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IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
R. SUBHASH REDDY & A. SHANKAR NARAYANA, JJ.
State Bank of India - Appellant
Versus
The Debts Recovery Appellate Tribunal, rep. by its Registrar & Others – Respondent
W.P. No. 10352 of 2015
Decided on : 07-10-2015
Constitution of India - Article 226(2) – Section 19(12) - (13) or (18) – “Metal Gold Scheme” - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Section 19 – Loan - Writ petition is filed by State Bank of India, Main Branch, Hyderabad, seeking Writ of quash the order, and the order passed by the 1st respondent-Debts Recovery Appellate Tribunal, Kolkata, in Appeal by declaring the same as illegal, and consequently allow Application Respondent No.3 is a Company and respondents 4 to 6 are its Directors and guarantors. They have committed default in repaying the debt due to the petitioner-Bank for the loan facilities granted under “Metal Gold Scheme petitioner-Bank has filed before the 2nd respondent-Tribunal for recovery of a sum of Rs.18,06,07,335-44 together with future interest petitioner-Bank has also filed another for recovery of a sum of Rs.7,82,39,368/- due under “Metal Gold Scheme” from another Company, namely of respondents 4 to 6. Along with the said petitioner-Bank has also moved interlocutory applications in praying for attachment of the gold and of respondent-Companies and also for appointment of Advocate-Commissioner to seize and sell the same for realization of the debt due to the petitioner-bank –Held, Appellate Tribunal, in the order though has recorded a finding that respondent No.4 being the Managing Director of the 3rd respondent-Company, is wholly responsible for civil contempt and not others, curiously, it has disposed of the petition by merely ordering to pay a sum of Rs.10Lakhs in favour of the petitioner-Bank. From a perusal of the provision under Section 19(17) of the Act, it is clear that there is no such power conferred on the Tribunal to close the breach by imposing such penalty only. In the event of any finding by the Primary or the Appellate Tribunal that there is violation of the orders passed under Section 19(12), (13) or (18) of the Act, or breach of any of the terms of the order passed by the Tribunal only option left to such Tribunal is either to order for attachment of the properties of the person guilty of such disobedience or breach and to order such person to be detained in civil prison for a term not exceeding three months. While exercising statutory power under Section 19(17) of the Act, it is not open for the Tribunals to pass any other order by traversing beyond the scope of the provision itself order of the Appellate Tribunal, extent of closing the breach by imposing penalty of Rs.10Lakhs, is liable to be set aside. Consequently recording of memo is also fit to be set aside amount of Rs.10Lakhs deposited by the respondents pursuant to the order, is received by the petitioner-Bank without prejudice to their rights, it cannot be said that merely because they have accepted such amount, they cannot pursue the matter further – Writ petition is allowed.
R. Subhash Reddy
1. This writ petition is filed by State Bank of India, Main Branch, Hyderabad, seeking Writ of Certiorary, to quash the order, dated 18.02.2015 (wrongly mentioned as 11.03.2015 in the prayer portion) and the order, dated 11.03.2015 (wrongly mentioned as 15.03.2015 in the prayer portion), passed by the 1st respondent-Debts Recovery Appellate Tribunal, Kolkata, in Appeal No.177 of 2013, by declaring the same as illegal, and consequently allow Application No.311 of 2013 (Old I.A.No.935 of 2012).
2. Respondent No.3 is a Company and respondents 4 to 6 are its Directors and guarantors. They have committed default in repaying the debt due to the petitioner-Bank for the loan facilities granted under “Metal Gold Scheme”. The petitioner-Bank has filed O.A.No.556 of 2011 before the 2nd respondent-Tribunal on 14.11.2011 for recovery of a sum of Rs.18,06,07,335-44 p.s. together with future interest. The petitioner-Bank has also filed another O.A. in O.A.No.490 of 2011 for recovery of a sum of Rs.7,82,39,368/- due under the “Metal Gold Scheme” from another Company, namely, M/s.MBS Impex Pvt. Ltd. of respondents 4 to 6. Along with the said O.As., the petitioner-Bank has also moved interlocutory applications in I.A.Nos.916 to 919 of 2011, 1029 and 1071 of 2011 in O.A.No.556 of 2011 and I.A.No.1004 of 2011 in O.A.No.490 of 2011 etc., praying for attachment of the gold and jewelry of respondent-Companies and also for appointment of Advocate-Commissioner to seize and sell the same for realization of the debt due to the petitioner-bank.
3. As the 3rd respondent-Company did not furnish security for the application claim amount in terms of the order, dated 20.01.2012, the 2nd respondent-Tribunal has passed orders after hearing the parties on 29.06.2012 in I.A.No.1004 of 2011 in O.A.No.490 of 2011 and in I.A.No.916 of 2011 in O.A.No.556 of 2011, appointing Advocate-Commissioner Sri P.S.N.Ravindra to take necessary inventory of movables and gold articles available with the 3rd respondent-Company, along with the approved valuer, and seize the articles to the tune of Rs.37 Crores to be kept in his custody. Against the said order, dated 29.06.2012, passed by the 2nd respondent-Tribunal, the 3rd respondent-Company and its sister-Company M/s.MBS Impex Pvt. Ltd., have carried the matter by way of appeals in M.A.Nos.74 and 75 of 2012 before the Debts Recovery Appellate Tribunal at Chennai. In the said appeals, they moved interlocutory applications seeking stay of the orders passed by the 2nd respondent-Tribunal in I.A.Nos.916 and 1004 of 2011. It appears, during the course of hearing of those applications, there was an offer by the learned counsel appearing for the 3rd respondent and the other Company M/s.MBS Impex Pvt. Ltd., to deposit an amount of Rs.13 Crores by 31.08.2012 and a further amount of Rs.13 Crores by 15.10.2012 and sought to set aside the order appointing Advocate-Commissioner. Based on such offer to deposit a total sum of Rs.26 Crores in two spells, the 1st respondent-Appellate Tribunal has passed orders on 19.07.2012, which reads as under :
“M.A.74/2012. MBS Jewellers Pvt. Ltd. V/S. SBI & Ors. R2 to R4 are given up. Notice given to R1. Ld. Senior Counsel Shri Seshadri appearing on behalf of the Ld. Counsel Shri Girish of Chennai and M/s.Sangi Associates, Hyderabad stated that the appellant is only interested in settling the matter amicably with the bank and that to prove its bonafide the appellant will deposit a sum of Rs.13.00 crores in the form a single or multiple Fixed Deposits with the respondent bank on or before 31.8.2012 and that the appellant will file an affidavit through its officer stating what has been stated with respect to the making of fixed deposits by tomorrow i.e. 20.7.2012. Ld. Senior Counsel further stated that the appellant will also file an affidavit by tomorrow to the effect that the appellant will deposit a further sum of Rs.13.00 crores in the form of a single or multiple fixed deposits with th
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