Kerala High Court
Davis Manuel vs State Bank Of Travancore
Author: K.Vinod Chandran
Bench: K.Vinod Chandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
TUESDAY, THE 22ND DAY OF JULY 2014/31ST ASHADHA, 1936
WP(C).No. 26273 of 2010 (H)
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PETITIONER(S):
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DAVIS MANUEL,MANAGING DIRECTOR,KOLDY
PETROLEUM INDIA LIMITED, VANNAMADA P.O
PALAKKAD 678 555.
BY ADV. SRI.C.K.KARUNAKARAN
RESPONDENT(S):
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1. STATE BANK OF TRAVANCORE,H.O.,
POOJAPURA, TRIVANDRUM, REP.BY ITS MANAGING DIRECTOR.
2. DEPUTY GENERAL MANAGER,STATE BANK OF
TRAVANCORE, ZONAL OFFICE, KOTTAYAM 686 001.
3. ASSISTANT GENERAL MANAGER,STATE BANK OF
TRAVANCORE, KOTTAYAM MAIN BRANCH, KOTTAYAM 686 001.
4. CHIEF MANAGER(SARC),STATE BANK OF
TRAVANCORE, ZONAL OFFICE, KOTTAYAM 686 001.
R,RESPT. BY ADV. SRI.K.S.DILIP
R BY SRI.K.S.DILEEP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 22-07-2014, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C).No. 26273 of 2010 (H)
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APPENDIX
PETITIONERS EXHIBITS:
EXT.-P1 COPY OF THE LETTER DATED 24.11.08 OF THE PETITIONER.
EXT.-P2 COPY OF RESPONDENT BANK'S LETTER DATED 19.6.09
RELEASING CHARGE OVER THREE PROPERTIES.
EXT.-P3 COPY OF THE 3RD RESPONDENT'S LETTER DATED 11.1.10
RELEASING CHARGE OVER THREE PROPERTIES.
EXT.-P4 COPY OF THE PETITIONER'S LETTER DATED 18.12.09
EXT.-P5 COPY OF THE 2ND RESPONDENT'S LETTER DATED 6.1.10
EXT.-P6 COPY OF THE PETITIONER'S LETTER DATED 1.2.10
EXT.-P7 COPY OF THE PETITIONER'S LETTER DATED 3.3.10 ADDRESSED
TO THE 3RD RESPONDENT.
EXT.-P8 COPY OF THE 4TH RESPONDENT'S LETTER DATED 13.5.10
EXT.-P9 COPY OF PETITIONER'S LETTER DATED 9.6.10
EXT.-P10 COPY OF THE 4TH RESPONDENT'S LETTER DATED 23.6.10
EXT.-P11 COPY OF PETITIONER'S LETTER DATED 30.6.10
EXT.-P12 COPY OF PETITIONER'S LETTER DATED 23.7.10 ADDRESSED TO
THE 3RD RESPONDENT.
EXT.-P13 COPY OF THE 4TH RESPONDENT'S LETTER DATED 28.7.10
EXT.-P14 COPY OF PETITIONER'S LETTER DATED 29.4.09
EXT.-P15 COPY OF THE LETTER NO.DGM/KTM/SARC/REGD/12 DATED 9.8.10
ISSUED BY THE 4TH RESPONDENT'S
EXT.-P16 COPY OF THE LETTER NO. DGM/KTM/2099/REGD A/D DATED 5.2.09
ISSUED BY THE 3RD RESPONDENT.
EXT.-P17 COPY OF A LETTER DATED 10.12.10 ISSUED BY THE 2ND
RESPONDENT.
CONTD..2..
: 2 :
WP(C).No. 26273 of 2010 (H)
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EXT.-P18 COPY OF THE PROCEEDINGS DATED 27.1.11 OF THE LOK ADALAT.
EXT.-P19 COPY OF LETTER DATED 27.1.11
EXT.-P20 COPY OF 3RD RESPONDENT'S LETTER DATED 5.2.11
EXT.-P21 COPY OF LETTER DATED 7.2.11
EXT.-P22 COPY OF BANK'S LETTER DATED 24.2.11
EXT.-P23 COPY OF LETTER DATED 9.5.11
EXT.-P24 COPY OF 3RD RESPONDENT'S LETTER DATED 24.5.11
EXT.-P25 COPY OF 1ST RESPONDENT'S LETTER DATED 11.6.14
EXT.-P26 COPY OF THE PUBLICATION THAT APPEARED IN MATHRUBHOOMI
DAILY OF 20.6.14
EXT.-P27 PHOTOGRAPHS OF THE PROPERTY NOTIFIED THROUGH EXHIBIT
P26.
RESPONDENT'S EXHIBTS: NIL
// TRUE COPY //
P.A TO JUDGE.
