Gujarat High Court
State Bank Of India vs Hubtown Bus Terminal (Vadodara) Pvt Ltd on 18 October, 2022
Bench: Aravind Kumar, Ashutosh J. Shastri
C/LPA/1/2022 ORDER DATED: 18/10/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 1 of 2022
In
R/SPECIAL CIVIL APPLICATION NO. 10985 of 2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
In
R/LETTERS PATENT APPEAL NO. 1 of 2022
With
CIVIL APPLICATION (FOR MODIFICATION OF ORDERS) NO. 2 of 2022
In
R/LETTERS PATENT APPEAL NO. 1 of 2022
With
CIVIL APPLICATION (FOR EXTENSION OF TIME) NO. 3 of 2022
In
R/LETTERS PATENT APPEAL NO. 1 of 2022
With
CIVIL APPLICATION (FOR MODIFICATION OF ORDER) NO. 4 of 2022
In
R/LETTERS PATENT APPEAL NO. 1 of 2022
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STATE BANK OF INDIA
Versus
HUBTOWN BUS TERMINAL (VADODARA) PVT LTD
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Appearance:
MR R.S. SANJANWALA, SENIOR ADVOCATE WITH
MR RITURAJ M MEENA(3224) for the Appellant(s) No. 1
for the Respondent(s) No. 3
MR SHALIN MEHTA, SENIOR ADVOCATE WITH
MR ARJUN R SHETH(7589) for the Respondent(s) No. 1
MR HARDIK C RAWAL(719) for the Respondent(s) No. 2
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
ARAVIND KUMAR
and
HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 18/10/2022
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR)
1. This appeal has been filed by the secured creditor Page 1 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 assailing the correctness and legality of the judgment and order dated 10.12.2021 passed in Special Civil Application No.10985 of 2021 whereunder the learned Single Judge has issued certain directions which reads as under:
"9. In view of the above facts, it would be in interest of justice in all lease deeds executed and the amount of premia deposited by the petitioner as well as with regard to the cases in which the petitioner has accepted the part amount of premia which is deposited in the escrow account for which the agreement to lease is executed, it is ordered that the respondent-Bank has deemed to have issued the No Objection Certificate on the date on which such lease deeds and agreements to lease are executed.
10. Therefore, as far as the lease deeds which are executed or which are executed in part, there shall not be any need for issuance of No Objection Certificates by the respondent-Bank subject to the right of both the sides to agitate before the appropriate forum with regard to the fulfillment of the terms and conditions of the agreement entered into between the petitioners and the respondent- Bank.
11. It is also directed that the petitioner shall co-Page 2 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022
C/LPA/1/2022 ORDER DATED: 18/10/2022 operate and provide all the information which the respondent-Bank requires for the purpose of investigation or any other purpose in accordance with law.
12. It is also made clear that in future if the petitioner wants to execute any lease deed and it shall make an application for No Objection Certificate from the Bank and if the respondent Bank within one week fails to issue any No Objection Certificate, then the petitioner is permitted to execute lease deed on condition of deposit the entire amount in the escrow account."
