Calcutta High Court
Mountview Tracom Llp vs Apl Metals Limited on 19 April, 2022
Author: Shekhar B. Saraf
Bench: Shekhar B. Saraf
ODC-20
ORDER SHEET
EC/49/2022
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
MOUNTVIEW TRACOM LLP
-VS-
APL METALS LIMITED
BEFORE:
The Hon'ble JUSTICE SHEKHAR B. SARAF
Date : April 19, 2022.
Appearance:
Mr. Jisnhu Chowdhury, Adv.
Ms. Radhika Singh, Adv.
Mr. Chayan Gupta, Adv.
...for the Award-holder
Mr. Gopal Pahari, Adv.
Ms. Mandeep Kaur, Adv.
...for the Award-debtor
Mr. N. Srinibas, Adv.
Mr. R. K. Jha, Adv.
...for Indian Bank
The Court : An order was passed on 5th April, 2022 by this Court that is
delineated below:
"The Court: Heard counsel appearing on behalf of the parties.
On the last occasion this Court had directed the judgment debtor to take
instructions with regard to the manner in which they would secure Rs. 8 crores
that is payable to the award holder. Counsel appearing on behalf of the
respondent has submitted that their bank is unable to provide a bank
guarantee. Counsel further seeks time for a week to take further instructions in this matter. The answer received from the respondent is not sufficient and clearly shows a callous approach to the entire matter. It is recorded in the 2 earlier orders that the company is running a business wherein the revenue of the company is Rs.633 crores.
In light of the same, the award debtor who is enjoying a cash credit facility with Indian Bank for a sum of Rs.114 crores shall not be allowed to avail credit to the extent of Rs. 8 crores representing the decree of the decree holder. This margin shall also be maintained while availing of the cash credit facility, as if the above amount lies in the account to the credit of the decree holder.
In case the bank wants to cancel the cash credit facility for any default on the part of the judgment debtor, the above amount would immediately be set apart in a separate account to the credit of the petitioner and thereafter the facility be cancelled.
This order will not come in the way of any transaction between the Bank and the judgment debtor. Any change in this position should be made by the bank upon notice to the decree holder. The above order passed by me is keeping in inconsonance with an order passed by the Hon'ble Justice I. P. Mukerji, J. in Cliff Navigation S.A. vs. LMJ International Ltd. (GA No.3167 of 2012, EC No.302 of 2012) dated 24th January, 2013. It is to be noted that the order dated 24th January, 2013 was upheld by the Supreme Court by an order dated 9th February, 2015.
The matter is made returnable two weeks hence.
The judgment debtor will be present on the returnable date." Today in Court counsel on behalf of Indian Bank submitted that the order with regard to keeping aside Rs.8 crores with regard to Cash Credit Facility is not feasible as the entire amount of Rs. 57 crores with regard to the Cash Credit Facility has been availed by the judgment-debtor. With regard to balance 57 crores, he submitted that they are in relation to letter of credits and bank guarantees and non-fund based facilities and that cannot be touched by them. 3
Subsequently, Mr. Sahaya, Director of the Company, was examined in Court, transcription of which is provided below:
"To Mr. Jishnu Chowdhury, Advocate, in examination You are a Director of the judgment-debtor?/ Yes, I am the Director.
What is your salary that you draw from the judgment-debtor?/ My basic salary package is Rs. 60 lakh per year.
Do you also utilize any other assets of the judgment-debtor?/ No, I do not.
Does the car in which you move belong to the judgment-debtor?/ It belongs to the company and it is a part of my salary package. The car is also on hire purchase and if I am not wrong, it is through HDFC Bank.
Would it be possible for you to indicate the brand name of the wrist watch that you are wearing?/I am wearing a Rolex watch.
Would you also indicate the brand name of the spectacle and the pen which I can see in your pocket?/ Brand name of the spectacle is Montblanc.
Does the pen have some star at the top?/ Yes. Does the pen, wrist watch and the spectacle belong to the company?/ No, these are my personal assets.
What is the brand of the car?/ The car is Mercedes. How many bank accounts do the judgment-debtor have?/ As per new RBI guidelines, a Cash Credit Account holder is only permitted to have Cash Credit Account and since we have various accounts of limits with Indian Bank and with Axis Bank, we have a separate account for Packing Credit, we have a separate account for ECFC, we have a separate account for EFC and we have separate factory expenditure account where the money is transferred from the Cash Credit Account to Indian Bank Account for expenses of the factory. I cannot tell exact 4 number of accounts but there would be 7/8 bank accounts within Indian Bank under different categories.
Apart from Indian Bank, you have mentioned Axis Bank?/ Yes, which is recently maintained in Axis Bank and we have mentioned that also.
Apart from Axis Bank and Indian Bank, you do not operate bank account with any third Bank?/ We had one account earlier which was in Kotak Mahindra that account was subsequently closed. We have some other accounts for last 20/30 years which are no longer operative.
To Court What is the value of Stock in trade presently?/ Stock in trade, exact figure I will not be able to say.
Approximately tell?/ We will be having at least not less than 40/50 crores.
To Counsel What is the product that is manufactured in your factory and what is the raw material which is used for these manufacturing?/ Our main raw material is different kinds of lead scraps and final product is refined lead and lead alloys.
What is the value of the lead scraps which you have at your factory?/ Exact value I cannot tell immediately. Like I said, the total stock will be not less than 40/50 crores."
From the above, it is blatantly clear that the judgment-debtor is very much rich in funds and has tied the said funds with banks and financial institutions to ensure that payments of the Award is not possible in any manner. The immovable property that had been offered on an earlier occasion has been rejected by the Court.
5
Counsel on behalf of the judgment-debtor submits that the immovable property offered earlier is worth Rs.10 crores. The Court is unable to understand why this property could not be sold by the judgment-debtor to make the payment of Rs.8 crores that is pending to the award-holder. The clear impression the Court gets is that the judgment-debtor wishes to continue to reap profit by merrily continuing his business without making any effort whatsoever to pay back the legitimate dues of the award-holder. This Court is of the view that the stock in trade of the company that is worth over Rs.40 crores (as submitted by Mr. Sahaya in his deposition) should be utilized for paying back the dues of the award-holder. The façade that has been created by the judgment-debtor working in tandem with the banks that are providing the various facilities to the judgment-debtor is, in my opinion, only a mechanism to avoid payment of its dues.
At this juncture, counsel on behalf of the judgment-debtor has prayed for two days' time to deposit a sum of Rs.4 crores to show his bona fide.
In light of the above, the judgment-debtor is directed to make the said deposit with the Registrar, Original Side and show proof of the same before this Court on the returnable date.
The matter is made returnable on 22nd April, 2022.
(SHEKHAR B. SARAF, J.) sp3