Maximum Traders Private Limited Vs. the Authorised Officer - Court Judgment

IN THE HIGH COURT OF KERALAAT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH WEDNESDAY, THE 14TH DAYOF AUGUST 2013 23RD SRAVANA, 1935 WP(C).No. 19736 of 2013 (N) ---------------------------- AGAINST THE ORDER/JUDGMENT IN SA 507/2013 of DEBT RECOVERY TRIBUNAL, ERNAKULAM DATED 11 07-2013 PETITIONER(S): -------------------------- 1. MAXIM TRADERS PRIVATE LIMITED MEENUS BUILDKNG, NH-47, BYE PASS EDAPPALLY, COCHIN-682 024 REPRESENTED BY THE EXECUTIVE DIRECTOR HISHAM HIMAMUDHEEN RAMJU.

2. HISHAM HIMAMUDHEEN RAMJU S/O.R.V. HIMAMUDHEEN, RAYAMARAKKAR VEETTIL, MANATHALA CHAVAKKAD ”

506. BY ADV. SRI.K.V.GOPINATHAN NAIR RESPONDENT(S): ---------------------------- 1. THE AUTHORISED OFFICER HDFC BANK LTD., KMS BUILDING OPP. GOVERNMENT MODEL GIRLS HIGH SCHOOL, PALACE ROAD, THRISSUR, PIN.680003 2. HDFC BANK, VYTTILA BRANCH CHALIKKAVATTOM ROAD, ERNAKULAM PIN.682 019 REPRESENTED BY ITS MANAGER. BY SRI.T.RAJESH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14-08-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 19736 of 2013 (N) APPENDIX PETITIONER(S)' EXHIBITS EXT.P1 - TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 6 12-2012 EXT.P2 - TRUE COPY OF THE ORDER IN CRL.MP.NO.3425/2013 DATED 23 4-2013 OF THE CHIEF JUDICIAL MAGISTRATE COURT, THRISSUR. EXT.P3 - TRUE COPY OF THE SECURITISATION APPLICATION FILED BY THE PETITIONER BEFORE THE DEBT RECOVERY TRIBUNAL, ERNAKULAM DATED 5 7-2013 EXT.P4 - TRUE COPY OF THE DIRECTION PETITION FILED BY THE PETITIONER IN I.A. NO.2029/2013 IN S.A.NO.507/2013 DATED 8 7-2013 EXT.P5 - TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER IN I.A. NO.2029/2013 IN S.A.NO.507/2013 DATED 8 7-2013. EXT.P6 - TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE RESPONDENT BANK DATED 17 7-2013 EXT.P7 - TRUE COPY OF THE ORDER OF THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM IN I.A.NO.2030/2013 IN S.A.NO.507/2013 DATED 11 7-2013 EXT.P8 - TRUE COPY OF THE ORDER OF THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM IN I.A.NO.2029/2013 IN S.A.NO.507/2013 DATED 26 7-2013. RESPONDENT(S)' EXHIBITS : NIL /TRUE COPY/ P.A. TO JUDGE. V. CHITAMBARESH, J -------------------------------- WP(C) NO. 19736 OF 201.------------------------------------ Dated this the 14th day of August, 2013 JUDGMENT The jurisdiction under Article 227 of the Constitution of India is called in aid by the petitioners to challenge Ext.P8 interim order of the Debts Recovery Tribunal in I.A. No. 2029/2013 in S.A. No. 507/2013. S.A. No. 507/2013 has been filed by the petitioners under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act challenging the measures taken by the second respondent bank to enforce the security interest. The security interest is a BMW car bearing Reg. No. KL 0.BP 500.for which a loan of about `75,00,000/- (Rupees Seventy five lakhs only) was availed by the petitioners. The Debts Recovery Tribunal passed Ext.P7 order dated 11.07.2013 in I.A. No. 2030/2013 in S.A. No. 507/2013. The relevant portion of the order is extracted herein below. "5. Meanwhile, as of now without going into the merits of the contentions, taking note of the persuasive submissions made by the learned 2 WP(C) No. 19736/2013 Counsel, as also the bonafide of the petitioners/applicants, considering the balance of convenience and on grounds of equity and fair play, and to secure the ends of justice, the respondent/defendants are restrained from proceeding with any further action (including any coercive measures towards physical possession) under the impugned measures, till 15.07.2013 subject to the condition that the petitioners/applicants shall deposit a sum of Rs.3,25,000/- on or before 30.07.2013; a sum of Rs.3,25,000/- on or before 30.08.2013; and a sum of Rs.3,25,000/- on or before 28.09.2013, to the respondents/defendants either by way of bank draft/pay order or cash, to be appropriated by the respondents/defendants to the credit of the petitioners'/applicants' dues recoverable under the impugned action. And thereafter, from October, 2013 onwards, the petitioners/applicants should continue to remit the monthly instalments along with the interest thereon (payable on or before the stipulated due date as per the original terms of sanction), until further orders of the Tribunal".

