Gujarat High Court
M/S Sadguru Decorators And Caterers ... vs Hdfc Bank Ltd on 13 March, 2024
NEUTRAL CITATION
C/SCA/4171/2024 ORDER DATED: 13/03/2024
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4171 of 2024
==========================================================
M/S SADGURU DECORATORS AND CATERERS PVT. LTD. & ORS.
Versus
HDFC BANK LTD. & ORS.
==========================================================
Appearance:
MS JOLLY NISHIT SHAH(3993) for the Petitioner(s) No. 1,2,3,4,5
for the Respondent(s) No. 1,3
MS MEGHA CHITALIA AGP for the Respondent(s) No. 2
==========================================================
CORAM:HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 13/03/2024
ORAL ORDER
1. The petitioners have preferred present petition under Articles 226 and 227 of the Constitution of India and prayed for below mentioned relief/s:-
"a) Be pleased to admit this petition.
b) Be pleased to issue writ of mandamus or any other appropriate writ in the interest of justice.
c) Be pleased to give direction to the Respondent HDFC Bank to extend time to complete approved OTS amount dated 13.11.2023, As Anex-'B' in the interest of justice and in the interest of recovery to the Respondent Bank.
d) Be pleased to give direction to the respondents to maintain status quo for the properties in question in the interest of natural justice till the final hearing in the pending Securitisation Application No. 112 of 2020 in Hon'ble Debt Recovery Tribunal-I, Ahmedabad. Page 1 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024
NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined
e) Be pleased to give direction to the respondent bank for not to deposit given all advance dated 23 cheques (No.012203-012206) as the applicants have deposited first three installments of approved OTS dated 13.11.2023 As Annex-'B' on or before due dates and abide to deposit the remaining two installments if time would have been extended to complete the same.
f) Be pleased to restrain the respondent bank in acting in any manner whatsoever pursuant to action/steps under sec. 13(4) of SARFAESI Act, 2002 in respect of the mortgaged properties/secured assets.
g) Be pleased to restrain the respondent bank from taking physical possession and sale of the said properties and pass stay orders to that effect.
h) Pending hearing and final disposal of this application, this Hon'ble High Court of Gujarat be pleased to grant such relief, which may be necessary for protecting the interest of the parties as well as interest of the secured assets.
i) Your Lordship may be pleased to grant such other and further relief as may be deemed fit in the interest of justice;"
2. It appears that present petition is filed by the petitioners seeking indulgence on the ground that the petitioners have already made proposal to the respondent bank for One Time Settlement ("OTS" for short) and the bank has considered said OTS proposal and granted indulgence in favour of the petitioners to pay disputed amount, in five equal installments.
Page 2 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024
NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined
3. Out of five installments, the petitioners have paid only three installments and because of financial crises, the remaining installments were not paid by the petitioners and therefore, the petitioners have breached the condition mentioned in OTS Scheme and hence, the bank has initiated proceedings to get the possession of the disputed property.
4. At the outset, Mr. Lalit Patel, learned Counsel has submitted that he has received an instruction to appear on behalf of the respondent bank and he wants to file his Vakalatnama in favour of the respondent bank.
5. In view of above, Mr. Lalit Patel, learned Counsel is permitted to file his Vakalatnama on behalf of the respondent bank.
6. Heard Ms. J.N. Shah, learned Counsel for the petitioners, Ms. Megha Chitlia, learned Assistant Government Pleader for respondent No.2 and Mr. Lalit Patel, learned Counsel for the respondent bank. Page 3 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024
NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined
7. Ms. J.N. Shah, learned Counsel for the petitioners has submitted that the action of the respondent bank is arbitrary, illegal, unjustified and without following due procedure mentioned in Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022 ("SARFAESI" for short). She has further submitted that the order passed by the Ld. District Magistrate, Sabarkanth is not in consonance with the provision under Section 14 of the SARFAESI Act and the same is passed without recording satisfaction as contemplated under second proviso to Section 14(1) of the SARFAESI Act. She has further submitted that learned Mamlatdar, Idar, Sabarkantha has issued notice dated 4.3.2024 to take physical possession on 20.3.2024 following order dated 31.1.2020 of learned District Magistrate, Sabarkantha in Securitisation Case No. 01 of 2020 is also null and void and cannot be enforceable in law.
7.1 In view of above, Ms. Shah, learned Counsel for the Page 4 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024 NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined petitioners urge before this Court to give direction to the respondent bank to extend time to complete approved OTS amount.
