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2009 DIGILAW 767 (JHR)

Punjab & Sind Bank v. Stan Commodities Pvt. Ltd.

2009-05-14

D.K.SINHA, GYAN SUDHA MISRA

body2009
Order This appeal is admitted and be listed for hearing on 19.5.2009. 2. In the meantime, the direction of the learned Single Judge at paragraph no. 52 in the impugned judgment and order, quashing and setting aside the action of the appellant-Bank and restraining it from proceeding on the basis of the notice dated 29.11.2004 and reverting back to the provision of the Securitisation and .Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 shall remain stayed. 3. Consequently, the appellant-Bank shall be at liberty to proceed against the respondent under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in view of the ratio of the decision of the Supreme Court delivered in the case of Transcore vs. Union of India & Anr. reported in (2008)1 SCC 125 , wherein it has clearly been held that the proceeding under the D.R.T Act is not a precondition for taking recourse to the NPA Act and it is for the Bank/Financial Institution to exercise its discretion as to cases in which it may apply for leave and in cases where they may not apply for leave to withdraw. It has further been held therein that the circumstances need not be spelt out since Section 19(1), first proviso of the aforesaid Act, is an enabling provision, which provision may deal with myriad circumstances. 4. In so far as the instant matter is concerned, the circumstances indicate that the respondent has already availed and used a sum of Rs. 55 lacs which was advanced by the appellant-Bank to the respondent by way of grant of cash-credit facility. The said amount admittedly has been availed by the respondent and by way of repayment, a meagre amount of As. 7 lacs only has been paid to the Bank, which is denied by the counsel for the respondent. However, we do not wish to express any opinion on this dispute as the same will have to be adjudicated and determined before the D.R.T. 5. In order to simplify the matter, we deem it just and appropriate to grant liberty to the appellant-Bank to proceed against the respondent under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in so far as the principal amount of Rs. In order to simplify the matter, we deem it just and appropriate to grant liberty to the appellant-Bank to proceed against the respondent under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in so far as the principal amount of Rs. 55 lacs is concerned, which, however, shall be subject to the final determination to be made by the D.R.T. where the appellant-Bank has filed an application for recovery of the debt of Rs.71 lacs. 6. It goes without saying that the D.R.T. shall finally determine as to how much amount has been paid by the respondent to the Bank and whether the said amount is to be adjusted towards principal amount or towards interest paid as per the terms and conditions of the agreements is due to be adjudicated finally. 7. We, therefore, reiterate that the action proposed to be taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, shall be subject to the result of the D.R.T. proceedings bearing no. O.A. No. 47/2006. 8. In view of our above direction, it is clear that the direction of the learned Single Judge quashing and setting aside the action of the appellant-Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest. Act, 2002, shall remained stayed, till further orders. 9. After the aforesaid order was passed, counsel for the respondent made a fervent appeal to the Court that the respondent may be granted liberty to negotiate with the Bank and enter into a settlement. 10. We see no reason not to accept his request as it cannot be the intention of anyone including the appellant-Bank to put a closure of the respondent's industry. Therefore, we grant liberty to the respondent to approach the Bank offering the terms of settlement. But this liberty shall not be allowed to be construed as a device to forestall the aforesaid direction issued by this Court granting liberty to the appellant Bank to proceed against the respondent for realization of the amount of Rs. 55 lacs, which was advanced by way of cash credit facility and the admitted amount towards principal debt.