Gujarat High Court
State Bank Of India (Sbi) vs Uco Bank & 1....Opponent(S) on 21 January, 2014
Author: Ravi R.Tripathi
Bench: Ravi R.Tripathi, Mohinder Pal
O/OJA/1/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
O.J.APPEAL NO. 1 of 2014
In
COMPANY APPLICATION NO. 158 of 2013
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STATE BANK OF INDIA (SBI)....Appellant(s)
Versus
UCO BANK & 1....Opponent(s)
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Appearance:
MR UDAY R BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE RAVI R.TRIPATHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 21/01/2014
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE RAVI R.TRIPATHI)
1. State Bank of India, Overseas Branch is before this Court being aggrieved by judgment and order passed by the learned Company Judge in Company Application No.158 of 2013 in Company Petition No.138 of 2011 dated 08/12.08.2013, whereby the learned Company Judge disallowed the application with clarification that, "it would be open to the applicant to take out appropriate separate Notice declaring its intention, and follow the procedure prescribed by the Rules and seeking appropriate orders".
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O/OJA/1/2014 ORDER
(emphasis supplied)
2. Learned Advocate for the appellant Bank
vehemently submitted that the learned Company Judge has committed an error in holding that the Bank can get itself joined as party after or at the state of Rule 34 read with Form-9. Learned Advocate for the appellant Bank strenuously submitted that the health of the company is good and the appellant Bank is the secured creditor and therefore, the learned Company Judge ought not to have entertained the petition filed by the other Bank, i.e UCO Bank and in any case, the appellant Bank is required to be joined as party to the said petition filed by the UCO Bank.
3. This Court is of the opinion that the present litigation is a sponsored litigation, where the secured creditor has come forward to this Court and pleads that the health of the borrower company is good enough to enable it to revive. This Court is restraining itself from making any further comment about the conduct of the appellant Bank which at one stage submitted that the appellant Bank did not know about the proceedings and then in the second breath submitted that the appellant Bank is bound to come to know about the proceedings.
4. Learned Advocate for the appellant Bank Page 2 of 7 O/OJA/1/2014 ORDER submitted that the Bank is in know of the CDR exercise and therefore, the Bank is supposed to know.
5. The Court is not able to accept the contradictory submissions made by the learned Advocate for the appellant Bank. Besides that, learned Advocate for the appellant Bank is not able dismantle or dislodge the following observations made by the learned Company Judge in para-18.7, relevant part of which reads as under:-
"However, in present case, it is pertinent to mention that the applicant has preferred application not only after the petition came to be admitted vide order dated 7.3.2012, but even much after (almost 1 year after) the extended period of 1 month which was allowed by the Court to the respondent company to pay amount in question, expired.
It would be appropriate to recall, in this context, that the petition came to be admitted vide order dated 7.3.2012 and the respondent was granted time to pay the petitioner, the amount in question, and for that purpose, the order permitting/directing the petitioner to publish notice of admission of petition was deferred until 24.4.2012.
During the entire period, the applicant did not prefer any application much less any specific application to intervene in the proceedings.Page 3 of 7
O/OJA/1/2014 ORDER Even at the stage of OJ Appeal, the applicant did not prefer any application before the Hon'ble Division Bench.
After the appeal came to be withdrawn and the petition was to be considered further, at that stage also, present applicant did not prefer any application and, at eleventh hour, the applicant has come out with present application.
Besides the said distinguishing feature, which not only brings out inordinate delay on the part of the applicant, the application is also distinguished from the application in the cited case, inasmuch as the applicant has neither taken out Notice of intention to support or oppose the petition nor has the applicant preferred application to intervene in the matter, but has preferred the application seeking that it may be joined as party respondent in the petition filed by 3rd party and has not even followed the procedure prescribed under the Rules.
Moreover, for unexplained reasons, the applicant does not want to follow the procedure prescribed under the Rules i.e. Rule-34 r.w. Form 9.
If the applicant wants to oppose (or support) the company petition, then, appropriate application in accordance with Rule-34 is required to be presented to the Court in the manner prescribed by the said Rule.Page 4 of 7
O/OJA/1/2014 ORDER In the cited case, the issue with reference to and in light of Rule-34 r.w. Form 9 did not arise for consideration by the Hon'ble High Court.
Moreover, when specific provision is made under the Rules and such provision also prescribes certain procedure, then, such provision and the prescribed procedure must be followed cannot be given a go-bye by the Court.
If present application is granted, it would amount to circumventing the provision under Rule 34 and that therefore also, the application does not deserve to be granted.
When there is a specific provision under Rule 34 and when the said provision prescribes certain requirements, then, the applicant Bank cannot insist, that it should be joined as party respondent in company petition preferred by another creditor, more so when the applicant bank has right to, (a) prefer its own independent petition for its claim (Sections 433, 434 r.w. Section 439); (b) prefer a separate-substantive Notice/application to oppose (or support) the petition (Rule 34 r.w. Form 9); (c) can prefer its own separate and independent and substantive application and can seek appropriate relief direction to not make final order of winding-up or to stay the proceedings temporarily or permanently; then the relief for which the application is taken out cannot be granted in a petition preferred by some one else, i.e. a third party. In view Page 5 of 7 O/OJA/1/2014 ORDER of the provisions under the Act and the Rules, it is always open to the applicant Bank to take out appropriate separate Notice/application in accordance with Act and Rules and seek appropriate order.
(emphasis supplied)
6. Learned Advocate for the appellant Bank cited following decisions, without making available copy to the Court:-
I. In the matter of The State of Punjab & Anr., Vs. Shamal Murari & Anr., reported in AIR 1976 SC 1177.
Learned Advocate for the appellant Bank submitted that this judgment is rendered by Justice V.R. Krishna Iyer and it is held by the Hon'ble the Apex Court that procedure should not be shortcut in the matter of grant of justice.
II. In the matter of Jai Jai Ram, Manohar Lal Vs. National Building Material Supply, Gurgaon, reported in AIR 1969 SC 1267.
III. In the matter of Raj Narain Vs. Smt. Indira Nehru Gandhi & Anr., reported in AIR 1972 SC 1302.
IV. In the matter of National Textile Workers'
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O/OJA/1/2014 ORDER
Union, etc. Vs. P.R.Ramakrishhan & Ors.,
reported in AIR 1983 SC 75.
Learned Advocate for the appellant Bank made available a copy of this judgment. He relied upon the observations made by the Hon'ble the Apex Court in para-7.
V. In the matter of Vidur Impex and Traders Private Limited & Ors. Vs. Tosh Apartments Private Limited & Ors., reported in (2012) 8 SCC 384.
Learned Advocate for the appellant Bank invited attention of the Court to Head Note-D.
7. In light of the fact that the learned Advocate for the appellant Bank is not able to dislodge the observations made by the learned Company Judge, none of these decisions help him to advance the cause.
8. In the result, the appeal fails and the same is dismissed.
(RAVI R.TRIPATHI, J.) (MOHINDER PAL, J.) SHITOLE Page 7 of 7