2. Respondent No.2 and respondent No.1 had entered into a concession agreement on 26.8.2010 whereunder respondent No.1 was given right to develop, design, finance, construct, operate and maintain GSRTC Bus Terminal at Makarpura, Vadodara and to put up a building and lease the units under the commercial facility. Respondent No.1 entered into a loan agreement on 28.9.2012 with the appellant for extension of financial facility to undertake the project envisaged under under the agreement dated 26.8.2010. On account of respondent No.1 having borrowed the amount from appellant bank and defaulted Page 3 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 in payment of loan installments, appellant bank after having classified the loan account of respondent No.1 as an NPA account has filed OA No.1000 of 2018 before the Debts Recovery Tribunal, Ahmedabad for recovery of its dues. On 26.7.2018, the Tribunal passed an ad-interim ex parte order restraining the respondent No.1 from transferring, alienating or creating any encumbrance in any manner the movable and immovable assets that has been mortgaged / hypothecated in favour of the bank. Seeking modification of the said order, IA No.2360 of 2020 came to be filed by respondent No.1 and filed IA No.1922 of 2021 seeking direction for extension of OTS period. The said applications came to be disposed of by order dated 22.7.2021 under which application for modification came to be allowed partly and application for extension of OTS came to be dismissed. Hence, both appellant and respondent No.1 herein filed appeals before the Debts Recovery Appellate Tribunal, Mumbai - respondent No.3 herein in Appeal No.73 of 2021 and Appeal Nos.25/2021 and 450/2021 respectively. On account of there being no Presiding Officer of Debts Recovery Appellate Tribunal, Mumbai, respondent No.1 approached this Page 4 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 Court in Special Civil Application No.10985 of 2021 in which the impugned order dated 10.12.2021 came to be passed by issuing certain directions to the appellant bank and as such, the present appeal has been filed. The matter was listed from time to time and arguments have been canvassed on more than one occasion. However, wisdom having dawned on the parties it has resulted in settlement being arrived at between contesting parties viz. appellant (State Bank of India) and respondent [Hubtown Bus Terminal (Vadodara) Pvt. Ltd.] whereunder both parties have agreed and consented for modification of the impugned order as per the terms set out in the consent terms filed today. The terms as agreed to between the parties read as under:
"a. That the amount of Rs.5.80 crores lying in RERA Account with Appellant shall be appropriated towards the loan account of the Respondent no.1 with the Appellant.
b. With regard to any units where final NOCs has not been issued, the Respondent No.1 shall provide requisite details for such units while making application for seeking NOC.Page 5 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022
C/LPA/1/2022 ORDER DATED: 18/10/2022 c. However, if the Appellant is not satisfied with
the value consideration of such unit(s) then the R1 at its option may deposit the differential amount in the RERA / Escrow account with the Appellant for the release of provisional NOCs with the Appellant or alternatively, with regard to any dispute between the parties (including but without limitation) in respect of issuance of NOCs or valuation of units or any other issues for the units where NOC has not been issued, it will be open for either party to approach the Hon'ble DRT, Ahmedabad in the pending OA by filing an IA and the Hon'ble DRT, Ahmedabad will decide the said application in accordance with law as expeditiously as possible and within an outer limit of 3 months.
d. If the Appellant is satisfied with the value consideration of the unit(s) and the R1 has deposited the differential amount as sated above in clause 'c', the Appellant shall promptly release provisional NOC(s) for such units.
e. On release of provisional NOC(s), the R1 shall promptly deposit the agreement value of the unit for which NOC(s) is sought including the differential amount as stated above in clause 'c', in RERA / Escrow account with the Appellant.Page 6 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022
C/LPA/1/2022 ORDER DATED: 18/10/2022 f. That on deposit of the agreement value of such
units including the differential amount as stated above in clause 'c' in the RERA / Escrow account for which provisional NOC(s) is issued, the Appellant shall promptly issue final NOC(s) for execution and registration of respective lease deed(s).
g. For the units where R1 has deposited entire value of the unit(s) as per clause 'e' including the shortfall in valuation as stated above in clause 'c' above, and subsequently the lease premia from the bankers of the purchasers is deposited into the RERA / escrow account pursuant to execution and registration of such lease deeds, the Appellant shall be entitled to appropriate the latter amount from the RERA / Escrow account (viz. 'premia from bankers'). Thereafter, the amounts already deposited by the R1 as referred in this clause 'g' to the extent received from the bankers of the purchaser, the same shall be considered towards future NOCs for remaining units.