SB
K. VINOD CHANDRAN, J.
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W.P.(C) No. 26273 of 2010
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Dated this the 22nd day of July, 2014
J U D G M E N T
The petitioner has invoked the extra ordinary jurisdiction of this Court, seeking continuation of the purported One Time Settlement (OTS) suggested by the petitioner and alleged to have been accepted by the Bank. The OTS proposal dated 01.08.2008 is seen produced as Ext.P1. Admittedly, the petitioner who was managing a group of Companies, by name Koldy Group of Companies, had availed of various facilities through various public limited and private limited Companies, incorporated under the Companies Act, 1956. The facilities availed by each of the said entities, as also the properties mortgaged, have been listed out in Ext.P1.
2. The petitioner by Ext.P1, agreed to settle the entire outstanding, in the various facilities availed by the different entities; for an amount of Rs.10,50,00,000/-. By Ext.P1, two W.P.(C) No. 26273 of 2010 2 properties were also proposed to be sold for specified consideration. Though an acceptance is not evident, going by the subsequent action of the Bank, it is clear that the Bank had agreed to the said proposal.
3. By Exts.P2 and P3, on deposit of substantial amounts, the properties referred to, in the said communications, were released to the petitioner. The petitioner submits that the properties, which were released were subjected to sale and the sale proceeds were paid into the loan accounts with the Bank. However, the sale of the entire properties as listed out in Ext.P1, could not be concluded within the specified period of time. In fact, as is seen from Ext.P1, the proposal was to sell the entire properties and settle the outstanding dues for an amount of Rs.10,50,00,000/- within a period of six months from that date. But even later to the said period, Exts.P2 and P3 release were effected by the Bank on the petitioner paying amounts in lieu of the release. The petitioner's contention now, is that, Ext.P1 proposal, as accepted by the bank W.P.(C) No. 26273 of 2010 3 remained operative even after the six month period specified in Ext.P1, and even at present.
4. However, when Ext.P4 proposal was made, the Bank came out with Ext.P5, wherein, categorically, the petitioner was told that release of the property in the sequence requested by the petitioner would not be considered by the sanctioning authority. The petitioner was advised, to submit, a revised schedule of remittance and release of properties. The petitioner however maintained as per Ext.P6 that there was no need to revalidate the compromise; since the petitioner had been making payments and getting release of the properties even after the stipulated time in Ext.P1. It is to be noticed that, the Bank had been sufficiently lenient in having accepted the extension of the proposal of OTS, far beyond the period suggested by the petitioner; being six months from 01.08.2008. The Bank cannot be held down to the proposal indefinitely for reason only of it having accepted money and released certain properties beyond the period agreed to, in W.P.(C) No. 26273 of 2010 4 Ext.P1.
5. This Court also, cannot see any infirmity, in the Bank having demanded a revalidation of the compromise on 06.01.2010 as per Ext. P5. A further prayer made, as per Ext. P7 for extension of the period, was considered by the Bank and the petitioner permitted time up to 30.06.2010 for the sale of two specified properties in Ext.P8. This also evidently did not fructify. By Ext.P10 dated 23.06.2003 the respondent Bank unequivocally informed the petitioner, that there could be no extension of the compromise after 30.06.2010 and that on remittance not being carried out as agreed, the Bank would be constrained to initiate recovery proceedings.
6. By Ext.P13, dated 28.07.2010, the respondent Bank again sought a revalidation of the compromise, with a revised schedule of remittance. Ext.P13 definitely intimated the intention of the Bank to resort to recovery proceedings on no such revised schedule; acceptable to the Bank, being submitted. The present Writ Petition was filed at that stage. W.P.(C) No. 26273 of 2010 5 Subsequent to the filing of the Writ Petition, the Bank had also by Ext.P15, informed the petitioner, the decision of the Bank to proceed for recovery since no revised schedule of remittance was received as sought for in Ext.P13.
7. In any event, as is disclosed from Ext.P17, subsequent to the filing of the Writ Petition, on a suggestion made at a Lok Adalath, a fresh compromise proposal was submitted, which was approved by the Bank. The terms and conditions of the compromise so arrived at is revealed in Ext.P17. In such circumstance, the contention of the petitioner that he would settle the entire outstanding dues, as proposed in Ext.P1 can no longer survive. During the pendency of the Writ Petition itself, a fresh compromise was entered into by the petitioner, as is evident in Ext.P17. Though there is a further proceeding initiated before the Lok Adalath, as is evident from Ext.P18, for incorporation of one more condition, no such condition has been subsequently incorporated.
8. Ext.P17 was also not acted upon by the petitioner. W.P.(C) No. 26273 of 2010 6 Ext.P19 however indicates that further amounts were paid to the loan account, maintained at the respondent Bank, but not the entire upfront amounts agreed to in Ext.P17, which was Rs.2,32,00,000/-. As against this only Rs.82,00,000/- was remitted, as evidenced by Ext.P19.
