Disposed

Mir Realtors Pvt. Ltd. v. the Federal Bank Limited

Kerala HC2 Aug 2021WP(C)/14634/2021

Case brief

AI extract

What is this about?

In a writ petition, the petitioner company sought directions to close NCLT proceedings initiated for corporate insolvency. The petition relied on a compromise made with the bank to pay outstanding dues, which the bank failed to report. The court granted liberty for the petitioner to remit amounts with interest by August 31, 2021, contingent on the bank reviving the compromise and not pursuing proc

What did the court decide?

Liberty granted to remit graded instalments with 11.10% interest by 31.08.2021; upon compliance, bank to revalidate compromise and not pursue NCLT proceedings.

Mir Realtors Pvt. Ltd. Vs the Federal Bank Limited — Company and Corporate | Kerala HC (2021)

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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 P.B.SURESH KUMAR MONDAY, THE 2^ND DAY OF AUGUST 2021 / 11TH SRAVANA, 1943 WP(C) NO. 14634 OF 2021

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PETITIONER:

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M/S MIR REALTORS PVT. LTD 1ST FLOOR, MM BUILDINGS, KALABHAVAN ROAD, ERNAKULAM - 682018, REPRESENTED BY ITS MANAGING DIRECTOR MR. ARUN KUMAR K.

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BY ADVS. ABRAHAM MATHEW (VETTOOR) ANIL ABEY JOSE

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RESPONDENTS:

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1 THE FEDERAL BANK LIMITED, REGD. OFFICE, FEDERAL TOWERS, BANK JUNCTION, ALUVA, ERNAKULAM DISTRICT - 683101.

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2 THE VICE PRESIDENT, THE FEDERAL BANK LTD, LCRD-ERNAKULAM DIVISION, GROUND FLOOR, FEDERAL TOWERS, MARINE DRIVE, ERNAKULAM - 682031.

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3 THE REGISTRAR, NATIONAL COMPANY LAW TRIBUNAL, KOCHI BENCH, KAKKANAD -ERNAKULAM - 682030.

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ADV. MOHAN JACOB GEORGE ADV. P.V.PARVATHY ADV.REENA THOMAS ADV. NIGI GEORGE

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ADV.PAULOCHAN ANTONY SC

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.14634 of 2021

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P.B.SURESH KUMAR, J.

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W.P.(C) No.14634 of 2021

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Dated this the 2^nd day of August, 2021

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J U D G M E N T

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Petitioner is a company engaged in the development

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of lands and construction of residential and other buildings.

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They have availed a term loan of Rs.10 crores from the first respondent bank. The petitioner could not repay the said loan as agreed. The bank, in the circumstances, instituted proceedings before the Debts Recovery Tribunal for realisation of the balance outstanding in the loan account. The bank has also instituted proceedings before the National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution process in respect of the petitioner company. During the pendency of the said proceedings, the petitioner approached the bank and offered to pay a sum of Rs.11.65 crores in

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W.P.(C) No.14634 of 2021

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instalments. The offer made by the petitioner was accepted by the bank and the petitioner was permitted to pay the amounts as offered by them in graded instalments, commencing from 04.02.2021 subject to a few conditions including the condition that the petitioner shall pay sum of Rs.8.7 lakhs due to the bank in respect of another loan and that a compromise petition shall be filed before the Debt Recovery Tribunal incorporating the terms of settlement and a default clause to the effect that the entire amounts due to the bank would become payable in the event of default in remitting any one of the instalments. The bank has also agreed in terms of the compromise arrangement that on payment of the first instalment namely, Rs.20 lakhs and Rs.8.7 lakhs referred to above, and on filing the compromise petition, the bank would report the settlement before the NCLT. The case of the petitioner is that though they have complied with the terms of the compromise and has been remitting the instalments, the bank is not reporting the compromise before the NCLT. It is alleged by the petitioner

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W.P.(C) No.14634 of 2021

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that on account of the said reason, the NCLT is taking steps to admit the proceedings and in that event, the affairs of the petitioner would come to a standstill. The petitioner, in the circumstances, seeks appropriate directions to the NCLT to close the proceedings pending before it as settled between the parties.

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2 . Heard the learned counsel for the petitioner as

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also the learned counsel for the first respondent bank.

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3 . The learned counsel for the bank pointed out that the petitioner has not remitted the instalments as agreed and as such, the compromise entered into by the petitioner with the bank stands cancelled. It was submitted by the counsel that it is on account of the said reason that the bank could not report the settlement before the NCLT. It was also submitted by the learned counsel that if the petitioner remits the amounts payable in terms of the compromise upto 31.07.2021 with simple interest before the said date, the bank is agreeable to revalidate the compromise and in that event,

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W.P.(C) No.14634 of 2021

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the bank may not have any objection in seeking adjournment in the proceedings pending before the NCLT.

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4 . The learned counsel for the petitioner does

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not dispute the fact the amounts payable in terms of the compromise upto date have not been paid by them. On a query from the court, the learned counsel is not in a position to make a commitment as to the time limit within which the pending dues in terms of the compromise could be paid to the bank.

