Kerala High Court
South Indian Cashew Exports vs State Of Kerala on 20 May, 2019
Equivalent citations: AIRONLINE 2019 KER 511
Author: Devan Ramachandran
Bench: Devan Ramachandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
MONDAY, THE 20TH DAY OF MAY 2019 / 30TH VAISAKHA, 1941
WP(C).No. 13847 of 2019
PETITIONERS:
1 SOUTH INDIAN CASHEW EXPORTS
REPRESENTED BY ITS PROPRIETRIX MRS.HEMA HARIS
AGED 42 YEARS, W/O.HARIS NOORUDEEN, VELIYL VEEDU,
KILIKOLLOOR.P.O, KOLLAM-691004.
2 MR.HARIS NOORUDEEN
AGED 52 YEARS
S/O.NOORUDEEN, VELIYL VEEDU,
KILIKOLLOOR.P.O, KOLLAM-691004
BY ADV. SRI.P.R.MILTON
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE PRINCIPAL SECRETARY, FISHERIES,
PORTS, ENVIRONMENT AND INDUSTRIES(COIR AND CASHEW)
MAIN BLOCK, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695001
2 STATE LEVEL BANKERS COMMITTEE SLBC
REPRESENTED BY DEPUTY GENERAL MANAGER, SLBC KERALA
SLBC CELL, CANARA BANK, CIRCLE OFFICE,
CANARA BANK BUILDING, M.G.ROAD,
THIRUVANANTHAPURAM-695001
3 THE RESEVE BANK OF INDIA,
REPRESENTED BY THE DEPUTY GENERAL MANAGER, RBI,
BAKERY JUNCTION, NANDAVANAM, VAZHUTHACADU,
THIRUVANANTHAPURAM, KERALA-695033.
4 CORPORATION BANK LTD
REPRESENTED BY THE DEPUTY GENERAL MANAGER,
CORPORATION BANK LIMITED, NO.25/298/4,
GOVT PRESS ROAD, THIRUVANANTHAPURAM-695001.
SRI. RAJASEKHARAN NAIR SR. G.P.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
20.05.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 13847 of 2019
2
JUDGMENT
The first petitioner is stated to be a Unit engaged in the processing of Cashew kernels and the second petitioner to be the guarantor of certain loans availed by the said Unit. The petitioners concede that the loan facilities availed of by them from the 4th respondent -Bank has now turned out of order and they say that they have, therefore, approached the High Level Committee, constituted by the Government of Kerala, for revival of their business, as was permitted to all the cashew factories in Kerala, leading to Exhibit-P6 recommendation being made by the State Level Bankers Committee (SLBC) to the Deputy General Manager of the 4 th respondent -Bank. The petitioners say that even though in Exhibit-P6, the SLBC has directed the 4 th respondent to consider the revival proposal made by them favourably, based on merit and viability, the said Bank, however, has rejected the said proposal through Exhibit-P11 pithily stating as under:
WP(C).No. 13847 of 20193
"With reference to your above letter addressed to The Convenor, Committee of Rehabilitation of Sick Cashew Industries, Government Secretariat, Trivandurm under copy to us for reconsideration of revival proposal of your loan in the light of judgment dated 15.03.2019 of the Honourable High Court of Kerala in the Writ Petition (Civil) No. 24645/2017, we regret to inform you that the subject proposal was not considered favourably by the concerned authority stating the following reasons. There is no activity in the unit and the firm could not show any functional unit/stock in process. The transactions in the account is very nominal and the last transaction in the account was in the month of September 2018. The recovery actions have already been initiated under SARFAESI/DRT. Hence the bank is not in favour of enhancement/revival of the existing credit limit.
2. The petitioners say that the attitude of the 4 th respondent, as is exhibited in Exhibit-P11, is contrary to law, since the High Level Committee constituted for the purpose of consideration of the revival and rehabilitation of cashew factories also had a representative of the Bank on its Board and therefore, that the rejection of their revival application for the afore reasons is untenable and illegal in law.
3. Shri.S.B.Premachandra Prabhu, the learned Standing Counsel appearing for the 4 th respondent-Bank, submits that Exhibit-P11 is irreproachable since, as is clear therefrom, the 4th respondent-Bank was incapacitated from WP(C).No. 13847 of 2019 4 considering the application of the petitioners for revival for the reasons that are stated therein. He says that there is no business now being run by the petitioners and that there is no stock, indicating clearly that a revival is now impossible. He, adds that even though the specific factors that lead the Bank in entering the reasons stated in Exhibit-P11 is not recorded therein, the said decision was taken based on all relevant and germane criteria. He says, therefore, that no purpose will be served if the proposal of the petitioners is now directed to be reconsidered. He then submits that this writ petition may not be maintainable because the petitioner has already challenged the measures/steps made by the Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for brevity) before the Debts Recovery Tribunal.
