Gujarat High Court
Hubtown Bus Terminal (Vadodara) Pvt Ltd vs State Bank Of India on 31 May, 2021
Author: Biren Vaishnav
Bench: Biren Vaishnav
C/SCA/7243/2021 ORDER DATED: 31/05/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7243 of 2021
==========================================================
HUBTOWN BUS TERMINAL (VADODARA) PVT LTD
Versus
STATE BANK OF INDIA
==========================================================
Appearance:
MR SHALIN MEHTA, SENIOR ADVOCATE WITH MR ARJUN R
SHETH(7589) for the Petitioner(s) No. 1
MR HARDIK C RAWAL(719) for the Respondent(s) No. 2
MR SIDDHARTHA SAMAL(3089) for the Respondent(s) No. 1
NOTICE SERVED(4) for the Respondent(s) No. 3
==========================================================
CORAM: HONOURABLE MR. JUSTICE BIREN VAISHNAV
Date : 31/05/2021
ORAL ORDER
1. Leave to delete respondent no. 3 from the array of parties.
2. Heard Mr. Shalin Mehta, learned Senior Counsel appearing with Mr. Arjun Sheth, learned advocate for the petitioner, Mr. Hardik Rawal, learned advocate for the respondent no. 2 - Gujarat State Road Transport Corporation (for short 'Corporation') and Mr. Siddhartha Samal, learned advocate for the respondent no. 1 - State Bank of India (for short 'Bank').
3. In this petition, under Article 226 of the Constitution of India, the prayer of the petitioner is for a writ of mandamus or an appropriate order directing respondent no. 1 - State Bank of India to issue (both) 'two step NOCs' for execution of lease deeds of units in favour of allottees as against payment under the OTS of the outstanding amount to the Bank.
4. This Court initially on 05.05.2021 passed the following order:
Page 1 of 6 Downloaded on : Wed Jun 02 20:13:13 IST 2021C/SCA/7243/2021 ORDER DATED: 31/05/2021 "1 Heard Mr.Shalin Mehta, learned Senior Advocate with Mr.Arjun Sheth, learned advocate for the petitioner and Mr.Siddharth Shamal, learned advocate, who appears on caveat for the respondent - State Bank of India.
2 The prayer in this petition is to issue an appropriate writ of mandamus or any other similar writ or be pleased to pass appropriate order directing the respondent-State Bank of India to issue N.O.C's for execution of the lease deeds of units in favour of allottees.
3 Mr.Shalin Mehta, learned Senior Advocate, would draw the attention of this Court to the letter of the bank dated 30.11.2020 addressed to the petitioner. He would have reservations on subclause b (VIII), wherein, the bank has shown its willingness to release the charge on the properties and guarantees on receipt of the entire OTS along with interest. He would submit that the petitioner would default on payment pursuant to the OTS, in case the properties are not released which are not the ownership of the petitioner but are of the Gujarat State Road Transportation Corporation, on whose behalf the terminal on which the properties are constructed is managed and the G.S.R.T.C also has no objection on execution of the lease deeds.
In fact, if the NOCs are so granted, execution of the lease deeds would facilitate payments in furtherance of the OTS.
3.1 Mr.Shalin Mehta, learned Senior Advocate, would rely upon the order passed by the Commercial Court, Ahmedabad, against another bank, namely, Canara Bank at page (238), where the Commercial Court has directed the bank concerned, Canara Bank, to issue NOC for execution of lease deeds in context of the same petitioner.
4 Mr.Shamal, learned Advocate, seeks time to file response.
5Issue Notice, returnable on 12.05.2021. Mr.Shamal, learned Advocate, waives service of notice on behalf of respondent No.1.For respondent No.2, the registry to communicate the service of notice through Email. On the returnable date, the Page 2 of 6 Downloaded on : Wed Jun 02 20:13:13 IST 2021 C/SCA/7243/2021 ORDER DATED: 31/05/2021 State Bank of India shall respond to what is recorded herein above and show cause as to why similar treatment be not given as given to the petitioner in the Commercial Court decision referred to herein above."
5. Thereafter on 12.05.2021, this Court passed the following order:
1. Heard Mr. Shalin Mehta, learned Senior Advocate appearing with Mr. Arjun R. Sheth, learned advocate for the petitioner and Mr. Siddhartha Samal, learned advocate for the respondent No.1 and Mr. Hardik C. Rawal, learned advocate for the respondent No.2.
2. Mr. Shalin Mehta, learned Senior Advocate states on instructions that there are total 716 units and that the respondent No.1 Bank may issue 'two step NOCs' for execution of lease deeds of units in favour of allottees as against the payment under the OTS of Rs.9,39,90,879/ and any further payments that may be made by the petitioner, on pro rate basis, with a direction to the petitioner to deposit all the premia/revenue received pursuant to execution of such lease in said Escrow Account No.61167964370 with the respondent No.1 Bank.
