Dismissed

Canara Bank v. M/S.Annam Steels Pvt. Ltd.

Kerala HC17 Jun 2016WP(C)/14674/2016

Case brief

AI extract

What is this about?

Banks, as financiers and mortgagees, sought writ relief directing government authorities to release acquisition compensation amount directly to them instead of the landowner guarantor. The High Court held that no formal land acquisition proceedings were pending and the transaction was a negotiated purchase, precluding the Special Tashildar's jurisdiction. The petition was dismissed with leave to t

What did the court decide?

Writ petition dismissed; third respondent (Special Tashildar) restrained from disbursing amount for 15 days pending banks' approach to Debt Recovery Tribunal for garnishee proceedings.

Canara Bank Vs M/S.Annam Steels Pvt. Ltd. — Contract and Commercial Disputes | 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 17TH DAY OF JUNE 2016/27TH JYAISHTA, 1938

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WP(C).No. 14674 of 2016 (H)

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PETITIONER(S) :

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1. CANARA BANK, CHEROOTY ROAD BRANCH, CALICUT, REPRESENTED BY ITS CHIEF MANAGER.

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2. M/S.PUNJAB NATIONAL BANK, BANK ROAD, KOZHIKODE, REPRESENTED BY ITS CHIEF MANAGER.

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BY ADV. SRI.C.AJITH KUMAR

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RESPONDENT(S) :

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1. M/S. ANNAM STEELS PVT. LTD., CORPORATE OFFICE, 11/40E, FASHION TOWER, CHEROOTY ROAD, KOZHIKODE, REPRESENTED BY ITS MANAGING DIRECTOR, E.T.FIROZ.

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2. M/S. PLENTY LAND DEVELOPERS LLP WITH REGISTERED OFFICE AT 41/2299, 3RD FLOOR, MALABAR GATE, RAM MOHAN ROAD, PUTHIYARA POST, KOZHIKODE, REPRESENTED BY DESIGNATED PARTNER, NISHAD A.K., PIN-673 001.

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3. THE SPECIAL TASHILDAR (LA NO.1), KOCHI METRO RAIL PROJECT, CIVIL STATION, KAKKANAD, KOCHI-30.

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4. KOCHI METRO RAIL LTD., 8TH FLOOR, REVENUE TOWER, PARK AVENUE, KOCHI-682 011, REPRESENTED BY ITS MANAGING DIRECTOR.

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5. STATE OF KERALA, REVENUE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY.

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6. THE DISTRICT COLLECTOR, COLLECTORATE, CIVIL STATION, KAKKANAD, KOCHI-30.

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R2 BY SRI.DEVAN RAMACHANDRAN (SENIOR ADVOCATE)

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ADVS. SRI.K.M.ANEESH

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SRI.K.SANTHOSH KUMAR (KALIYANAM) SRI.ADARSH KUMAR SRI.BIJU VARGHESE ABRAHAM

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R3, R5 & R6 BY ADV. GOVERNMENT PLEADER SMT. LILLY.K.T R4 BY SRI.K.JAJU BABU (SENIOR ADVOCATE) ADV. SMT.M.U.VIJAYALAKSHMI, S.C

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17-06-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 14674 of 2016 (H)

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APPENDIX

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PETITIONER(S)' EXHIBITS :

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P1.	TRUE COPY OF THE SANCTION MEMORANDUM DATED 03/06/2013 OF THE 1ST PETITIONER.
P2.	TRUE COPY OF THE SANCTION MEMORANDUM DATED 26/06/2013 OF THE 2ND PETITIONER.
P3.	TRUE COPY OF THE NOTICE DATED 23/12/2015 ISSUED BY THE 1ST PETITIONER U/S. 13(2) OF THE SARFAESI ACT.
P4.	TRUE COPY OF THE NOTICE DATED 17/11/2015 ISSUED BY THE 2ND PETITIONER UNDER SECTION 13(2) OF THE SARFAESI ACT.
P5	TRUE PHOTOCOPY OF THE LETTER EVIDENCING DEPOSIT OF TITLE DEEDS DATED 14/09/2013 EXECUTED BY THE 2ND RESPONDENT IN FAVOUR OF THE 1ST PETITIONER , CREATING SECURITY INTEREST IN RESPECT OF THE PROPERTY MENTIONED AS SL.NO.2 OF ITEM II COVERED BY THE EXT.P3 AND P4.
P6	TRUE COPY OF THE RESOLUTION PASSED BY THE MEETING THE DESIGNATED PARTNERS OF THE 2ND RESPONDENT ON 28/08/2013.
P7	TRUE COPY OF THE LLP FORM NO.3 OF THE 2ND RESPONDENT EVIDENCING THE DETAILS OF THE DESIGNATED PARTNERS.
P8	TRUE COPY OF THE NOTICE NO.A1-31/12 DATED 30/03/2015 ISSUED BY THE 3RD RESPONDENT TO THE 2ND RESPONDENT.
P9	TRUE COPY OF THE LETTER DATED 08/06/2015 ISSUED BY THE 3RD RESPONDENT TO THE 2ND RESPONDENT.
P10	TRUE COPY OF THE LETTER DATED 15/09/2015 ISSUED BY THE 1ST PETITIONER TO THE 3RD RESPONDENT.
P11	TRUE COPY OF THE LETTER DATED 15/09/2015 ISSUED BY THE 1ST PETITIONER TO THE 2ND RESPONDENT.
P12	TRUE COPY OF THE LETTER DATED 18/01/2016 ISSUED BY THE 1ST PETITIONER TO THE 3RD RESPONDENT.
P13	TRUE COPY OF THE LETTER DATED 18/01/2016 ISSUED BY THE 1ST PETITIONER TO THE 6TH RESPONDENT.
P14.	TRUE COPY OF THE LETTER DATED 19/03/2016 ISSUED BY THE 2ND PETITIONER TO THE 3RD RESPONDENT.
RESPON	DENT(S)' EXHIBITS : NIL

