held that while parties can submit materials regarding the company court settlement scheme, the bank should proceed to issue the recovery certificate and apply any adjustments subsequently.

What did the court decide?

Original petition closed; proceedings before DRT not stayed; Bank to file statement of Administrator's payments for adjustment.

Claudia Stephen Vs the Federal Bank Ltd. — Company and Corporate | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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FRIDAY, THE 25TH DAY OF NOVEMBER 2016/4TH AGRAHAYANA, 1938

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OP (DRT).No. 70 of 2014 (O)

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OA.NO. 117/2014 OF DEBT RECOVERY TRIBUNAL, ERNAKULAM

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PETITIONER(S)/DEFENDANTS 1 TO 3:

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1. CLAUDIA STEPHEN, W/O.STEPHEN JOSEPH, KATTUNILATHU HOUSE, B M R A-59, EDAPPALLY,

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KOCHI-682 024.

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2. LANSEN JOSEPH, S/O.AUGUSTINE JOSEPH, KURISHINKAL HOUSE, HOUSE NO.X/706-A, AMARAVATHY, COCHIN-682 001.

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3. K.S.STEPHEN JOSEPH, S/O.K.S.STANLEY JOSEPH, KATTUNILATHU HOUSE, B M R A-59, EDAPPALLY, KOCHI-682 024.

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BY ADVS.SRI.BABU CHERUKARA SRI.P.T.JAVALIN JOSEPH

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RESPONDENT(S)/APPLICANT:

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1. THE FEDERAL BANK LTD., REGISTERED OFFICE: ALUVA, BRANCH: ERNAKULAM/MARINE DRIVE, ERNAKULAM DISTRICT, PIN-682 031.

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2. APPLE A DAY PROPERTIES (P) LTD., APPLE TOWER, PADIVATTOM, N.H.BYE PASS, EDAPPALLY, COCHIN-682 024, REPRESENTED BY THE ADMINISTRATOR APPOINTED BY THE HIGH COURT OF KERALA.

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R1 BY ADVS. SRI.REJI GEORGE

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SRI.GOPAKUMAR G. (ALUVA) SRI.BINOY DAVIS R2 BY ADV. SRI.VINOD MADHAVAN

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THIS OP (DEBT RECOVERY TRIBUNAL) HAVING BEEN FINALLY HEARD ON 25-11-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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sts

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OP (DRT).No. 70 of 2014 (O)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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P1: COPY OF SALE DEED NO.969/2008 OF ALANGAD SUB REGISTRY DATED 7.2.2008 EXECUTED BY THE BUILDER APPLE A DAY PROPERTIES LTD.

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P2: COPY OF THE JUDGMENT IN OS NO.250/2011 DATED 29.8.2013 OF THE ADDL. SUB COURT, NORTH PARAVUR.

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P3: COPY OF THE DECREE IN OS NO.250/2011 DATED 29.8.2013 OF THE ADDL. SUB COURT, NORTH PARAVUR.

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P4: COPY OF THE O.A.NO.117/2014 FILED BY THE 1ST RESPONDENT BEFORE THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM.

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P5: COPY OF THE COMMON ORDER DATED 10.3.2014 IN MCA NO.22/2013 ETC. OF THE HON'BLE HIGH COURT OF KERALA.

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RESPONDENT(S)' EXHIBITS

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R1(A): COPY OF THE SCHEME APPROVED BY THE HON'BLE COURT AS PER ORDER DATED 30/11/2013 IN M.C.A.NO.22/2013 ETC

/TRUE COPY/

P.A.TO JUDGE

sts

A.M. SHAFFIQUE, J.

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------------------------------------- O.P.(DRT) No.70 of 2014

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Dated this the 25^th day of November, 2016

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JUDGMENT

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This original petition is filed challenging Ext.P4 an application filed by the respondent Bank under Section 31 A of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

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Petitioners submit that they have entered into an agreement with the second respondent for purchasing an apartment, for which, they availed of a loan for 20 lakhs from₹ the first respondent. Necessary tripartite agreement has also been executed. It is stated that the second respondent had in addition to the advance amounts paid by the petitioners, received 7,30,605/- from the Bank. The second respondent₹ did not take any steps for the construction of the building and in the meantime, liquidation petition came to be filed before this Court against the second respondent, which ultimately

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O.P.(DRT) No.70 of 2014

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-2-

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resulted in an order being passed by the Company Court on 10.3.2014 by which certain formula of compromise had been approved for discharging the liabilities of the Company and the secured creditors.

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Petitioners submit that since the loan became outstanding, the Bank filed a suit as O.S.No.250 of 2011 before the Sub Court, North Parur, which was ultimately decreed. Pursuant to the decree, the Bank filed O.A.No.117 of 2014 under Section 31 A for the issuance of a certificate of recovery on the basis of the decree, which is pending consideration.

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The apprehension expressed by the petitioners is that while the settlement formula and scheme of adjustments approved by the Company Court is now taken care of by the Administrator appointed by the Company Court, it will not be appropriate on the part of the respondent Bank to recover any amount from the petitioners. It is stated that other than constructing the basement, the second respondent did not do

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O.P.(DRT) No.70 of 2014

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anything further and this is an instance where the petitioners had lost their money and the right to the property.

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Counter affidavit has been filed by the first respondent inter alia stating that out of the loan amount of Rs.20 lakhs, petitioners availed a sum of 7,30,605/- which₹ was acknowledged by them as per the letter dated 3.9.2010. Since there was substantial delay in payment of the amount, the suit was filed for recovering the said amount. It is therefore submitted that the aforesaid decree debt has to be satisfied by the petitioners. Further, it is contended that the liability of the Company under the decree in O.S.No.250 of 2011 is not covered by the scheme of settlement arrived at between the parties in the company petition. It is further submitted that provisions had been made in the scheme to discharge the liabilities to the secured creditors, 220 allottees of the company etc. Further it is stated that the second respondent had availed of a loan of Rs.9.50 Crores from the first respondent Bank and the said liability is also pending.

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O.P.(DRT) No.70 of 2014

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Having regard to the aforesaid factual situation, I do

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not think that there is any necessity to keep in abeyance the proceedings that are pending consideration before the Debts Recovery Tribunal. If the petitioners have a case that their settlement is also covered by the judgment of this Court in Company Petition No.4 of 2014 and other cases, which was decided on 10.3.2014, at the stage of enquiry when Ext.P4 application is considered, it shall always be open for the petitioners to place on record sufficient materials to defend the said proceedings. If such materials are placed before the Debts Recovery Tribunal, the same shall also be taken into consideration before issuing a certificate in favour of the respondent Bank. Hence, I do not think it necessary to keep the matter in abeyance. If any payment has been made by the Administrator on account of the respondent Bank which is to be adjusted towards the loan account of the petitioners herein, the same shall be given proper adjustment. The Bank shall file a statement in that regard before the Debts Recovery

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O.P.(DRT) No.70 of 2014

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Tribunal in O.A.No.117 of 2014. The Debts Recovery Tribunal shall also take note of the developments by which the Administrator had tried to settle the issue based on the judgment aforesaid.

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With the above observation, this original petition is closed.

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Sd/A.M. SHAFFIQUE

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JUDGE

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Scl/26.11.2016

Claudia Stephen v. the Federal Bank Ltd.

Case brief

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Claudia Stephen v. the Federal Bank Ltd.

Case brief

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