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5 . As noted, substantial amounts running to

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several crores are due to the bank from the petitioner. In a case of this nature, I do not think that the relief sought by the petitioner can be granted. Nevertheless, having regard to the totality of the facts and circumstances of the case, especially the fact that rights of parties with whom the petitioner has entered into contract for construction of apartments and other buildings would be affected detrimentally in the event of the admission of the proceedings instituted before the NCLT, I

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W.P.(C) No.14634 of 2021

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deem it appropriate to dispose of the writ petition granting liberty to the petitioner to remit the graded instalments upto 31.08.2021 in terms of the compromise entered into between the parties with simple interest at the rate of 11.10% on or before 31.08.2021. Ordered accordingly. Needless to say that if the petitioner remits the amounts as directed and continues to pay the remaining graded instalments, the bank shall revalidate the compromise. Needless also to say that in the event of the petitioner remitting the amounts as directed above and continuing to pay the remaining graded instalments, the bank shall not pursue the proceedings pending before the NCLT.

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Sd/-

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P.B.SURESH KUMAR, JUDGE.

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YKB

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W.P.(C) No.14634 of 2021

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APPENDIX OF WP(C) 14634/2021

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PETITIONER EXHIBITS

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Exhibit P1	A TRUE COPY OF THE FILED BY THE 1ST RE HON'BLE NCLT, KOCHI 2020.	IBA/11/KOB/2020 SPONDENT BEFORE THE , DURING FEBRUARY,
Exhibit P2	A TRUE COPY OF THE KRERA ON 16.11.2020	ORDER PASSED BY .
Exhibit P3	A TRUE COPY OF THE EKM/EKMA/SAR2904/20 THE 2ND RESPONDENT	LETTER NO.LCRD- 20-2021 ISSUED BY DATED 02.02.2021.
Exhibit P4	A TRUE COPY OF THE COMPROMISE PETITION RESPONDENT BANK AND DEFENDANTS IN THE O BEFORE THE HON'BLE	UNDATED JOINT FILED BY THE PETITIONER OTHER A NO.173 OF 2020 DRT.
Exhibit P5	A TRUE COPY OF THE BY THE HON'BLE DEBT ON 09.04.2021.	DAILY ORDER PASSED RECOVERY TRIBUNAL
Exhibit P6	A TRUE COPY OF THE ORDER PASSED BY THE 15.12.2020.	RELEVANT PAGES DAILY HON'BLE NCLT DATED
Exhibit P7	A TRUE COPY OF THE THE DAILY ORDER PAS NCLT DATED 04.01.20	RELEVANT PAGES OF SED BY THE HON'BLE 21.
Exhibit P8	A TRUE COPY OF THE THE DAILY ORDER PAS NCLT DATED 22.01.20	RELEVANT PAGES OF SED BY THE HON'BLE 21.
Exhibit P9	A TRUE COPY OF THE THE DAILY ORDER PAS NCLT DATED 05.02.20	RELEVANT PAGES OF SED BY THE HON'BLE 21.
Exhibit P10	A TRUE COPY OF THE	RELEVANT PAGES OF

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W.P.(C) No.14634 of 2021

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THE DAILY ORDER PASSED BY THE HON'BLE NCLT DATED 01.03.2021.

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Exhibit P11 A TRUE COPY OF THE RELEVANT PAGES OF THE DAILY ORDER PASSED BY THE HON'BLE NCLT DATED 15.03.2021. Exhibit P12 A TRUE COPY OF THE RELEVANT PAGES OF THE DAILY ORDER PASSED BY THE HON'BLE NCLT DATED 28.04.2021. Exhibit P13 A TRUE COPY OF THE RELEVANT PAGES OF THE DAILY ORDER PASSED BY THE HON'BLE NCLT DATED 02.06.2021. Exhibit P14 A TRUE COPY OF THE RELEVANT PAGES OF THE DAILY ORDER PASSED BY THE HON'BLE NCLT DATED 30.01.2021. Exhibit P15 A TRUE COPY OF THE COMMUNICATION INTIMATING THE ORDER DATED 06.07.2021 OF THE NCLT, KOCHI ISSUED BY THE REGISTRY TO THE PETITIONER DATED 08.07.2021. Exhibit P16 A TRUE COPY OF THE REPRESENTATION MADE BY THE PETITIONER TO THE 2ND RESPONDENT DATED 28.05.2021. Exhibit P17 A TRUE COPY OF REPRESENTATION MADE BY THE PETITIONER BY E-MAIL TO THE CEO OF THE 1ST RESPONDENT DATED 16.07.2021. Exhibit P18 A TRUE COPY OF THE AFFIDAVIT FILED BY THE 1ST RESPONDENT BEFORE THE NCLT DATED 21.01.2020.

Mir Realtors Pvt. Ltd. v. the Federal Bank Limited

Case brief

What is this about?

What did the court decide?

Mir Realtors Pvt. Ltd. v. the Federal Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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