Debt Recovery Appellate Tribunal - Madras
T.K.S. Spinning Mills Pvt. Ltd. vs Lakshmi Vilas Bank Ltd. on 14 August, 2006
Equivalent citations: IV(2006)BC181
ORDER
K. Gnanaprakasam, J. (Chairperson)
1. The appellant herein, who is the 6th defendant in the OA-382/2003 had taken out an Application in IA-475/ 2005 for the return of the documents in the pending OA and the same came to be dismissed by the DRT, Coimbatore, by its Order dated 5.10.2005. Aggrieved by the same, this Miscellaneous Appeal has been filed.
I have heard the learned Advocate for the appellants and the respondent.
2. The case of the appellants is that they have deposited certain documents with Tamilnad Mercantile Bank Ltd. with an intention to create equitable mortgage and the said Bank filed TA-1320/2002, and their claim was settled out of Court. When the appellants applied for the return of the documents before the Tribunal, that application was dismissed on the ground that no documents were available with the Tribunal. Subsequently, the Lakshmi Vilas Bank, respondent herein, filed OA-382/ 2003 and the same is pending. That in the OA, the appellants had taken out an application for the return of the documents contending that the Tamilnad Mercantile Bank in the OA filed by them had contended that there was no pari passu charge in respect of the properties, which were given as security to the said Bank and, therefore, the appellants are entitled to get back the documents from the Tamilnad Mercantile Bank. Tamilnad Mercantile Bank was made as a party in the OA. filed by the Lakshmi Vilas Bank as the 6th defendant, in which the Tamilnad Mercantile Bank has filed counter along with the documents of title deeds deposited by the appellants herein. The respondent, viz. Lakshmi Vilas Bank, also filed an application for the grant of injunction not to return the said documents till the disposal of the OA.
3. The Tribunal heard both the applications and dismissed the same. But however, it had observed that the defendants 1 to 5 had created equitable mortgage over the properties, the title deeds of which were already handed over to Tamilnad Mercantile Bank. The claim of Tamilnad Mercantile Bank had already been satisfied, but however the respondent Bank, viz. Lakshmi Vilas Bank, claims part passu charge in respect of the securities given by the appellants herein.
4. The learned Advocate for the appellants has advanced an argument that in the OA filed by the Tamilnad Mercantile Bank, though apart passu charge was created in respect of the securities, since Lakshmi Vilas Bank has enhanced the credit limit without the consent of the Tamilnad Mercantile Bank and thereby violated the terms of the pari passu agreement, Tamilnad Mercantile Bank had revoked the part passu charge by their letter dated 15.9.1999, and therefore, the Lakshmi Vilas Bank cannot claim any right over the title deeds, which are in the hands of the Tamilnad Mercantile Bank.
5. On the contrary, the learned Advocate for the respondent Bank would contend that they were not parties to the OA filed by the Tamilnad Mercantile Bank and whatever allegations made in the said OA are not binding upon them. Even otherwise, the original pari passu charge created was admitted by the Tamilnad Mercantile Bank also, and they cannot unilaterally cancel or withdraw the pari passu charge without the consent and knowledge of Lakshmi Vilas Bank. The respondent has also taken me through several documents filed in the typeset of papers stating that the pari passu charge created was alive and even in the appellants' Notice of the Annual General Meeting of the Company along with balance sheet and profit and loss account for the year ending 31.3.2002, had shown the pari passu charge created in respect of these properties and, therefore, the appellants cannot now say that there is no pari passu charge in respect of these properties.
6. In answer to this, the learned Advocate for the appellants has further submitted that in support of the balance sheet where it is shown as pari passu charge, a there is no document to show that pari passu charge said to have been created is in existence.
7. On going through the claim by the appellants for the return of the documents and also the objections raised by the respondent Bank, it is made out that the credit facilities advanced by the Tamilnad Mercantile Bank and also by the respondent Bank was under Consortium Agreement and the respondent Bank stated that there was a pari passu charge over the properties mortgaged in favour of the Tamilnad Mercantile Bank. Even in the TA-1320/2002 filed by the Tamilnad Mercantile Bank, it was stated that there was a pari passu charge in respect of these properties, but however it was contended on behalf of the Tamilnad Mercantile Bank that since the respondent Bank had enhanced the credit limits without the consent of the Tamilnad Mercantile Bank, it had chosen to revoke the pari passu charge by their letter dated 15.9.1999, and it is the contention of the respondent Bank that such a unilateral revocation is not valid and binding upon them. But however, one thing is clear that & pari passu charge was created over these properties both in favour of the Tamilnad Mercantile Bank and also the respondent Bank. The request made by the appellants for the return of the documents requires further probe in this matter and that could be done only after letting in evidence on both sides. With regard to the nature of pleadings and the defence taken, I feel that the said matter could be decided along with the OA.
8. Both the parties also admit that the OA is pending from the year 2003, and in the said context, I feel if a direction is given to the DRT for the early disposal of the OA, that would meet the ends of justice also.
9. On 12.4.2006, the appellants voluntarily came forward to deposit Rs. 30 lakh and also produced cheques and the learned Advocate for the respondent expressed difficulty in receiving the cheques as he had not received any instruction. In the said circumstances, this Tribunal directed the appellants to deposit those cheques in an interest earning No Lien Account and it was done so. It was also submitted on behalf of the appellants that, that amount was deposited to smoothen the settlement, which they have been trying with the respondent Bank. Now they say that they are not able to reach any amicable settlement and in the said circumstances, the appellants request that the amount, which is in the deposit of the respondent Bank may be returned. The learned Advocate for the respondent Bank opposed the withdrawal of the amount on the ground that the appellants owe a large amount and they have not taken any initial amount by the respondent. The appellants were directed to deposit the amount in an interest earning No Lien Account and as on date, no lien has been created in this amount and, therefore, the appellants are entitled to withdraw the said amount. Hence the respondent Bank is directed to return the said amount along with the accrued interest thereon, to the appellants within a week's time from the date of receipt of copy of this Order.
10. In the result, the appeal is dismissed. But however, the learned PO of DRT, Coimbatore, is directed to dispose of the OA within six months from the date of receipt of this order. Both the parties are directed to co-operate with the Tribunal in the disposal of the OA.
11. The dismissal of this appeal would not preclude both the parties in arriving at an amicable settlement. If the appellants approach the Bank for any amicable settlement, the respondent Bank may consider the same.