Allowed

M/S.Vijaya Hospitality & Resorts Ltd. v. the Chairman and Managing Director

Kerala HC1 Feb 2017WA/113/2017

Case brief

AI extract

What is this about?

The Court extended the deadline for the appellants to deposit Rs.2.50 Crores towards the Pepper Vine account from 31.01.2017 to 03.02.2017. Failure to remit the amount by this date would mandate vacant possession of the property to the Advocate Commissioner.

What did the court decide?

Extension of time to deposit Rs.2.50 Crores granted until 03.02.2017; failure to do so mandates surrender of vacant possession on 04.02.2017.

M/S.Vijaya Hospitality & Resorts Ltd. Vs the… — Contract and Commercial Disputes | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE CHIEF JUSTICE MR.MOHAN M.SHANTANAGOUDAR &

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THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN

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WEDNESDAY, THE 1ST DAY OF FEBRUARY 2017/12TH MAGHA, 1938

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WA.No. 113 of 2017 IN WP(C).55/2017

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AGAINST THE JUDGMENT IN WP(C) 55/2017 DATED 12-01-2017

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APPELLANTS/PETITIONERS :

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M/S.VIJAYA HOSPITALITY & RESORTS LTD. 37/991, 1ST FLOOR, EMMY SQUARE, SA ROAD, ERNAKULAM, KOCHI-682020, REPRESENTED BY ITS DIRECTOR MRS. SHALINI VIJAYAN.

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C.K.VIJAYAN

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37/595, SON OF SRI.KRISHNANKUTTY, AGED 53, DEVAKI SADAN, MUTTATHIL LANE, KADAVANTHRA, ERNAKULAM, KOCHI-682020, REPRESENTED BY HIS POWER OF ATTORNEY MRS.SHALINI VIJAYAN.

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MRS.SHALINI VIJAYAN WIFE OF SRI.VIJAYAN, AGED 43, DEVAKI SADAN, MUTTATHIL LANE, KADAVANTHRA, ERNAKULAM.

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MRS.SAIRA THAMPI WIFE OF LATE THAMPI KRISHNA, AGED 46, FLAT NO.7A, VIJAYA GLIMPSES, KADAVANTHRA, KOCHI-682020.

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BY ADVS.SRI.S.EASWARAN

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SRI.P.MURALEEDHARAN (IRIMPANAM) SRI.M.A.AUGUSTINE SRI.P.SREEKUMAR (THOTTAKKATTUKARA) SMT.SOUMYA JAMES

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RESPONDENTS/RESPONDENTS :

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THE CHAIRMAN AND MANAGING DIRECTOR THE FEDERAL BANK LTD., HEAD OFFICE, BANK JUNCTION, ALUVA-683 101.

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WA.No. 113 of 2017 IN WP(C).55/2017

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THE FEDERAL BANK LIMITED VYTTILA BRANCH, ERNAKULAM, KOCHI-682019, REPRESENTED BY ITS CHIEF MANAGER & AUTHORISED OFFICER MRS.NISHA K.DAS.

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SRI.PRINCE J.PANANAL ADVOCATE COMMISSIONER, PULIMOOTTIL CITY SQUARE, IDUKKI ROAD, THODUPUZHA-685 584.

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ADDL. 4. C.K. SIBI, S/O. C.K. KRISHNANKUTTY, AGED 46 YEARS, RESIDING AT FLAT NO.7D, VIJAYA GLIMPSES, JAWAHAR NAGAR MAIN AVENUE, KADAVANTHARA, COCHIN. (ADDL.R4 IS IMPLEADED AS PER ORDER IN I.A. NO.117 OF 2017 DATED 01/02/2017)

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R1 & R2 BY SRI.MOHAN JACOB GEORGE R3 BY SRI.GILBERT GEORGE CORREYA ADDL R4 BY ADV. SRI.S.SREEKUMAR (SR.) SRI.P.MARTIN JOSE SRI.P.PRIJITH SRI.THOMAS P.KURUVILLA SRI.MANJUNATH MENON SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH MENON SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 01-02-2017, ALONG WITH W.A. No.214/2017,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Mohan M. Shanthanagoudar, C.J. & Anil K. Narendran, J.

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- - - - W.A. Nos. 113 and 214 of 2017

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- - - - Dated this the 1^st day of February, 2017

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JUDGMENT

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Anil K. Narendran, J.

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These writ appeals arise out of a common judgment of the learned single Judge dated 12.01.2017 in W.P.(C) Nos.74 and 55 of 2017. W.A. No.113 of 2017 is against the judgment in W.P. (C) No.55 of 2017. W.A. No.214 of 2017 is against the judgment in W.P.(C) No.74 of 2017.

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The pleadings and materials on record would show that the appellants availed certain loan facility from the Federal Bank offering immovable properties as security. On default in making repayment, recovery proceedings were initiated against them. It was at that point of time the appellants approached this Court in these writ petitions challenging Ext.P2 order of the Chief Judicial Magistrate Court and Ext.P5 order of the Debts Recovery Tribunal.