9. The petitioner insists that he had proceeded in accordance with the compromise subsequently entered into. By communication dated 05.02.2011, the Bank had directed the petitioner to make the upfront payment as agreed upon in Ext.P17. A further communication of the Bank, produced along with Ext.P20, is prior to that of 05.02.2011 and reiterates the stand of the Bank regarding the upfront remittance. The Bank in Ext.P20 had also specified the mode of appropriation and the release contemplated of specified properties. The terms of compromise were also amended and such amendments sanctioned by Ext.P22 dated 24.02.2011. The period for settlement also stood extended to 31.03.2011. The stipulation as to remittance of Rs.2,32,00,000/- remained as such, but with the time W.P.(C) No. 26273 of 2010 7 extended. But for the assertion of the petitioner, to have acted in accordance with the compromise, there is nothing on record to substantiate the upfront remittance, nor does the petitioner have a claim of such remittance having been effected. Again further time was sought by Ext.P23.
10. Admittedly the remittance made by the petitioner was of Rs.1,14,00,000/-, while as per the compromise evidenced by Ext.P17, the petitioner was obliged to remit upfront; an amount of Rs.2,32,00,000/-. Having not complied with the compromise entered into as evidenced by Ext.P17, the petitioner made a further proposal as per Ext.P21 on 07.02.2011 again relying on the earlier compromise of 2008, and seeking changes in the subsequent compromise sanctioned. The Bank by Ext.P22, replied that any change in the terms of sanction would be examined by the Bank's competent authority; only after remittance of the upfront remittance stipulated as per the compromise, within the stipulated time. With respect to the part release of properties sought for in Ext.P21, the W.P.(C) No. 26273 of 2010 8 petitioner was also directed to make payments of Rs.1,16,00,000/-, which the Bank directed the petitioner to deposit in a 'no lien' account.
11. However, conditions stipulated in Ext.P22 was not adhered to and the Bank finally, by Ext.P24 on 24.05.2011, concluded that the offer for one time settlement stands cancelled, for reason of non compliance of the specific terms. The petitioner has now moved an application for stay, of the sale notified as per Ext.P26, of the properties of the petitioner. As is very evident from the discussion herein above, the compromise, which was put forth by the petitioner in the year 2008 as per Ext.P1 and accepted by the Bank was not complied with, as per the terms or in the extended period granted by the Bank, spread over more than two years, from the submission of the proposal. The above Writ Petition has been filed seeking reliefs to permit the petitioner to pay the remaining amounts under Ext.P1 compromise and to set aside Ext.P13 communication issued by the Bank; seeking submission of the revised schedule. W.P.(C) No. 26273 of 2010 9 The petitioner also seeks for a direction to the respondent Bank to agree to the proposals made as per Ext.P11 and P12.
12. The compromise terms specifically agreed to, earlier in the year 2008, by Ext.P1 and then before the Lok Adalath, through Ext.P17, were both not honoured. The petitioner cannot seek, any continuance of the earlier compromise of 2008, which even as per the proposal was to be settled within a period of six months. The respondent Bank having granted more than two years and having released the properties as per the proposal on remittance of the specified amounts, turned around only by Ext.P13 requesting for a revalidated revised proposal by reason of passage of time as also the petitioner having not honoured the specific terms for a long period. The Bank cannot be faulted for having insisted on a revised proposal, which was solely for reason of the default of the petitioner, despite granting a far longer period than that was sought for initially.
W.P.(C) No. 26273 of 2010 10
13. During the pendency of the Writ Petition, there was a further compromise, entered into; the terms of which also were not adhered to by the petitioner. This Court cannot substitute its wisdom for that of the financial institution and direct an out-dated compromise to be proceeded with; if it does not commend to the financial discipline of the public sector Bank. In financial matters, the wisdom of the Bank would run supreme and this Court cannot force the hand of the Bank into conceding to a settlement, which was admittedly arrived at in the year 2008 and not honoured within the specified period or the extended period. The earlier compromise of 2008, Ext.P1, is also no more functional for reason of the petitioner having agreed to renewed terms as per Ext.P17. That too was defaulted and what is essentially sought for is the revision of terms; as demanded by the prospective purchasers of the properties.
14. For all the above reasons, the Writ Petition is found to be devoid of merit and the same is dismissed. However, it is submitted by both the Counsel, that proceedings are W.P.(C) No. 26273 of 2010 11 pending before the Debt Recovery Tribunal, the contentions in which, apart from the sustainability of a continued OTS; would be left open. The petitioner would also be entitled to challenge the sale proceedings pursuant to Ext.P26, if any irregularity or illegality are revealed therefrom, before the appropriate forum. It is made clear that this Court has not looked into the sale proceedings, notified as per Ext.P26, and the dismissal of the Writ Petition and refusal to consider stay of Ext.P26, need not be taken as an affirmation of the legality of the proceedings which led to such notification of sale.
The Writ Petition stands dismissed with the above observations. Parties to suffer their respective costs.
Sd/-
K. VINOD CHANDRAN, JUDGE SB // True Copy // P.A To Judge.