4. Eventhough I hear Shri.S.B.Premechandra Prabhu on the afore lines, the fact remains that the SLBC has in Exhibit-P6, clearly directed the 4th respondent - Bank to consider the revival application of the petitioners, of course, WP(C).No. 13847 of 2019 5 subject to merit and viability. Since admittedly, a Competent official of the 4th respondent - Bank was also a member of the high level committee, they were obligated to consider the recommendation of the SLBC, as is recorded in Exhibit-P6, in a manner that can stand the scrutiny of law.
5. That said, as is clear from Exhibit-P11, the reasons stated therein for not considering the petitioner's application is merely that their business is now not running and that there is no sufficient stock. However on a reading of Exhibits- P3 and P4 circular, a doubt certainly arises as to whether these reasons alone would be sufficient to reject the application, particularly when the said circulars seem to speak otherwise. I am therefore, of the view that this matter should again gain the attention of the Competent Authorities of the Bank and I am consequently, refraining from stating anything further, lest any view of this Court, even prima facie, should interfere with the decision to be taken by the Bank after reconsideration of the relevant factors.
6. In the afore circumstances and in the above WP(C).No. 13847 of 2019 6 perspective, I order this writ petition and set aside Exhibit - P11, not because of I have affirmatively concluded against its merits, but so as to enable a reconsideration based on the recommendation of the SLBC, as is clear from Exhibit-P6, in terms of law. Resultantly, I direct the petitioners to present all relevant inputs, including documents and materials, to show how their Unit can be legitimately revived, in terms of the recommendations of the SLBC, before the 4 th respondent - Bank within a period of two weeks from the date of receipt of a copy of the judgment; in which event, the Competent Authority of the Bank will afford an opportunity of hearing to the petitioners and consider their application for revival taking note of Exhibits - P3 and P4 circulars.
7. The reconsideration afore directed shall be completed by the 4th respondent - Bank as expeditiously as is possible, but not later than one month from the date on which the petitioners make their representation in terms of this judgment; and until such time as the afore exercise is completed, all further proceedings being pursued by the Bank WP(C).No. 13847 of 2019 7 against the petitioner shall stand deferred.
I record that I am persuaded to the above course of action also because the Government of Kerala appears to be interested in revival of all cashew factories and therefore, it would be in the best interest of both sides to consider revival in a proper manner, so that not merely the business of the petitioners but also the employees and other persons involved therein will be benefited.
This Writ Petition is thus ordered.
Sd/-
DEVAN RAMACHANDRAN JUDGE PV WP(C).No. 13847 of 2019 8 APPENDIX PETITIONERS'EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE 13(2) NOTICE ISSUED BY THE BANK EXHIBIT P2 TRUE COPY OF THE POSSESSION NOTICE DATED 14.09.2018 ISSUED BY THE 4TH RESPONDENT BANK EXHIBIT P3 TRUE COPY OF THE ORDER DATED 14.11.2018 ISSUED BY THE FIRST RESPONDENT DEPARTMENT, GOVERNMENT OF KERALA EXHIBIT P4 TRUE COPY OF THE MODIFIED ORDER ISSUED BY THE FIRST RESPONDENT EXHIBIT P5 TRUE COPY OF THE REVIVAL PROPOSAL SUBMITTED BY THE PETITIONERS BEFORE THE 4TH RESPONDENT BANK EXHIBIT P6 TRUE COPY OF THE LETTER DATED 26.3.2019 ISSUED BY THE SECOND RESPONDENT SLBC EXHIBIT P7 TRUE COPY OF THE ORDER DATED 7.1.2019 ISSUED BY THE FIRST RESPONDENT TO SLBC EXHIBIT P8 TRUE COPY OF THE SECOND 13(2)NOTICE DATED 15.10.2018 ISSUED TO THE PETITIONERS EXHIBIT P9 TRUE COPY OF THE POSSESSION NOTICE DATED 24.01.2019 EXHIBIT P10 TRUE COPY OF THE NOTICE DT.26.4.2019 ISSUED BY THE ADVOCATE COMMISSIONER TO THE PETITIONERS EXHIBIT P11 TRUE COPY OF THE LETTER DATED 5.4.2019 ISSUED BY THE FOURTH RESPONDENT TO THE PETITIONERS EXHIBIT P12 TRUE COPY OF THE JUDGMENT IN WP(C)NO.24646/2017 RESPONDENTS'EXHIBITS: NIL \\TRUE COPY// PA TO JUDGE PV