Partly allowed

M/S Turbo Intertrade Company India(P) Ltd. v. Union of India

Kerala HC9 Dec 2020WP(C)/19596/2020

Case brief

AI extract

What is this about?

The Court disposed of a writ petition challenging a bank's NPA classification and action under the SARFAESI Act. It held the court cannot interfere with Section 13 action under the SARFAESI Act but directed specific respondent bank officials to decide a pending restructuring application within one month.

What did the court decide?

The petition was disposed of with a direction to Respondents 4 and 5 to consider and decide the Ext.P13 application within one month from the date of judgment.

M/S Turbo Intertrade Company India(P) Ltd. Vs Union of… — Company and Corporate | Kerala HC (2020)

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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.BADAR

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WEDNESDAY, THE 09TH DAY OF DECEMBER 2020 / 18TH AGRAHAYANA, 1942 WP(C).No.19596 OF 2020(Y)

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PETITIONER/S:

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M/S TURBO INTERTRADE COMPANY INDIA(P) LTD. NO. 42/2150 A, PROVIDENCE ROAD, KACHERIPADY, ERNAKULAM, 682 018 REPRESENTED BY ITS MANAGING DIRECTOR SRI. PROMODKUMAR, K P AGED 37 S/O. PADMANABHAN .K.

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BY ADVS. SRI.DINESH R.SHENOY SRI.V.SUBHASH BHAT SRI.EBIN MATHEW SRI.P.ROHIT PREMANANDAN SHENOY SHRI.SILESH S. PRABHU

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RESPONDENT/S:

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1 UNION OF INDIA REPRESENTED BY SECRETARY, MINISTRY OF FINANCE, CENTRAL SECRETARIAT, NEW DELHI 110 011.

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2 THE SECRETARY,FINANCIAL SERVICES (BANKING DIVISION), DEPARTMENT OF ADMINISTRATIVE REFORMS AND PUBLIC GRIEVANCE, SARDAR PATEL BHAVAN, SANDAD MARG, POLICE COLONY, CONNAUGHT PLACE, NEW DELHI 110 001.

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3 THE SECRETARY,MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES, ROOM NO. 356A, UDYOG BHAVAN, RAFI MARG, NEW DELHI 110 011.

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4 THE MANAGING DIRECTOR,THE CATHOLIC SYRIAN BANK LTD., HEAD OFFICE, CSB BHAVAN, P.B. NO. 502, ST. MARYS COLLEGE ROAD, THRISSUR 680 020.

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5 THE ADDITIONAL GENERAL MANAGER, THE CATHOLIC SYRIAN BANK LTD NO.33, DEIVANAYAGOM COMPLEX, VENKOT NARAYAN ROAD, T NAGAR, CHENNAI 600 057.

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6 THE AUTHORISED OFFICER AND CHEIF MANAGER (LEGAL), THE CATHOLIC SYRIAN BANK LTD., ERNAKULAM ZONAL OFFICE, P.B.NO. 1154, DJM BUILDING, MARKET ROAD, ERNAKULAM 682 011.

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WP(C).No.19596 OF 2020 2

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7 THE CHIEF MANAGER, THE CATHOLIC SYRIAN BANK LTD, BENERJI ROAD BRANCH, MARKET ROAD, ERNAKULAM, PALATHODE, BANJERI ROAD, ERNAKULAM 682 014.

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R1-3 BY ADV. SRI.N.S.DAYA SINDHU SHREE HARI R6 BY ADV. SRI.VIJU ABRAHAM R6 BY ADV. SMT.ROSHNI MANUEL R6 BY ADV. SMT.VARNA MANOJ

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09.12.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.19596 OF 2020 3

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JUDGMENT

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Dated this the 9th day of December 2020

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The writ petition is filed by the debtor, challenging Ext.P14 letter dated 25.08.2020, apart from claiming a declaration that classification of account of the petitioner as Non Performing Asset is illegal, arbitrary and contrary to the norms laid down by the Reserve Bank of India. The petitioner is also praying for directing the respondent Bank to consider and pass orders on Ext.P13 application filed by the petitioner for restructuring of the loan.

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Heard the learned counsel appearing for the petitioner at sufficient length of time. He drew my attention to Exts.P13 as well as P14 documents. It is argued by the learned counsel appearing for the petitioner that during interregnum, the petitioner has cleared substantial amount taken as a loan and by now, only an amount of Rs.16,00,000/- (Rupees sixteen lakhs only) is outstanding. According to the learned counsel for the petitioner, the existing liability can be cleared by the petitioner within a period of one year. Learned counsel for the petitioner further submits that request made by the petitioner to the Bank vide Ext.P13 application is still pending and the secured creditor, Catholic Syrian Bank can be directed to restructure the loan as

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WP(C).No.19596 OF 2020 4

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per the request made by the petitioner, right from the year 2019.

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Learned Standing Counsel appearing for the

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respondent Bank submits that if the entire amount is agreed to be paid within a period of four months, then the bank may consider the request for restructuring the loan as made. He urged that overdraft facility was granted to the petitioner, but because of dispute between the directors of the petitioner, the said facility was not renewed from time to time rendering the account as NPA.

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I have considered the submissions so advanced and perused the materials on record.