2. Thus the petitioners were obliged to deposit a sum of `3,25,000/- (Rupees Threelakhs twenty five thousand only) on or before 30.07.2013 and a sum of ` 3,25,000/- (Rupees Three lakhs twenty five thousand only) on or before 30.08.2013 and a further sum of `3,25,000/- (Rupees Three lakhs twenty five thousand only) on or before 28.09.02013. The petitioners are obliged to pay the equated monthly instalments for the balance amount due to the second respondent until further orders. It is a conceded fact that 3 WP(C) No. 19736/2013 Ext.P7 order has not been annulled or varied till date even though a motion is said to have been made by the second respondent bank. The second respondent bank is obliged to honour and respect Ext.P7 order so long as the same is not annulled or varied in accordance with law. The specific case of the petitioners is that the sum of `3,25,000/- (Rupees Three lakhs twenty five thousand only) due on 30.07.2013 was not accepted by the second respondent even though tendered. The counsel for the petitioners passed on a Demand Draft dated 13.08.2013 for a sum of `6,50,000/- (Rupees Six lakhs Fifty thousand only) to the counsel for the second respondent bank which takes in the dues upto 30.08.2013. The counsel for the second respondent bank was in no mood to accept the sum and hence the Demand Draft was taken back by the counsel for the petitioners. It should therefore be treated that the petitioners are eager and willing to comply with Ext.P7 interim order of the Debts Recovery Tribunal as a condition for stay of further coercive steps.

3. Ext. P8 order impugned in this Writ Petition declines the prayer of the petitioners to defreeze the current account 4 WP(C) No. 19736/2013 (No.15132000000955) maintained by the petitioners in the second respondent bank. The petitioners lament that there is no necessity to defreeze their current account when the Debts Recovery Tribunal has passed a conditional order of stay as evident by Ext.P7 order. I find force in the submission since there is no necessity to freeze the current account when the petitioner is eager and willing to comply with Ext.P7 conditional order of the Debts Recovery Tribunal. I should note that the present Writ Petition relates only to the loan account No.16391783 and no coercive steps shall be taken in respect of that loan account in view of Ext.P7 conditional order stay. The stand of the Debts Recovery Tribunal that it has no jurisdiction to direct defreezing of the account under the SARFAESI Act is palpably wrong and Ext.P8 order passed declining the prayer of the petitioners in this regard is wholly unreasonable. Ext.P8 order suffers from an error of jurisdiction apparent on the face of the record and is liable to be set at naught. I do so and allow I.A. No. 2029/2013 in S.A. No. 507/2013 on the file of the Debts Recovery Tribunal. 5 WP(C) No. 19736/2013 4. The petitioners lament that a sum of `34,29,821.89 has been unauthorisidely appropriated by the second respondent bank from current account maintained by the petitioners and that too after Ext.P7 conditional order of the Debts Recovery Tribunal. It is upto the petitioners to move the Debts Recovery Tribunal by proceeding in contempt or for a direction to the second respondent bank to put the money back in the current account. This Writ Petition does not deal with any other loan transaction of the petitioners with the second respondent bank and in confined to loan account No. 16391783 only. The contention of the second respondent that a Writ Petition against a scheduled bank will not lie is purile since only the jurisdiction under Article 227 of the Constitution of India against Ext.P8 interim order of the Debts Recovery Tribunal is invoked. The Writ Petition is allowed. No costs. V. CHITAMBARESH JUDGE ncd