h. To trigger the aforesaid arrangement, the R1 shall deposit a sum of Rs.50,00,000/- within 7 working days of passing of order by this Hon'ble Court for implementing this arrangement which amount shall considered towards future NOCs for remaining units, as per clause 'e' and 'g' Page 7 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 hereinabove.] i. This arrangement will be continued and valid for a period of 1 year from the date of the order that may be passed by this Hon'ble Court, subject to further time that may be mutually agreed between the Appellant and the R1 for the purpose of issuance of NOC and for the remaining units in the commercial facilities.
j. Towards the end, after issuance of NOCs of all the units and all units are disposed of, the additional funds brought in by the R1 in the RERA / escrow account with the Appellant under the arrangement mentioned herein (which is greater than the aggregate value of the units leased out under this arrangement) shall forthwith be returned to the Respondent no.1 by the Appellant. It is clarified that the Appellant shall appropriate amounts from the RERA / Escrow account only to the extent of the value mutually agreed between the Appellant and R1 of the unit(s) for which NOC is issued for execution of lease deeds.
k. This Hon'ble Court be pleased to direct the Hon'ble DRAT, Mumbai to decide two appeals filed by Respondent No.1 and one appeal filed by the Appellant together within an outer limit of 3 months Page 8 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 from a date of receipt of copy of this order.
l. The Appellant and the Respondent No.1 are at liberty to work out a settlement in an expeditious manner for repayment of the outstanding loan amount to be mutually agreed upon and the time frame thereto and for the disposal of the balance units in the commercial facilities.
m. This Hon'ble Court be pleased to direct the Hon'ble NCLT, Ahmedabad before whom the insolvency petition being CP (IB) No.363 of 2020 is instituted by the Appellant, to defer the hearing of the same for a period of 6 months from the date of receipt of a copy of this order."
3. Above said consent terms results in respondent No.2 herein executing the lease deed in favour of lessees and the lessees, in turn, would deposit the amount payable to respondent No.1 in an escrow account with the appellant bank who, in turn, would be entitled to appropriate the same towards loan account, for which NOCs are to be furnished by appellant bank and same having been agreed to be furnished by the appellant as stated in the terms of settlement noted hereinabove, this appeal would stand disposed of in terms of the Page 9 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 settlement arrived at and substituting the order of the learned Single Judge to that of the terms set out hereinabove.
4. It is made clear that respondent No.2 herein shall execute the lease deeds in respect of the parties identified by respondent No.1 as agreed under the concession agreement dated 26.8.2010 and subject to the consent terms as entered into hereinabove between appellant and respondent No.1.
5. In view of the above, the interim order passed in this appeal stands vacated and by virtue of the same, parties would be required to act upon the consent terms in true letter and spirit. It is also made clear that by virtue of the settlement having been entered into between the parties, Special Civil Application No.10985 of 2021 would not survive and writ applicant viz. applicant in the said Special Civil Application would file necessary purshis for withdrawal of the said Special Civil Application before the learned Single Judge and it is also made clear that in the insolvency petition being CP (IB) No.363 of 2020 filed by appellant bank which is pending before the National Company Law Tribunal, Ahmedabad would be deferred Page 10 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022 C/LPA/1/2022 ORDER DATED: 18/10/2022 as agreed between the parties for a period of six months from the date of receipt of the copy of this order, in view of the application for OTS filed by respondent No.1 before the appellant being pending and in view of the consent terms entered into between the parties. In view of appellant and respondent No.1 making attempts to work out a settlement for repayment of the outstanding loan amount as may be mutually agreed upon including the time-frame thereto which we do hope and trust would be brought about between the parties in view of the present settlement, the appeals before the Debts Recovery Appellate Tribunal may also be rendered infructuous and in such an event, the parties would be at liberty to make mention before the Debts Recovery Appellate Tribunal for appropriate orders being passed thereon. Accordingly, appeal stands disposed of. All pending applications stand consigned to records.
(ARAVIND KUMAR,CJ) (ASHUTOSH J. SHASTRI, J) Bharat Page 11 of 11 Downloaded on : Fri Oct 21 20:13:23 IST 2022