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SUPREME COURT OF INDIA
Uday Umesh Lalit, Vineet Saran, JJ.
M/s Kut Energy Pvt. Ltd. & Ors. – Appellants
VERSUS
The Authorized Officer, Punjab National Bank, Large Corporate Branch, Ludhiana & Ors. – Respondents
Civil Appeal Nos. 6016-6017 of 2019
Decided on : 20-08-2019
Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 – Section 13(2) – Recovery of debt – One Time Settlement – Secured creditor’ would be entitled to proceed only against secured assets mentioned in notice under Section 13(2) of SARFAESI Act – In present case deposit of Rs.40 crores in terms of order of High Court was only to show bona fides of appellants when a revised offer was made by them – Deposit was not towards satisfaction of debt in question and that is precisely why High Court had directed that deposit would be treated to be deposit in Registry of High Court – Appellants are entitled to withdraw sum deposited by them in terms of said order of High Court – Their entitlement having been established, claim of appellants cannot be negated by any direction that money may continue to be in deposit with Bank – Impugned judgment and order passed by High Court set aside. (Paras 11 and 12)
Facts of the Case:
Loan account of the appellant was declared NPA1 by Bank. A demand notice was thereafter issued by the Bank under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 on 15.03.2017. Amount due to the Bank as on 14.03.2017 was stated to be Rs.106,07,91,644.26/-.
Findings of Court:
Deposit of Rs. 40 crores in terms of order of High Court on 11.10.2017 was only to show the bona fides of appellants when a revised offer was made by them. Deposit was not towards satisfaction of the debt in question and that is precisely why High Court had directed that the deposit would be treated to be a deposit in Registry of High Court.
Result : Appeals allowed.
JUDGMENT
Uday Umesh Lalit. J.
These appeals arise out of the judgment and order dated 19.03.2019 passed by the High Court of Himachal Pradesh at Shimla in CMP Nos.4761 and 5386 of 2018 in CWP No. 2274 of 2017.
2. An agreement was entered into between the appellants and the Government of Himachal Pradesh on 26.05.2008 for setting up 24 MW "Kut Hydro Electric Project" in District Shimla. For commissioning said Project, the appellants availed loan from the consortium of Punjab National Bank ('the Bank', for short), Corporation Bank and Central Bank of India. On 29.09.2015 the account of the appellant was declared NPA [Non-Performing Asset] by the Bank. A demand notice was thereafter issued by the Bank under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ("SARFAESI Act", for short) on 15.03.2017. The amount due to the Bank as on 14.03.2017 was stated to be Rs.106,07,91,644.26/-.
3. Soon thereafter, three proposals were made by the appellants in quick succession on 27.06.2017, 01.08.2017 and 19.08.2017 offering Rs. 84, 87 and 90 crores respectively for One Time Settlement ("OTS", for short). On 22.08.2017 a possession notice under Section 13(4) of the SARFAESI Act was issued by the Bank in respect of the Project in question. On 29.08.2017 a sale notice was issued in terms of which the concerned properties were to be sold by e-auction on 06.10.2017 with a reserve price of Rs. 120 crores.
4. Immediately an application seeking interim relief being SA No.481 of 2017 was moved by the appellants before the Tribunal [Debt Recovery Tribunal-(1), Chandigarh], which prayer was rejected by the Tribunal by its order dated 06.10.2017. On 06.10.2017 itself, the e-auction was conducted by the Bank in which a bid was received from 2nd respondent for Rs. 120,00,11,000/-. This prompted the appellants to revise the OTS proposal to Rs.140 crores. Such offer was made on 07.10.2017 and was followed by filing of CWP No.2274 of 2017 before the High Court on 10.10.2017 challenging (i) The notices dated 15.03.2017 and 22.08.2017 (ii) Sale Notice dated 29.03.2017 and (iii) Order dated 06.10.2017 passed by the Tribunal refusing to grant interim relief.
5. The matter came up for preliminary hearing before the High Court on 11.10.2017 and the Counsel for the appellants submitted that in order to establish their bona fides, the appellants were willing and ready to deposit a sum of Rs. 140 crores with the Bank. The submission was recorded and directions were issued by the High Court as under:
"Mr. B.C. Negi, learned Senior Advocate, states that without prejudice to the respective rights and contentions of the parties and subject to the outcome of the writ petition, pursuant to petitioners' request (Annexure P-18), which is pending consideration with the lead Consortium Bank, in order to establish their bona fides, petitioners are ready and willing to deposit a sum of Rs. 140 crores with the lead Consortium Bank (Punjab National Bank) in the following manner:-
(i) Rs. 3 crores already deposited along with communication, dated 7th October, 2017 (Annexure P-18);
(ii) Rs. 15 crores on or before 16th October, 2017;
(iii) Rs. 22 crores on or before 1st November, 2017 and
(iv) Rs. 100 crores on or before 11th December, 2017.
We direct that subject to the petitioners depositing a sum of Rs. 140 crores with the Punjab National Bank, in terms of their statement, no coercive action shall be taken against them, more so when they are still in the actual physical possession of the assets, which fact is not disputed before us. Also, such deposit shall be subject to further orders, which may be passed by the Court. Deposit with the bank shall be treated to be a deposit in the Registry of this Court. Further, bank shall take a decision on the petitioners' request, dated 7th October, 2017 (Annexure P-18), which Mr. Ajay Kumar, learned Senior Advocate, states shall be taken within a period of four weeks from today. We
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