Dismissed

M/S. D.C. Mills v. State Bank of India

Kerala HC3 Aug 2016WP(C)/20364/2016

Case brief

AI extract

What is this about?

Writ petition challenging possession notice under SARFAESI Act filed by a Sick Industrial Company. Court held matter fits within BIFR proviso and is not fit for interference. Petition dismissed; sale confirmation stayed until 14.09.2016 to enable one-time settlement.

What did the court decide?

The writ petition was dismissed. Confirmation of sale shall not take place prior to 14.09.2016 to enable petitioner to avail the benefit of the other judgment.

M/S. D.C. Mills Vs State Bank of India — 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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WEDNESDAY, THE 3RD DAY OF AUGUST 2016/12TH SRAVANA, 1938

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WP(C).No. 20364 of 2016 (U)

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PETITIONER(S) :

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M/S. D.C. MILLS PVT.LTD., REGD. OFFICE BUILDING NO.134/1, VALAVANADU, KALAVUR P.O., ALAPPUZHA DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR.

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BY SRI. DEVAN RAMACHANDRAN (SENIOR ADVOCATE) ADV. SRI.V.S.AFSAL KHAN

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RESPONDENT(S) :

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THE AUTHORIZED OFFICER/STATE BANK OF INDIA, STRESSED ASSETS MANAGEMENT BRANCH, VANGARATH TOWERS, PALARIVATTOM BYPASS JUNCTION, KOCHI - 24.

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BY ADV. SRI.GEORGE THOMAS(MEVADA), S.C

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03-08-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Msd.

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WP(C).No. 20364 of 2016 (U)

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APPENDIX

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PETITIONER(S)' EXHIBITS :

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P1:	TRUE COPY OF THE CERTIFICATE OF AWARD IN INDIA INTERNATIONAL COIR FAIR 2001 FOR ACHIEVING THE FIRST POSITION IN EXPORTS OF COIR PRODUCTS.
P2:	TRUE COPY OF THE CERTIFICATE OF AWARD OF THE COIR INDUSTRY FOR THE YEAR 2005-2006.
P3:	TRUE COPY OF THE CERTIFICATE OF AWARD OF THE COIR FOR THE YEAR 2009-2010.
P4:	TRUE COPY OF THE CERTIFICATE OF AWARD OF THE COIR FOR THE YEAR 2012-2013.
P5:	TRUE COPY OF THE CERTIFICATE OF AWARD OF THE COIR FOR THE YEAR 2013-2014.
P6:	TRUE COPY OF THE LETTER DATED 20.03.2015 ISSUED BY THE REGISTRAR, BOARD FOR INDUSTRIAL, GOVERNMENT OF INDIA, NEW DELHI TO THE COMPANY.
P7:	TRUE COPY OF THE NOTICE DATED 28.08.2015 ISSUED BY THE BIFR.
P8:	TRUE COPY OF THE PROCEEDINGS DATED 15.09.2015 OF THE BIFR.
P9:	TRUE COPY OF THE NOTICE DATED 27.01.2016 UNDER SECTION 13(2) OF THE SARFAESI ACT ISSUED BY THE RESPONDENT TO THE COMPANY.
P10:	TRUE COPY OF THE OBJECTION DATED 23.03.2016 FILED BY THE PETITIONER.
P11:	TRUE COPY OF THE REPLY DATED 06.04.2016 ISSUED BY THE RESPONDENT BANK.
P12:	TRUE COPY OF THE MISCELLANEOUS APPLICATION NO.4760/2016 IN BIFR CASE NO.37/2015 BEFORE BIFR, NEW DELHI (BENCH-III).
P13:	TRUE COPY OF THE JUDGMENT DATED 26.05.2016 IN W.P.(C)NO.11989/2016 PASSED BY THIS HONOURABLE COURT.
P14:	TRUE COPY OF THE POSSESSION NOTICE DATED 10.06.2016 U/S.13(4) OF THE SARFAESI ACT.
P15:	TRUE COPY OF THE COMPROMISE APPLICATION DATED 13.06.2016.

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WP(C).No. 20364 of 2016 (U)

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P16: TRUE COPY OF THE DEMAND DRAFT NO.011335 DATED 13.06.2016. P17: TRUE COPY OF THE E-AUCTION NOTICE DATED 13.07.2016 ISSUED BY THE RESPONDENT BANK. P18: TRUE COPY OF THE LETTER NO.SAMB/EKM/2015-16/011 DATED 07.04.2015 ISSUED BY THE RESPONDENT BANK. P19: TRUE COPY OF THE JUDGMENT DATED 14.06.2016 IN W.P(C).NO.39218/2015.

