Dismissed

Moon Fishery (India) Private Limited v. the Authorised Officer

Kerala HC29 Sept 2016WP(C)/11768/2015

Case brief

AI extract

What is this about?

The petitioner challenged a rejection of its proposal to regularise an NPA term loan account and sought directions to remit excess amounts. The Court held it could not interfere with contractual obligations of a Bank to regularise an account where a huge liability remained outstanding and no viable proposal existed.

What did the court decide?

The writ petition seeking direction to regularise the loan account and remit excess amounts was dismissed.

Moon Fishery (India) Private Limited Vs the… — Insolvency and Bankruptcy | 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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THURSDAY, THE 29TH DAY OF SEPTEMBER 2016/7TH ASWINA, 1938

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WP(C).No. 11768 of 2015 (U)

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PETITIONER(S):

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MOON FISHERY (INDIA) PRIVATE LIMITED,

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G-107, 1ST FLOOR, PANAMPILLY NAGAR P.O., ERNAKULAM, PIN-682 036, REPRESENTED BY ITS MANAGING DIRECTOR, MR. DOMINIC SEBASTIAN.

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BY ADV. SRI.ALIAS M.CHERIAN

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RESPONDENT(S):

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1. THE AUTHORISED OFFICER, SYNDICATE BANK, PIONEER TOWERS, 1ST FLOOR, SHANMUGHAM ROAD BRANCH, ERNAKULAM, PIN-682 031.

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2. SYNDICATE BANK, PIONEER TOWERS, 1ST FLOOR, SHANMUGHAM ROAD BRANCH, ERENAKULAM, PIN-682 031, REPRESENTED BY ITS BRANCH MANAGER.

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BY ADV. SRI.R.S.KALKURA

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29-09-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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msv/

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WP(C).No. 11768 of 2015 (U)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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EXT.P1. TRUE COPY OF LETTER NO. EIA/KOC/FFP/FD/767/2012-13/882 DATED 26-4-2012.

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EXT.P2.TRUE COPY OF LETTER NO. EIA/KOC/FFP/FD/767/2012-13/882 DATED 01-05-2012.

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EXT.P3. TRUE COPY OF LETTER NO. EIA/KOC/FFP/FD/767/2012-13 DATED 14-08-2012.

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EXT.P4. TRUE COPY OF NOTICE NO. 354/4300/MOON/2014 DATED 15-09-2014.

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EXT.P5. TRUE COPY OF REPRESENTATION DATED 05-11-2014. EXT.P6. TRUE COPY OF REPRESENTATION DATED 11-11-2014. EXT.P7. TRUE COPY OF REPRESENTATION DATED 17-11-2014. EXT.P8. TRUE COPY OF NOTICE NO. 4300/374/771/246/PCL DATED 18-11-2014.

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EXT.P9. TRUE COPY OF REPRESENTATION DATED 09-01-2015. EXT.P10. TRUE COPY OF REPRESENTATION DATED 13-01-2015. EXT.P11. TRUE COPY OF REPRESENTATION DATED 10-2-2015. EXT.P12. TRUE COPY OF REPRESENTATION DATED 27-2-2015. EXT.P13. TRUE COPY OF REPRESENTATION DATED 4-3-2015. EXT.P14. TRUE COPY OF REPRESENTATION DATED 30-7-2015. EXT.P15. TRUE COPY OF REPRESENTATION DATED 24-8-2015. EXT.P16. TRUE COPY OF REPRESENTATION DATED 11-9-2015. EXT.P17. TRUE COPY OF REPRESENTATION DATED 28-5-2016. EXT.P18. TRUE COPY OF REPRESENTATION DATED 3-6-2016. EXT.P19. TRUE COPY OF REPRESENTATION DATED 23-7-2016. EXT.P20. TRUE COPY OF LETTER DATED 21-7-2016. msv/

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WP(C).No. 11768 of 2015 (U)

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EXT.P21. TRUE COPY OF LETTER DATED 30-8-2016. EXT.P22. TRUE COPY OF REPRESENTATION DATED 5-9-2016. EXT.P23. TRUE COPY OF THE LETTER DATED 7-9-2016. EXT.P24. TRUE COPY OF REPRESENTATION DATED 12-9-2016. EXT.P25. TRUE COPY OF SANCTION LETTER DATED 22-9-2013. EXT.P26. TRUE COPY OF STATEMENT OF ACCOUNT OF THE TERM LOAN FOR THE PERIOD 1-4-2015 TO 30-6-2015.

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RESPONDENT(S)' EXHIBITS

NIL

//TRUE COPY//

P.S.TO JUDGE

Msv/

A.M. SHAFFIQUE, J.

