Madras High Court
M/S.Sbq Steels Ltd vs Indian Bank on 27 February, 2014
Equivalent citations: AIR 2014 (NOC) 452 (MAD.)
Bench: M.Jaichandren, K.Kalyanasundaram
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.2.2014
Coram:
THE HONOURABLE MR.JUSTICE M.JAICHANDREN
and
THE HONOURABLE MR.JUSTICE K.KALYANASUNDARAM
W.P.No.3433 of 2014
M/S.SBQ STEELS LTD. [ PETITIONER ]
6/13, NORTH AVENUE,
KESAVA PERUMAL PURAM
CHENNAI-28
Vs
1 INDIAN BANK
ZONAL OFFICE CHENNAI (NORTH)
CREDIT DEPARTMENT
55 ETHIRAJ SALAI
CHENNAI-8
REP.BY ITS GENERAL MANAGER/ ZONAL MANAGER
2 INDIAN BANK
HARBOUR BRANCH
66 RAJAJI SALAI
CHENNAI-1
REP.BY ITS ASSISTANT GENERAL MANAGER
3 INDIAN BANK
GUDUR BRANCH
13/92 RAJA STREET
GUDUR TOWN
NELLORE DISTRICT
REP.BY ITS BRANCH MANAGER [ RESPONDENTS ]
This writ petition has been filed to issue a writ of Mandamus directing the respondents to transfer the amount of Rs.4,54,66,900/- that was lying to the credit of the petitioner with the third respondent bank in Account No. 927655252 and which was transferred to the account of the petitioner (account No.6188268518) with the second respondent on 24th January 2014 to the TRA Account of the petitioner with the Bank of India as per the minutes of Monitoring committee meeting dated 8.1.2014.
For petitioner : Mr.S.R.Rajagopal
for Mr.V.Anil Kumar
For respondents : Mr.Jayesh B.Dolia
for M/s.Aiyar & Dolia
O R D E R
(The order of the Court was made by M.JAICHANDREN J.,) Heard the learned counsel appearing for the petitioner and the learned counsel appearing on behalf of the respondents.
2. It has been stated that the petitioner is engaged in the business of manufacturing of iron and steel products. The petitioner had established the factory in Nellore District, in the state of Andhra Pradesh, for manufacturing the iron and steel products. The petitioner had approached several banks, including the respondent bank, for availing a loan facility. The petitioner had mortgaged certain immovable properties, as security. After obtaining the loan facility, the petitioner had been carrying on the business in the manufacture of iron and steel products. While so, the petitioner had incurred financial losses, due to various factors. Therefore, the petitioner could not repay the loan amounts, within the stipulated period. In such circumstances, the respondent bank had given instructions to their Branch at Gudur, to freeze the accounts of the petitioner. Thus, the respondent bank had acted in an arbitrary, high handed and illegal manner, contrary to the principles of natural justice. There is no law authorizing the respondent bank to exercise a lien on the amount lying in the account of the petitioner. There is no power or authority vested in the respondent bank to set off the amount towards the liability of the petitioner.
3. It has been further stated that the act of the respondent bank in claiming a lien, in respect of the amount lying, in the account of the petitioner, in its Gudur branch, cannot be held to be valid in the eye of law. In such circumstances, the petitioner had filed the present writ petition before this Court, under Article 226 of the Constitution of India.
4. Mr.S.R.Rajagopal, the learned counsel appearing for the petitioner had submitted that the act of the first respondent bank in issuing certain instructions for the freezing of the accounts of the petitioner, with the second respondent and the directions issued for the transfer of the amount to the third respondent, for being appropriated, without obtaining the necessary consent or approval from the petitioner, is contrary to the relevant provisions of law, including the rights of the petitioner enshrined in the Constitution of India.
5. The learned counsel appearing for the petitioner had further submitted that, in the monitoring committee meeting held on 8.1.2014, it had been acknowledged that the act of the respondent bank, in freezing the account of the petitioner, and the appropriation of the account, unilaterally, was in violation of the banking norms.
6. The learned counsel appearing for the petitioner had further submitted that the respondent bank is not authorized by the provisions of the Banking Regulation Act and the Indian Contract Act, 1872, for freezing of the accounts of the petitioner. There are no circulars issued by the Reserve Bank of India giving the power to the banks, to commit such acts, without the prior approval of the petitioner. The act of the respondent bank is contrary to the decisions taken in the monitoring committee meting, held on 8.1.2014.
7. Per contra, Mr.Jayesh B.Dolia, the learned counsel appearing for the respondent bank, had submitted that the respondent bank has a general lien on the amount lying in the account of the petitioner, as per Section 171 of the Indian Contract Act, 1872.
8. He had further submitted that the minutes of the monitoring committee meeting, held on 8.1.2014, cannot grant any right or privilege to the petitioner. Therefore, the claims made by the petitioner, in the present writ petition, cannot be sustained.
9. In view of the submissions made by the learned counsels appearing on behalf of the parties concerned and on a perusal of the records available, we are of the considered view that the petitioner has not shown sufficient cause or reason for this Court to grant the reliefs, as prayed for by the petitioner, in the present writ petition.
10. Nothing has been shown, by the petitioner, to substantiate its claim that the minutes of the monitoring committee meeting, held on 8.1.2014, would be binding on the respondent bank. It is also noted that the monitory committee is not a respondent in the present writ petition.
11. It is not for this Court to decide, at this stage, as to whether the minutes of the monitoring committee meeting, held on 8.1.2014, would create a contractual obligation between the petitioner and the respondent bank. However, it is clear that the respondent bank had invoked its right of lien, as per the provisions of section 171 of the Indian Contract Act, 1872. The said act had not been challenged, by the petitioner, before the appropriate forum, in the manner known to law. Nothing has been shown by the petitioner to substantiate its claim that the minutes of the monitoring committee meeting held, on 8.1.2014, creates certain rights in favour to the petitioner, to challenge the acts committed by the respondent bank.
12. Further, it is not in dispute that the petitioner has not challenged the letter of the respondent bank, dated 30.1.2014, rejecting the request of the petitioner for de-freezing its current account maintained at the Gudur Branch and to transfer the available funds to the TRA account in the Bank of India.
13. In such circumstances, we find no merit in the present writ petition. As such, the contentions raised on behalf of the petitioner cannot be countenanced. Therefore, the writ petition is liable to be dismissed. Hence, it is dismissed. No costs.
(M.J.J.) (M.K.K.S.J.) 27.2.2014 To:
1 THE GENERAL MANAGER/ ZONAL MANAGER INDIAN BANK ZONAL OFFICE CHENNAI (NORTH) CREDIT DEPARTMENT 55 ETHIRAJ SALAI, CHENNAI-8 2 THE ASSISTANT GENERAL MANAGER INDIAN BANK, HARBOUR BRANCH 66 RAJAJI SALAI, CHENNAI-1 3 THE BRANCH MANAGER INDIAN BANK, GUDUR BRANCH 13/92 RAJA STREET GUDUR TOWN, NELLORE DISTRICT M.JAICHANDREN J., and K.KALYANASUNDARAM J., lan W.P.No.3433 of 2014 27.2.2014