//TRUE COPY//

Msd.

P.S.TO JUDGE.

A.M. SHAFFIQUE, J.

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W.P.(C) No. 14674 of 2016

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Dated this the 17^th day of June, 2016

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JUDGMENT

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Petitioners are the consortium of Banks, of which first petitioner being the leader Bank financed first respondent's term loan facilities in connection with the contract awarded to the to the first respondent by Kochi Metor Rail Ltd (KMRL). It is stated that the second respondent was a guarantor, who had mortgaged certain item of property having an extent of 1 acre 11 cents. The loan became outstanding and in the meantime, steps were taken by the fourth respondent to acquire the land belonged to the second respondent. On knowing about the fact that an acquisition proceedings were going on, petitioners made a claim before the third and the sixth respondents. According to the petitioners, though the second respondent and the fourth respondent had arrived at an arrangement regarding the price to be fixed for acquistion the claim of the petitioners are not being considered. The

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W.P.(C) No. 14674 of 2016

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-2-

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petitioners also submitted Exts.P12 to P14 requesting the Special Tahasildar to pay the amount due to the second respondent to the petitioners on account of mortgage created in their favour. It is contended that the petitioners have a first charge over property and therefore any compensation payable by the second respondent is to be paid to the petitioners.

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The learned counsel appearing for the second respondent submits that so far no proceeding had been initiated by respondents 3 to 6 for issuing any notification under the Land Acquisition Act, 1894 or the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. However, it seems that the possession has been taken over by the fourth respondent and so far the petitioners have not been given any consent regarding the compensation to be paid in that regard.

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Learned counsel appearing for the fourth respondent submits that the land has been taken on the basis of price fixed by the District Level Purchase Committee and

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W.P.(C) No. 14674 of 2016

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-3-

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the issues are being finalized as the matter stands now.

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A statement has been filed on behalf of the third respondent. Learned Government Pleader submits that there is some controversy regarding the aforesaid acquisition. The Bank had not produced any document to the third respondent's office. That apart, one Sri.Abdul Jaleel submitted a petition alleging that the managing partner has no right in the land pledged to the Bank. It is stated that the parties were heard on 15.4.2016 and a final decision will be taken only after disposal of this case.

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After hearing learned counsel on either side, it is

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evident that there is no proceeding either under the Land Acquisition Act or the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It seems that the Government authorities had entered into negotiated purchase as per Government Order dated 22.5.2014. Under such

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circumstances, it can only be termed as an arrangement

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W.P.(C) No. 14674 of 2016

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-4-

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among the parties. For the same reason, the Tahasildar may not have any jurisdiction to consider the claims of the petitioners. If the petitioners' Bank have any contention that the amount is liable to be attached, their remedy is to approach the competent Court/Tribunal and seek appropriate garnishee proceedings.

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Taking into consideration the aforesaid fact situation, I do not think that any direction can be issued in this writ petition.

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Therefore, the writ petition is dismissed, reserving the right of the petitioners' Bank to approach the Court/Debt Recovery Tribunal and seek appropriate garnishee proceedings. The third respondent shall not disburse any amount, if not already disbursed, for a period of fifteen days to enable the petitioners' Bank to approach the Court/Debt Recovery Tribunal to obtain appropriate orders.

Sd/-

A.M. SHAFFIQUE

JUDGE

Scl/17.06.2016

Canara Bank v. M/S.Annam Steels Pvt. Ltd.

Case brief

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Canara Bank v. M/S.Annam Steels Pvt. Ltd.

Case brief

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