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After considering the rival submissions with reference to the pleadings and materials on record, the learned single Judge dismissed both the writ petitions with certain directions by a common judgment dated 12.01.2017. The learned single Judge

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WA 113 & 214/2017

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-:2:-

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found that there is no procedural irregularity on the part of the Bank in taking part possession of the property and as such there is no reason why the appellant should be relegated to the DRT as of now. Paragraphs 9 to 11 of the judgment read thus :

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“9. Elephant Court admittedly has been taken possession of by the Commissioner. However, there is some portion of Elephant Court which has not been taken over as of now, in which, admittedly, no guests are put up. The petitioners are in possession of the balance portion wherein the respondent-Bank allege that the workmen of the petitioners are staying. The petitioners shall vacate the premises and give vacant possession by surrender to the Commissioner, who shall visit the property on 18.01.2017, on which date an inventory shall be taken and possession handed over to the Bank in the presence of the authorised officer of the Public Limited Company, who shall be present there.

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With respect to Pepper Vine, the petitioners are in possession of the same and it is submitted that there are guests occupying the rooms. The order of the DRT at Exhibit P5 itself permitted the petitioner to continue the existing booking and not to have any further booking. There is a controversy as to how the same has to be interpreted. The learned Counsel for the respondent-Bank submits that fresh guests are inducted each day; to which the petitioners submit that such induction were made of only customers who had prior booking and no bookings have been taken after the order of the DRT . In any event, the petitioners could allow even new guests to be inducted and occupy, but on condition of the petitioners paying an amount of Rupees Two Crores and Fifty Lakhs as undertaken

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WA 113 & 214/2017

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-:3:-

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by the petitioners to the account of Pepper Vine on or before 31.01.2017. If the same is not paid, the petitioners would take the risk of removing any guest, whatever be the date of his/her booking or the date of induction, from the premises and vacant possession handed over to the Commissioner on 02.02.2017 in the presence of the officials of the Bank. The Commissioner shall also take an inventory before such possession is taken over.

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The Bank shall continue the possession of Elephant Court and the petitioners of Pepper Vine, provided the above directions are complied with till 31.03.2017, before which date the petitioners undertake to settle the entire dues in both the accounts. On such settlement, Elephant Court would have to be handed over back to the petitioners, at any date on which full satisfaction is made. If not, the petitioners would undertake to surrender Pepper Vine also to the respondent-Bank on 01.04.2017 and further proceedings will be taken therefrom. If Rupees Two Crores and Fifty Lakhs is not paid as undertaken, necessarily the Bank obtaining vacant possession of Pepper Vine would be entitled to proceed as provided under law for satisfaction of the debts due to the Bank.”

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Feeling aggrieved by the judgment of the learned single Judge, the appellants are before this Court in these writ appeals. We heard the arguments of the learned counsel for the appellants, learned Standing Counsel for the respondent Bank and also learned Counsel representing the additional 4^th respondent in W.A. No. 113 of 2017.

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WA 113 & 214/2017

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-:4:-

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The fact that the appellants committed default in

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repayment of the amounts due to the respondent Bank is not in dispute. In view of the default, the Bank initiated proceedings under the provisions of SARFAESI Act. In the impugned judgment, the learned single Judge found that there is no procedural regularity on the part of the Bank in taking part possession of the property. The said finding of the learned single Judge is not seriously under challenge. From the arguments advanced by learned counsel for the appellants we find that the appellants are mainly seeking further time to clear the amount outstanding.

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A reading of the judgment of the learned single Judge would show that, after considering the rival submissions, the learned single Judge has shown much leniency by permitting the appellants to clear the amount outstanding within the time specified in the judgment. Taking into account the fact that the possession of 'Elephant Court' has already been taken by the respondent Bank, the Bank was permitted to retain the possession of that resort. As far as the other other resort, namely, 'Pepper Vine' is concerned, the learned single Judge

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WA 113 & 214/2017

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-:5:-

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permitted the appellants to continue in possession subject to the fulfillment of certain conditions. One of the conditions stipulated in the judgment is that, the appellants will have to pay a sum of Rs.2.50 Crores to the account of Pepper Vine on or before 31.01.2017. It is made clear that if the said amount is not paid, the appellants would take the risk of removing any guest, whatever be the date of his/her booking or the date of induction, from the premises and handover vacant possession to the Advocate Commissioner appointed by the competent Magistrate Court on 02.02.2017.

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The learned counsel for the appellants would submit that a breathing time may be granted to remit Rs.2.50 Crores in terms of the judgment of the learned single Judge. The learned counsel for the appellants would also point that the appellants find it difficult to raise funds as all the bank accounts of the Company are frozen.

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Having considered the submissions made at the Bar we find that the time limit prescribed in paragraph 10 of the judgment of the learned single Judge to deposit Rs.2.50 Crores into the account of 'Pepper Vine' can be extended till 03.02.2017.

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WA 113 & 214/2017

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-:6:-

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If the appellants fail to remit the said amount within the aforesaid period; they should give vacant possession of the premises to the Advocate Commissioner on '04.02.2017'.

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In case the appellants commit any default in remitting

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Rs.2.50 Crores on or before 03.02.2017 as ordered by this Court, the respondent Bank will be free to take possession of the resortPepper Vine through the Advocate Commissioner, if found necessary even with police assistance. For that purpose the Advocate Commissioner can also get assistance of the police after obtaining necessary orders in that respect.

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The writ appeals would stand dismissed, subject to the above directions.

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Sd/- Mohan M. Shanthanagoudar, Chief Justice

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Sd/-

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Anil K. Narendran, Judge

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ttb/02/02

M/S.Vijaya Hospitality & Resorts Ltd. v. the Chairman and Managing Director

Case brief

What is this about?

What did the court decide?

M/S.Vijaya Hospitality & Resorts Ltd. v. the Chairman and Managing Director

Case brief

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