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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
VIPUL M. PANCHOLI, J.
ANANTKOTI FABRICS A PARTNERSHIP FIRM THROUGH ITS PARTNER ARUN KHANNA - Appellant
Versus
BANK OF BARODA - Respondent
SPECIAL CIVIL APPLICATION NO. 14522 of 2020
With
SPECIAL CIVIL APPLICATION NO. 14525 of 2020
Decided On : 26-02-2021
Contract Act – Section 171,128 - Constitution of India,1950 – Articles 226,19(1)(g),12 - Partnership firm constituted under the provision of the Indian Partnership Act. The partnership was executed on 14.05.2014. At the relevant point of time, there were three partners viz., (1) Shri Sajjan Gupta; (2) Shri Kanwaldeep R. Tanwar; and (3) Shri Pradeep Dhingra. It is further stated that the respondent – bank sanctioned credit facilities like Term Loan and Cash Credit in favour of the petitioner – firm, which was renewed from time to time. The petitioner is also maintaining current account with the respondent – bank. - It is stated that the said Company had signed certain deeds of guarantee, hypothecation etc. and the said Pradeep Dhingra stood as guarantor and gave personal guarantee and also mortgaged his personal movable and immovable properties with the respondent – bank for the loan transaction of the said Company i.e. SCPL. It is the specific case of the petitioner that the petitioner – firm has nothing to do with SCPL and the petitioner has never stood as guarantor or signed any document or connected with any loan, cash credit or other account of SCPL – whether the Maliahs having been granted by the ex-Zamindars by virtue of the office they held under sanads and whether the grant was intended to serve as remuneration for services rendered by them by virtue of the said office - whether the Bank can retain a property belonging to a partner to satisfy the general account of his firm
Finding of the court: Article 226 states that the High Court shall have power to issue to any person or authority, including in appropriate cases any Government, directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari. All these writs are known in English law as prerogative writs, the reason being that they are specially associated with the King's name. These writs were always granted for the protection of public interest and primarily by the Court of the King's Bench. As a matter of history the Court of the King's Bench was held to be coram rege ipso and was required to perform quasigovernmental functions. The theory of the English law is that the King himself superintends the due course of justice through his own Court preventing cases of usurpation of Jurisdiction and insisting on vindication of public rights and protecting the liberty of the subjects by speedy and summary interposition - It was contended that even on the assumption that the right of the British Government under the lease of 1907 had devolved on the State of Assam the latter could only enforce its rights under the contract of lease and had no power to forcibly turn out the appellant from the property by mere executive action. It was stressed on behalf of the appellant that the Executive authorities can only act in pursuance of the power given to them by law and cannot interfere with the liberty or property of the subject except on condition that they can support the legality of their action before a court of law. It cannot be urged, therefore, that the appellant was merely attempting to enforce a contractual right by taking recourse to the machinery provided by Art. 226 of the Constitution
Result: Civil Application stands allowed
JUDGMENT :
1. Rule. Learned advocate, Mr. Bhaskar Sharma waives service of notice of Rule for respondent – bank.
2. In both these petitions, the issue involved is similar and, therefore, learned advocates appearing for the parties have jointly requested that both these petitions be heard together and be disposed of at an admission stage and, hence, both these petitions are disposed of by this common judgment.
3. Both these petitions are filed under Article 226 of the Constitution of India, in which, the petitioners have prayed that the direction be given to the respondent – bank to defreeze the current account and cash credit account of the concerned petitioner firm and issue “No Objection Certificate” in pursuance to the concerned term loan account as well as cash credit account of the concerned petitioner – firm and to return all the documents of the properties of the concerned petitioner.
4. Heard learned advocate, Mr. H.S. Tolia for the petitioner and learned advocate, Mr. Bhaskar Sharma appearing for the respondent – bank.
5. For the sake of convenience, the facts of Special Civil Application No.14525/2020 are considered, which are as under,
5.2 It is stated that one of the partners of the petitioner – firm viz., Pradeep Dhingra was also Director in another firm viz., M/s. Sidhant Creations Pvt. Ltd. (“SCPL” for short), which is incorporated under the provision of the Companies Act w.e.f. 07.10.2008. It is stated that the said Company was also enjoying several credit facilities from the respondent – bank. It is stated that the said Company had signed certain deeds of guarantee, hypothecation etc. and the said Pradeep Dhingra stood as guarantor and gave personal guarantee and also mortgaged his personal movable and immovable properties with the respondent – bank for the loan transaction of the said Company i.e. SCPL. It is the specific case of the petitioner that the petitioner – firm has nothing to do with SCPL and the petitioner has never stood as guarantor or signed any document or connected with any loan, cash credit or other account of SCPL.
5.3 It is stated that the account of SCPL was declared as NPA and the respondent – bank has initiated recovery proceeding against the Company and its Director/ Guarantor. The petitioner has narrated various facts including the correspondences which took place with the respondent – bank in the memo of petition. Thereafter, it is stated that the said Pradeep Dhingra resigned from the petitioner – partnership firm and new partnership deed was executed on 30.10.2019, wherein the said Pradeep Dhingra retired and one Smt. Amita Khanna is inducted as new partner in the petitioner – firm. It is stated that all the loan accounts, CC accounts and current accounts of the petitioner – firm and SCPL are completely different and having no connection with each other.
5.4 It is stated that the respondent – bank issued letter/email dated 04/05.02.2020 demanding share of retiring partner of the petitioner-firm. The petitioner has provided details in June, 2020 to the respondent – bank. It is further stated that during the period between 23.06.2020 to 30.07.2020, various emails were exchanged between the petitioner – firm and the respondent – bank regarding the demand to execute certain documents, asking for details related to partnership firm, demanding CA certified account GST Returns etc. and all such necessary details were supplied as per the
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