7.2 In support of her submissions, Ms. Shah, learned Counsel for the petitioners has referred to and relied upon the judgment of High Court of Punjab and Haryana in the case of Anu Bhalla and Ors. vs. District Magistrate, Pathankot and Ors., in Civil Writ Petition No.5518 of 2020, more particularly paragraph No. 36, which reads as under:-
"36. Moreover, in our considered opinion, a relief of such nature claiming extension payment of balance settlement amount pursuant to mutually agreed OTS by the borrower cannot be considered by the Adjudicating Authority/Tribunal while exercising its jurisdiction under the Code, 2016. The judgments referred to us in paras No. 14-18, while deciding Issue No. 1, have considered granting extension in OTS in exercise of jurisdiction of this Court under Article 226 of the Constitution of India which is also an equitable jurisdiction. It is well settled, that every provision must be interpreted with the precise aim and object of the Statute, for which it was enacted. Code, 2016 was enacted with the primary object to provide for a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues. In our view, the relief as sought for by the petitioner, in no way runs contrary to the object of the Code, 2016 or the precise purpose for which Page 5 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024 NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined Section 14 was provided for. It is precisely for this reason, that we believe that making such an argument by the respondent is a self defeating argument. On one hand, the respondent, is facing liquidity issues resulting into initiation of insolvency proceedings and surprisingly on other hand is opposing the prayer of a borrower who intends to make payment to the respondent, which should be the need of the hour, as far as the respondent is concerned. We are yet to notice a plea taken by an entity facing insolvency proceedings, to oppose the prayer of the petitioner which is proposing to make payment of its dues payable to respondent. In our opinion, the interpretation sought to be given by the respondent, is a self defeating argument and hence we express our inability to accept the same."
8. On the other hand, Mr. Patel, learned Counsel for the respondent bank has submitted that the bank has granted indulgence in favour of the petitioners however, the petitioner have failed to show their bonafide and therefore, the respondent bank has initiated the proceedings for taking over the possession as per provision under SARFAESI Act. He has further submitted that the petitioners have breached the condition mentioned in the OTS Scheme and therefore, this Court may not entertain present petition. 8.1 In support of his submission Mr. Patel, learned Counsel for the respondent bank has referred to and Page 6 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024 NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined relied upon the recent decision of the Hon'ble Apex Court in case of State Bank of India vs. Arvindra Electronics Pvt. Ltd. passed in Civil Appeal No. 6954 of 2022 and more particularly paragraph No.6.6 and 7 which read as under:-
"6.6 It is required to be noted that under the OTS Scheme which was originally sanctioned in the year 2017 the borrower was required to pay Rs.10,53,75,069.74 against the outstanding of Rs. 13,99,89,273.99. Therefore, under the original sanctioned OTS Scheme the borrower was getting the substantial relief of approximately 3 crores. The Bank agreed and accepted the OTS offer on the terms and conditions mentioned in the letter dated 21.11.2017. In the sanctioned letter dated 21.11.2017 it was specifically mentioned in Clause (iv) that the entire payment under the OTS Scheme was to be made by 21.05.2018, otherwise OTS would be rendered infructuous. Therefore, borrowers were bound to make the payment as per the sanctioned OTS Scheme. Therefore, the High Court ought not to have granted further extension de hors the sanctioned OTS Scheme while exercising the powers under Article 226 of the Constitution of India.
7. The submissions on behalf of the borrower that in case of some other borrowers the time was extended is concerned, the same is neither here nor there. The Bank mutually can agree to extend the time which is permissible under Section 62 of the Indian Contract Act. The borrower as a matter of right cannot claim that though it has not made the payment as per the sanctioned OTS Scheme still it be granted further extension as a matter of right. There cannot be any negative discrimination claimed. The borrower has to establish any right in their favour to claim the extension as a matter of right."
Page 7 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024
NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined
9. I have perused the relevant material available on record. It appears that the respondent bank has initiated proceeding relying upon the order passed under Sections 13(2) and 13(4) of the SARFAESI Act. The bank has also acceded the request of the petitioners with regard to OTS Scheme and the bank has granted an indulgence in favour of the petitioners by way of granting time to pay remaining dues in five months equal installments, however the petitioners have failed to deposit the remaining two installments, as per undertaking filed before the Bank in OTS Scheme.
10. In view of the above circumstance, this Court cannot exercise the power under Articles 226 and 227 of the Constitution of India, and present petition does not deserve to be entrained. Now, it is well settled that alternative efficacious remedy is available to the petitioners to challenge the impugned action of the respondent bank before the Debt Recovery Tribunal.
11. It appears that only to avoid the Court fees, the Page 8 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024 NEUTRAL CITATION C/SCA/4171/2024 ORDER DATED: 13/03/2024 undefined petitioners have filed present petition directly before this Court under Articles 226 and 227 of the Constitution of India. Under such circumstances, as per the law laid down by the Hon'ble Apex Court once the petitioners have breached the condition of OTS Scheme, granted in favour of the petitioners, I am of the opinion that the petitioners are not entitled to get any benefit as prayed for in present petition.
12. In view of the above, the petition is devoid of any merits and the same is required to be dismissed. Accordingly present petition is hereby dismissed.
13. It is open for the petitioners to make appropriate request before the concerned Debt Recovery Tribunal, as the petitioners have already approached the Debt Recovery Tribunal by way of filing appropriate application, in view of recent development by receiving notice for physical possession.
(HEMANT M. PRACHCHHAK,J) SURESH SOLANKI Page 9 of 9 Downloaded on : Thu Mar 14 21:47:51 IST 2024