Debt Recovery Appellate Tribunal - Madras
Vijaya Bank vs Murudeshwara Foods And Exports Ltd. And ... on 13 December, 2002
Equivalent citations: III(2003)BC80
ORDER
A. Subbulakshmy, J. (Chairperson)
1. The proposed party M/s. Naveen Hotels Ltd., filed IA-16 for impleading it as party as additional defendant in the OA and that petition was allowed by the Tribunal. Aggrieved against the order the appellant Bank has come forward with this appeal.
2. Counsel for the appellant Bank submitted that M/s. Naveen Hotels is not at all a necessary party to the OA and the proposed party the 2nd respondent does not get any legal right over the Hosabettu Unit of the 1st respondent and the 3rd party the 2nd respondent claims as right under an unregistered agreement and the proposed party the 2nd respondent has not produced any document to show its ownership to claim right over the said property and the alleged charge said to have been registered by the Registrar of Companies on 25.8.1998 does not convey any legal right as all the movable and immovable properties are mortgaged in favour of the Bank and said charge could not have been registered on the basis of the alleged agreement and as the properties both movable and immovable have already been hypothecated and mortgaged in favour of the applicant Bank by the 1st respondent as security for the loans advanced in the year 1995-96, the proposed party does not get any right over the property and the order passed by the Presiding Officer, DRT, allowing the impleadment petition is not sustainable.
3. Counsel for the proposed party 2nd respondent submits that a valid charge was created by the 1st respondent company in favour of IDBI and the 2nd respondent discharged the loan due to IDBI and thereafter that charge was created in favour of the 2nd respondent company and the proposed party has entered into an agreement with the 1st respondent company for purchasing certain properties and paid substantial amount to the 1st respondent company and so the 2nd respondent company has to be impleaded as a party to the OA filed by the applicant Bank. The proposed party relies upon only the agreement of sale entered into between the 2nd respondent and the 1st respondent on 30.8.1996. In the agreement it is stated that the seller has decided to sell the plant and machinery and the building. The document relied upon by the proposed party is only an unregistered agreement of sale. Only basing upon this document the 2nd respondent intends to implead as a party in OA. the documents filed by the applicant Bank in the OA reveal that a charge has been created in respect of the plant, machinery and also the land the immovable property in favour of the applicant Vijaya Bank in the year 1996. Counsel for the 2nd respondent submitted that even prior to the creating of charge in favour of the applicant Bank, there was a charge in respect of the plant and machinery by the 1st respondent in favour of IDBI and the 2nd respondent alone cleared the loan due to IDBI and thus a charge has been created in favour of the applicant Bank.
4. On a perusal of the records, it is seen that in favour of IDBI a charge was created in respect of the plant and machinery alone on 29.12.1995. Only in respect of machineries there was a charge in favour of IDBI by virtue of the Deed of Hypothecation dated 29.12.1995 as evidenced by the Search List filed. The IDBI has written letter to the 1st respondent stating that the loan due by the 1st respondent has been cleared. The 1st respondent has written letter to the IDBI stating that the 1st respondent has cleared loan due to IDBI along with interest through Naveen Hotels Ltd. the 2nd respondent by letter dated 19.9.1997. The 2nd respondent Naveen Hotels Ltd., has also written a letter to the IDBI stating that at the request of the 1st respondent they are enclosing cheque for Rs. 1,18,207/- towards the clearance of overdue liability of the 1st respondent and also request the IDBI to issue letter of confirmation that overdue amount of Murudeshwar Foods and Exports Ltd., is cleared by their Company. IDBI also has acknowledged the receipt of the cheque in its letter dated 25.3.1998 and has further stated that there are no dues payable to the IDBI in respect of the said account by the 1st respondent. So, it is evidenced from these documents that only plant and machinery were hypothecated to the IDBI and that the loan due to IDBI was cleared by the respondents.