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RESPONDENT(S)' EXHIBITS :

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EXHIBIT R(A):	TRUE PHOTOCOPY OF THE FORM A FILED BY THE PETITIONER BEFORE THE BIFR.
EXHIBIT R(A1):	TRUE PHOTOCOPY OF THE LETTER ADDRESSED BY THE PETITIONER COMPANY TO THE RESPONDENT BANK DATED 11.11.2015.
EXHIBIT R(B):	TRUE PHOTOCOPY OF THE BALANCE CONFIRMATION STATEMENT PERTAINING TO CA-OD A/C NO.10730064221 DATED 31.03.2015.
EXHIBIT R(B1):	TRUE PHOTOCOPY OF THE BALANCE CONFIRMATION STATEMENT PERTAINING TO EPC A/C NO.10730129134 DATED 31.03.2015.
EXHIBIT R(B2):	TRUE PHOTOCOPY OF THE BALANCE CONFIRMATION STATEMENT PERTAINING TO CASH CREDIT A/C NO.30068630544 DATED 31.03.2015.
EXHIBIT R(B3):	TRUE PHOTOCOPY OF THE BALANCE CONFIRMATION STATEMENT PERTAINING TO CASH CREDIT A/C NO.30144220430 DATED 31.03.2015.
EXHIBIT R(B4):	TRUE PHOTOCOPY OF THE BALANCE CONFIRMATION STATEMENT PERTAINING TO WORKING CAPITAL TERM LOAN A/C NO.30809263141 DATED 31.03.2015.
EXHIBIT R(B5):	TRUE PHOTOCOPY OF THE BALANCE CONFIRMATION STATEMENT PERTAINING TO TERM LOAN A/C NO.31235222132 DATED 31.03.2015.

//TRUE COPY//

P.A.TO JUDGE.

Msd.

A.M.SHAFFIQUE, J.

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W.P.(C).No.20364 of 2016

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----------------------------------- Dated this the 3^rd day of August, 2016

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J U D G M E N T

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This writ petition has been filed challenging Ext.P14 notice issued under Section 13(4) of the SARFAESI Act, 2002 (hereinafter referred to as 'the Act' for short).

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The main reason for challenging Ext.P14 notice was that the petitioner company is declared to be a Sick Industrial Company and the matter is pending consideration before the Board for Industrial and Financial Re-construction (BIFR) as case No.37/2015. The aforesaid issue is very much covered by the statutory provision itself, that is the 3^rd proviso to Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The 3^rd proviso reads as under :

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“Provided also that on or after the commencement of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, where a reference is pending before the Board for Industrial and Financial Reconstruction, such reference shall abate if the secured creditors, representing not less that three-fourth in value of the amount outstanding against financial assistance disbursed to the borrower of such secured creditors, have taken any measures to recover their secured debt under sub-section (4) of section 13 of that Act.”

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In the said circumstances apparently no directions can be

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issued and it is for the Bank to decide as to whether an eventuality as contemplated under the proviso had arisen or not. This Court,

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W.P.(C).No.20364 of 2016

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therefore, will not be entitled to decide all such issues.

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During the pendency of the writ petition, an application is filed as I.A.No.12071/2016 wherein the petitioner has sought for a direction to the respondent Bank to consider and pass appropriate orders on Ext.P15 application for compromise settlement and keep in abeyance further proceedings pursuant to Ext.P14 and P17 pending final disposal of the writ petition. As I have already observed none of the reliefs sought for in the writ petition could be granted in the case and hence no interim order can be granted as prayer for.

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The learned counsel for the petitioner however would submit that this Court by Ext.P19 judgment had extended the time to effect the one time settlement arrived at between the parties as evident from Ext.P18 for a period of three months, which will expire only on 14.09.2016. It is submitted that Ext.P18 settlement offer permits the promoters of the petitioner company to infuse 60₹ crores. It is contended that until 14.09.2016, if any proceedings are taken for sale of property or publication for sale of property, the same would create undue hardship to the petitioner.

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On the other hand, the learned Senior Counsel appearing on behalf of the respondent Bank submits that no further indulgence is required to be shown to the petitioner. As far as Ext.P19 judgment is concerned, the same is pending in an appeal filed by the petitioner as well as the respondent Bank and therefore, the same

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W.P.(C).No.20364 of 2016

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has not become final.

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Having regard to the aforesaid factual situation, I don't think that this is a fit case in which this Court should interfere. Insofar as Ext.P14 notice had been issued by the Bank under Section 13(4), necessarily they are entitled to take further proceedings under the Act. If at all, the petitioner is aggrieved by any of the said measures, the remedy is to approach the Tribunal under Section 17 of the Act. Merely for the reason that time had been granted to the petitioner to settle the liability in terms of the one time settlement scheme, does not preclude the Bank from proceeding further. In fact, no such direction was issued by this Court in W.P.(C). No.39218/2015. It is only observed that the sale of the scheduled property shall be fixed after expiry of three months. It was also observed that the Bank is free to take all other steps and to notify the property for sale, if so advised.

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Under such circumstances, I don't think that any further direction is required to be passed in this case. The writ petition is without any merits and the same is dismissed. However, to enable the petitioner to avail the benefit of the judgment in W.P.(C). No.39218/2015, the sale if held shall not be confirmed prior to 14.09.2016.

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Sd/- A.M.SHAFFIQUE, JUDGE.

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M/S. D.C. Mills v. State Bank of India

Case brief

What is this about?

What did the court decide?

M/S. D.C. Mills v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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