3. The respondent No.1 Bank has filed affidavitin-
reply mainly contending that the proceedings being Original Application No.1000 of 2018 instituted by the Bank in DRT are pending adjudication and the matter is likely to be heard finally.
4. Mr. Shalin Mehta, learned Senior Advocate has stated that since DRT is not functioning in view of the Covid19 pandemic, it may not be possible for adjudication of the matter. He has further stated that the Bank may consider the request made by the petitioner as stated earlier by way of an undertaking since the proceedings before the DRT are not likely to be conducted.
5. It is open for the respondent No.1 Bank to consider the submission made by Mr. Shalin Mehta, learned Senior Advocate for the petitioner before the next date.
6. Let the matter be posted on 31.5.2021."
Page 3 of 6 Downloaded on : Wed Jun 02 20:13:13 IST 2021C/SCA/7243/2021 ORDER DATED: 31/05/2021
6. The controversy in short is that the petitioner and the respondent no. 2 Corporation entered into a concession agreement dated 26.08.2010. Under the agreement, the petitioner has been given the right to develop, design, finance, construct, operate and maintain bus terminal facility at Vadodara and build and lease units under the commercial facility agreement. The case of the petitioner is that pursuant to the agreement, the petitioner has completed developing 716 units in the building. The return of such investment predominantly takes place from the 'premia' that is received by the petitioner pursuant to the lease deed agreement of 90 years of such units.
7. It appears that in order to finance its construction, the petitioner obtained loan facilities from the respondent Bank. An OTS was entered into and as a result of an interim order passed by the Debt Recovery Tribunal in OA No. 1000 of 2018 on 26.07.2018, the Corporation which is a party to the concession agreement has not been able to execute the lease deeds for letting out these commercial facilities to the 716 units with the lessees. The case of the petitioner is that the moment the respondent Corporation is in a position to execute lease deeds, the amounts that will inure can be deposited in the escrow account mentioned in the order dated 12.05.2021 passed by this Court as per the escrow agreement dated 28.09.2012. The Bank is reluctant to issue 'two step NOCs' for the purposes of enabling the concession agreement parties i.e. the petitioner and the Corporation, to execute the lease deeds as the OTS amount is to be entirely paid looking to the letter of OTS dated 30.11.2020 particularly clause (b)(VIII) mentioned in the order dated 05.05.2021. As referred to in the order passed by this court on 05.05.2021, even the Commercial Court at Ahmedabad in case of Canara Bank permitted/directed the Bank to issue NOC for execution of lease deeds in similar circumstances.
Page 4 of 6 Downloaded on : Wed Jun 02 20:13:13 IST 2021C/SCA/7243/2021 ORDER DATED: 31/05/2021
8. At this stage, Mr. Siddhartha Samal, learned advocate for the respondent Bank would draw the attention of the court to the affidavit-in- reply filed before this Court wherein it is stated that the Bank has clearly stated in the terms and conditions of the letter of the OTS dated 30.11.2020 that it will release its charge on the properties on receipt of the entire OTS amount along with interest, if any.
9. Mr. Hardik Rawal, learned advocate for the respondent Corporation states that there is no privity of contract between the Corporation and the Bank. He further submits that before the Debt Recovery Tribunal when the restraining order was passed, the Corporation was neither a party nor any direction was passed by the Tribunal against the Corporation.
10. Having considered the submissions of the learned advocates for the respective parties, the respondent no. 1 Bank is directed to issue 'two step NOCs' to the petitioner in context of the lease deeds that need to be executed by the parties to the concession agreement i.e. the petitioner and the Corporation. These 'two step NOCs' shall be on a condition that the amounts that are received by the petitioner on execution of these lease deeds shall be deposited in a separate escrow account referred to in the order dated 12.05.2021. The petitioner shall further give an undertaking before this court which shall be filed within a week from today and a copy of which shall be given to the respondent Bank that on the issuance of 'two step NOCs' in context of lease deeds which are required to be executed or are already executed, the Bank shall grant such NOCs on an undertaking being filed that that amounts received by the petitioner shall be deposited in the escrow account with a liberty to the bank to appropriate the same towards the OTS. It is clarified that this arrangement shall be subject to the outcome of the proceedings that are Page 5 of 6 Downloaded on : Wed Jun 02 20:13:13 IST 2021 C/SCA/7243/2021 ORDER DATED: 31/05/2021 pending before the Debt Recovery Tribunal.
10. With the above directions and observations, petition is disposed of.
(BIREN VAISHNAV, J) DIVYA / SUYASH Page 6 of 6 Downloaded on : Wed Jun 02 20:13:13 IST 2021