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Ext.P10 is the demand notice under section 13(2) of

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the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (hereinafter referred to as 'the SARFAESI Act'), by which the secured creditor, i.e., respondent bank had informed the petitioner as well as the Directors of the petitioner to deposit the balance outstanding amount within the prescribed period of sixty days, failing which possession of the secured assets shall be taken.

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By Ext.P14 communication dated 25.08.2020 impugned in the present petition, the respondent bank has

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WP(C).No.19596 OF 2020 5

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informed the debtor that it has already taken action under section 13 of the SARFAESI Act. It is further informed that the debtor had highlighted its inability to run the company consequent to mismanagement and chaos prevailing among the Board of Directors. Vide Ext.P13 communication dated 19.03.2020, the Managing Director of the petitioner Company had requested the respondent bank to approve waiver of charger considering past contribution to the banks bottom-line and facilitate a complete normal closure of account in the credit records so as to pay off the final tranche of payment. By Ext.P13 communication, the petitioner has requested the bank to take favourable action for ensuring continuity of business.

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It is reported that Ext.P13 application is still pending before respondent Nos.4 and 5. At the same time, it is also seen that action under the SARFAESI Act has also been started by the respondent, secured creditor. In this view of the matter, I am of the considered view that there no merit in the prayer for quashing Ext.P14 communication, which informs the debtor that action under the SARFAESI Act would follow, if the debts are not cleared. This Court cannot interfere in the action taken by the secured creditor under the SARFAESI Act in the light of the judgment of

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WP(C).No.19596 OF 2020 6

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the Hon'ble Apex Court in the matter of Authorized Officer, State Bank of Travancore and another vs. Mathew K.C (2018(1) KLT 784). However, respondent Nos.4 and 5 can be directed to consider and decide the pending Ext.P13 application as per the provisions of law in a time bound manner.

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In the result, the writ petition is disposed of, with a direction to respondent Nos.4 and 5 to consider and decide the Ext.P13 application dated 22.08.2020, within a period of one month from the date of judgment.

Sd/-

A.M.BADAR

JUDGE

ajt

WP(C).No.19596 OF 2020 7

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1	TRUE PHOTOCOPY OF MSME CERTIFICATE NO KL02B0010697.
EXHIBIT P2	TRUE PHOTOCOPY OF EMAIL DATED 18/1/2019 ISSUED BY PETITIONER TO THE 6TH RESPONDENT.
EXHIBIT P3	TRUE PHOTOCOPY OF LETTER DATED 11/6/2019 ISSUED TO THE PETITIONER.
EXHIBIT P4	TRUE PHOTOCOPY OF LETTER DATED 30/6/2019 ISSUED BY THE 7TH RESPONDENT.
EXHIBIT P5	TRUE PHOTOCOPY OF LETTER DATED 10/9/2019 ISSUED BY THE PETITIONER TO THE 7TH RESPONDENT.
EXHIBIT P6	TRUE PHOTOCOPY OF LETTER DATED 23/9/2019 ISSUED BY THE 7TH RESPONDENT TO THE PETITIONER .
EXHIBIT P7	TRUE PHOTOCOPY OF LETTER DATED 19/9/2019 ISSUED BY THE 7TH RESPONDENT TO THE PETITIONER .
EXHIBIT P8	TRUE PHOTOCOPY OF JUDGMENT DATED 12/12/2019 IN WPC NO. 27179/2019 HIGH COURT OF KERALA.
EXHIBIT P9	TRUE PHOTOCOPY OF EMAIL DATED 22/10/2019 ISSUED BY THE PETITIONER AND EMAIL DATED 23/10/2019 ISSUED BY THE 7TH RESPONDENT WITH COPY OF THE RELEVANT PAGES OF THE PASS BOOK.
EXHIBIT P10	TRUE PHOTOCOPY LETTER DATED 20.7.2020.
EXHIBIT P11	TRUE PHOTOCOPY OF EMAIL DATED 20/8/2020 ISSUED BY THE PETITIONER WITH THE MSME GUIDELINES FORWARDED ON 19/8/2020 ATTACHED.
EXHIBIT P12	TRUE PHOTOCOPY OF GUIDELINES FOR CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD) FOR STRESSED NPA MSMES ISSUED BY THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES, GOVERNMENT OF INDIA.

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WP(C).No.19596 OF 2020 8

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EXHIBIT P13 TRUE PHOTOCOPY OF THE COMPLAINT DATED 22/8/2020 (FIELD BEFORE THE 2ND RESPONDENT) WITH ANNEXURES AND THE RECEIPT. EXHIBIT P14 TRUE PHOTOCOPY OF LETTER DATED 25/8/2020 ISSUED BY THE 6TH RESPONDENT. EXHIBIT P15 TRUE PHOTOCOPY OF STATEMENT OF ACCOUNT OF THE PETITIONER'S CASH CREDIT A/C WITH THE 7TH RESPONDENT BANK. EXHIBIT P16 TRUE PHOTOCOPY OF RESERVE BANK OF INDIA PUBLICATION DATED 23.8.2018. EXHIBIT P17 TRUE PHOTOCOPY OF RBI PUBLICATION WITH REGARD TO THE CGT MSE IN ITS UDAN WEBSITE.

M/S Turbo Intertrade Company India(P) Ltd. v. Union of India

Case brief

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M/S Turbo Intertrade Company India(P) Ltd. v. Union of India

Case brief

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