5. What has been mortgaged to the applicant Bank is the plant and machinery as well as land and property at Hosabettu Unit. It is evidenced by the documents filed by the Bank i.e. movable assets situated at Hosabettu Unit, plant and machinery and other equipments and also immovable properties i.e. land in R.S. Nos. 23/9A/A2 and 23/IA/2 and 23/9A2 and 23-9B in Hosabettu. So, it is evidenced from these documents that the land and machineries in Hosabettu has been mortgaged to the Vijaya Bank and the appellant Bank has a charge over these properties. The original mortgage documents filed also prove that mortgage has been created in respect of plant and machinery and the immovable property at Hosabettu Unit, in favour of the appellant Bank. The Search Report filed also reveals that plant, machinery and immovable property have been mortgaged in favour of the appellant Bank. The 2nd respondent has not filed any documents to show that it has got right over the immovable property in Hosabettu Unit. Even in respect of the movable property i.e. plant and machinery, it has cleared the loan only due to the IDBI. The 2nd respondent has not cleared any loan due to the applicant Bank. There is also a charge over the plant and machineries in favour of the applicant Bank. The immovable property at the Hosabettu Unit i.e. land, has also been mortgaged in favour of the applicant Bank as evidenced by the documents. The proposed party relies upon the search report given by the company secretary wherein it is stated that a charge has been created in favour of the 2nd respondent Naveen Hotels Ltd., on 30.8.1996 in respect of the machineries as well as the immovable properties in Hosabettu and others places. The documents dated 30.8.1996 is only an unregistered sale agreement. Except that document, no document is filed to show that the 2nd respondent has got any charge over the properties. No right can be created under the unregistered sale agreement. There is no mortgage deed in favour of the 2nd respondent. Only, based on the unregistered safe agreement the 2nd respondent wants to rely upon his case and wants to be impleaded as party in the OA. The OA is between the appellant Bank and the 1st respondent the borrower. For the amount due from the 1st respondent the appellant Bank has filed that OA. The documents filed also reveal that a charge has been created in favour of the appellant Bank in respect of the plant and machineries and also in respect of the immovable property at Hosabettu Unit.
6. As I have already stated, an unregistered sale agreement cannot be relied upon and the 2nd respondent cannot rest his case solely on the unregistered agreement stating that a charge has been created in its favour also under the unregistered sale agreement. The charge in favour of the appellant Bank was created as early as 1995. In the absence of any specific documents creating charge in favour of the proposed party it is not open to the 2nd respondent to contend that it is also a necessary party to the OA. The 2nd respondent has no right over the immovable properties situated at Hosabettu Unit. The documents reveal that the 2nd respondent is an unnecessary party to the OA and it need not be impleaded as a party in the OA.
7. The Presiding Officer, DRT, Bangalore, in his order has stated that the Official Liquidator has filed objection and in the objection statement he has confirmed with regard to the mortgage in favour of Naveen Hotels Ltd. The report filed by the Official Liquidator reveals that since the Registrar of Companies has given certificate that a charge has been created in favour of Naveen Hotels, the 2nd respondent the said Naveen Hotels is a necessary party. Only, based upon the objection filed by the Official Liquidator the Presiding Officer, DRT, has ordered for impleading the 2nd respondent as party in that OA. The Official Liquidator in his objection has mainly relied upon the certificate given by the Registrar of Companies. As per the search list, Registrar of Companies has stated that a charge has been created in favour of the 2nd respondent on 30.8.1996 under an unregistered sale agreement. An unregistered sale agreement cannot be taken as a valid title deed vesting the right in favour of the 2nd respondent and the 2nd respondent cannot rest his case based on that unregistered sale agreement. Unless there is some documents creating charge in favour of the 2nd respondent, the 2nd respondent cannot to be a necessary party to be impleaded in the OA. Absolutely there are no documents creating charge in favour of the 2nd respondent. The 2nd respondent is not at all a necessary party to the OA. The order passed by the Presiding Officer, DRT, Bangalore, is not sustainable and it is liable to be set aside.
8. In the result, appeal allowed. Order passed by the Presiding Officer, DRT, Bangalore, is set aside.