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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B. PARDIWALA, VIRESHKUMAR B. MAYANI, JJ.
KKR India Financial Services Limited – Petitioner
Versus
Axis Bank Limited – Respondent
R/Special Civil Application No. 18466, 20405 of 2019
Decided On : 05-03-2020
Constitution of India,1950 - Article 227 - Petition raised in both captioned petitions are same and challenge is also to selfsame order passed by Commercial Small Causes Court those were heard analogously and are being disposed of by this common judgment and order - Sake of convenience - Applicants have prayed for following respondent Axis Bank Limited instituted Commercial Civil Suit Small Causes Court at against respondents respectively - In said civil suit plaintiff Axis Bank has prayed for following reliefs - Pending hearing and disposal of present Suit Defendants their respective servants agents or any other persons claiming through by or under them be restrained by an order and injunction of this Hon'ble Court from in any manner dealing with, disposing off or creating any third party rights or encumbrances or parting with possession of or from alienating shares - Petition suit is filed by plaintiff - Bank against defendants and along with suit also filed injunction application - Advocate of plaintiff has argued before court that defendant approached plaintiff requesting a sanction of credit facility in nature of Sales/Purchase invoices discounting of crores for two times - Then after around after expiry of facility defendant once again approached plaintiff with a request to renew facility - Defendant would route proceeds from said of said Syntax Branch through plaintiff and would be entitled to utilize said sale proceeds for repayment of facility or any renewal facility sanction by plaintiff purpose of this was created to charge said sale proceeds to security repayment of amount that may be sanction renewal facility and outstanding exposure in respect of facility as on date of receipt of funds - Once funds would be received plaintiff can accordingly have outstanding amount as on that date and was also agreed that entire amount facility will be repaid - Held, Court clarify and it goes without saying that any observations touching merits of case are purely for purpose of deciding question whether court below was justified in passing consent order and shall not be construed as an expression of final opinion in main matter - Court below shall decide matter afresh without being influenced in any manner with any of observations of this Court touching merits of case - However at same time court below shall bear in mind principles of law which have been discussed in this judgment - Court stay is lifted on condition that all defendants shall ensure proceeds of sale of shares of French company Syntax NP SAS shall directly be transferred to equivalence - Petitions are disposed (Paras 74 and 75)
Facts of the Case:
Respondent No.1 herein namely the Axis Bank Limited instituted the Commercial Civil Suit No.397 of 2019 in the Small Causes Court at Ahmedabad against the respondents Nos.2, 3 and 4 respectively herein.
Finding of the Court:
Court clarify and it goes without saying that any observations touching merits of case are purely for purpose of deciding question whether court below was justified in passing consent order and shall not be construed as an expression of final opinion in main matter - Court below shall decide matter afresh without being influenced in any manner with any of observations of this Court touching merits of case - However at same time court below shall bear in mind principles of law which have been discussed in this judgment - Court stay is lifted on condition that all defendants shall ensure proceeds of sale of shares of French company Syntax NP SAS shall directly be transferred to equivalence.
Result: Petitions are disposed
JUDGMENT :
J.B.PARDIWALA, J.
1. Since the issues raised in both the captioned petitions are the same and the challenge is also to the selfsame order passed by the Commercial Small Causes Court, Ahmedabad, those were heard analogously and are being disposed of by this common judgment and order.
2. For the sake of convenience, the Special Civil Application No.18466 of 2019 is treated as the lead matter.
3. By this application under Article 227 of the Constitution of India, the applicants (affected third parties) have prayed for the following reliefs:
“28. a) this Hon’ble Court may be pleased to issue an appropriate order or direction setting aside the Impugned Order dated 13 September 2019 passed by the Small Cause Court, Ahmedabad in Exhibit 9 (interim application) in Suit No.379 of 2019;
(b) this Hon’ble Court may be pleased to issue an appropriate order or direction pending the admission, hearing and final disposal of the present Application, this Hon’ble Court be pleased to stay the operation and implementation of the Impugned Order dated 13 September 2019 passed by the Small Cause Court, Ahmedabad in Exhibit 9 (interim application) in Suit No.379 of 2019 and consequential proceedings, arising therefrom, if any, in the interest of justice;
(c) that this Hon’ble Court be pleased to grant ad-interim ex-parte relief in terms of para 28(b) above;
(c1) that this Hon’ble Court be pleased to issue an appropriate order or direction setting aside the Modified Order dated 19 October 2019 passed by the I/c. Chief Judge, Comm. Small Cause Court, Ahmedabad below Exhibit 9 in Comm. Suit No.397/2019;
(c2) that pending the admission, hearing and final disposal of the present Petition, the Hon’ble Court be pleased to stay the Modified Order dated 19 October 2019 passed by the I/c. Chief Judge, Comm. Small Cause Court, Ahmedabad below Exhibit 9 in Comm. Suit No.397/2019;
(c3) that this Hon’ble Court be pleased to grant ad-interim relief in terms of para 28 c2) above;
(d) this Hon’ble Court may be pleased to grant such other and further reliefs, in favour of the Applicants, as deemed fit in the interest of justice and equity.”
4. The facts giving rise to this application may be summarised as under:
4.1 The respondent No.1 herein namely the Axis Bank Limited instituted the Commercial Civil Suit No.397 of 2019 in the Small Causes Court at Ahmedabad against the respondents Nos.2, 3 and 4 respectively herein. In the said civil suit, the plaintiff i.e. the Axis Bank has prayed for the following reliefs:
“a) Declaration that the Axis Bank Undertaking dated 26 February 2019 (Axis Bank Undertaking) is valid, subsisting and binding on Respondent Nos.2 to 4;
(b) Declaration that the entire sale proceeds of the Proposed Sale shall be first used towards repayment of the Axis Bank facility;
(c) Declaration that Respondent No.1 has a first charge over the sale proceeds to the extent of its outstanding exposure under the Axis Bank Facility;
(d) An order of mandatory injunction directing and requiring Respondent Nos.2 to 4, their respective offices, servants and agents, to deposit/route the entire sale proceeds with Respondent No.1, as per the obligation agreed and recorded in the Axis Bank Undertaking dated 26 February 2019, to enable Respondent No.1 to recover its outstanding exposure under the Axis Bank Facility.”
4.2 The plaintiff also preferred an application Exhibit 9 (Interim Application) and prayed for the following reliefs :
“(a) Pending the hearing and disposal of the present Suit, the Defendants, their respective servants, agents or any other persons claiming through by or under them, be restrained by an order and injunction of this Hon’ble Court from in any manner dealing with, disposing off or creating any third party rights or encumbrances or parting with possession of or from alienating the shares of Sintex NP SAS, or any part thereof;
(b) In the alternative to prayer clause (a) and only if this Hon’ble Court is of the view that prayer clause (a) aforesaid injun
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