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W.P.(C) No. 11768 of 2015

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Dated this the 29^th day of September, 2016

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JUDGMENT

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This writ petition has been filed inter alia challenging Exts.P8, P12 and P13 and for a direction to regularise the loan account of the petitioner, by permitting the petitioner to remit the amount which exceeded the sanctioned limit of the credit

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facilities. Petitioner Company engaged in the seafood business has taken Packing Credit facility and other financial facilities including a term loan facility from the respondent Bank. All the accounts became NPA and therefore, the petitioner became a defaulter. When steps were taken under the SARFAESI Act to recover the amounts by issuing possession notice and the sale of the property ie; Exts.P12 and P13, this writ petition is filed, inter alia seeking for the aforesaid reliefs.

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Counter affidavit has been filed by respondents 1

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and 2 wherein it is stated that the petitioner is not entitled for

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any relief as sought for. According to the Bank, all the

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W.P.(C) No. 11768 of 2015

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accounts have become non-operational and the accounts had been treated as Non Performing Asset. Steps were taken by the Bank to take possession of the secured asset and effect sale of property. It is also submitted that the total amount payable by the petitioner as far as the term loan account is concerned would come to more than Rs.2.64 Crores and the cash credit limit has exceeded Rs.6.9 Crores. According to the Bank, the account cannot be regularised as the Unit is not viable. Further, it is submitted that though sufficient opportunities had been granted to repay the amount, no steps had been taken by the petitioner for discharging the liability.

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On the other hand, the learned counsel for the petitioner places reliance on an interim order dated 9.4.2015 by which this Court had stayed further proceedings on condition of the petitioner remitting Rs.20 lakhs on or before 30.4.2015, Rs.21 lakhs on or before 30.5.2015 and Rs.20 lakhs on or before 30.6.2015. It was further observed that on the petitioner paying Rs.41 lakhs pursuant to the order, the

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W.P.(C) No. 11768 of 2015

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respondent Bank shall regularise the term loan availed by the petitioner. The contention urged by the petitioner is that though the aforesaid amount had been paid, the term loan had not been regularised. That apart, the Bank has now issued Ext.P23 letter, informing the petitioner that the proposal for revival has been rejected and the petitioner was directed to pay the full dues as per demand notice dated 18.11.2014.

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It is not in dispute that as far as the relief sought for are concerned, it may not be possible for this Court to interfere as the scope of interference is very limited in respect of proceedings under the SARFAESI Act. The position of law has been well settled by the Apex Court in United Bank of India v.Satyawati Tondon and others [2010 (8) SCC

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110]. In regard to the request for regularising the account of the petitioner, it is still a matter of contract, which cannot be interfered by this Court. It is true that by virtue of an interim order dated 9.4.2015, this Court had directed the Bank to regularise the term loan account, if the amounts are paid in

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W.P.(C) No. 11768 of 2015

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time. Necessarily, the Bank was under obligation to comply with the said direction. But, as the matter stands now, it seems that the amount outstanding is substantial and there is no valid proposal agreed upon by the parties to settle the liability. Even according to the petitioner, there is no proposal to discharge the liability within a short time frame. Therefore, there is no reason why the Bank should be asked to desist from taking any further action under the SARFAESI Act. If interference is made by this Court in this matter, it would definitely hinder the right of the Bank to proceed further. In the interim order dated 9.4.2015, this Court had further observed that if the petitioner commits default in respect of the payments, it will be open for the respondent Bank to bring up the matter for further orders. It is submitted that after paying the amount as directed in the interim order dated 9.4.2015, no steps had been taken by the petitioner to regularise the term loan account by approaching the Bank. This fact has been disputed by the learned counsel for the

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W.P.(C) No. 11768 of 2015

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petitioner, who submits that after paying the aforesaid amount, the petitioner had approached the Bank for regularising the account.

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Be that as it may, I do not think that this is an instance where this Court should interfere and interfere with the contractual obligations/rights of the parties. Once the account had become NPA, unless there are special circumstances involved in the matter, it may not be possible for this Court to interfere in such contractual obligations and direct regularisation.

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Taking into account the aforesaid factual situation, I do

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not think that the petitioner has ventilated any grievance which requires interference by this Court, especially, in an instance where huge liability is outstanding.

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Writ petition is therefore dismissed.

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Sd/-

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A.M. SHAFFIQUE JUDGE

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Scl/29.09.2016

Moon Fishery (India) Private Limited v. the Authorised Officer

Case brief

What is this about?

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Moon Fishery (India) Private Limited v. the Authorised Officer

Case brief

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