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2012 DIGILAW 1393 (MAD)

Petitioner v. Respondent

2012-03-16

A.ARUMUGHASWAMY

body2012
Judgment : A. ARUMUGHASWAMY, J. 1. The Company Application is filed by the applicant to issue suitable direction to the 7th respondent Canara Bank to accept the payment of Rs.32,72,000/- as one time settlement. 2. In the affidavit filed in support of the application, it is averred that the applicant is a shareholder in M/s.Jayalakshmi Mills (P) Limited holding 1104 shares out of the total 7000 equity shares which was wound up by the orders of this Court dated 24.8.1991 and during April, 2004, the Official Liquidator, the 1st respondent herein brought the immovable property of the said mill for public auction. At that time, the applicant filed a C.A.No.564/2004 and obtained an order of interim stay of the said auction and also directed the Directors to pay a substantial amount to the credit of the above C.P. It is further averred that the 7th respondent herein had extended certain credit facilities to the Mill and Rs.32,72,000/- is outstanding during the year 1991 and the O.A. Filed by the bank in this regard has been transferred to the Debts Recovery Tribunal, Coimbatore and numbered as T.A.1096/2002. Since the Reserve Bank of India has issued a Circular dated 3.9.2005 to all the Public Sector Banks regarding One time Settlement Scheme, the applicant is before this Court with this application. 3. In the counter filed by the 7th respondent, it has been stated that the loan was sanctioned initially for Rs.5 Lakhs and subsequently, the same was enhanced in the year 1996 and the total fund under all categories enjoyed by the company under liquidation were to the tune of Rs.71.15 Lakhs. It is further averred that since the company under liquidation failed to make the payment, the respondent bank has filed T.A.No.1092/2002 before the Debts Recovery Tribunal, Coimbatore for realizing the dues and the same is pending disposal and total 7.95 acres together with the factory building constructed thereon has been pledged along with 8545 Equity shares of M/s.Madras Aluminium Company and 160 Equity Shares of South India Viscose Limited and subsequently, the same was transferred in the name of the respondent bank. The company has been wound up as per the orders of this Court. It is further averred that the shares have been sold for Rs.2.23 Crores and after giving credit to the sale proceeds, a sum of Rs.7,20,53,651.56 is due as on 31.12.2005. The company has been wound up as per the orders of this Court. It is further averred that the shares have been sold for Rs.2.23 Crores and after giving credit to the sale proceeds, a sum of Rs.7,20,53,651.56 is due as on 31.12.2005. Therefore, the application has to be dismissed. 4. The Point for consideration is:- Whether the Applicant has to pay any amount to the respondent bank; if so, how much amount he has to pay? 5. Learned Senior Counsel appearing for the applicant submitted that even though the petitioner has filed the present petition for accepting the payment of Rs.32,72,000/-, after filing of this application only, they came to know that the shares have been sold against the orders passed by the Division Bench of this Court. The learned Senior Counsel further submitted that even though one time settlement has been agreed between the parties on 25.11.2003 for Rs.180 Lakhs and towards token of the settlement, the petitioner also has paid Rs.60 Lakhs to the respondent bank. Even after six months, the bank has not agreed to release the documents and they returned the amount. Hence he prayed that the bank may be directed to pay the excess amount collected by them by way of selling the shares of the applicant. 6. Learned Senior Counsel for the 3rd respondent submits that since they were under the impression that selling of shares is no way connected with the proceedings of winding up, they sold the shares. Therefore, the present application has to be dismissed. 7. Heard both sides and also perused the materials available on record. 8. From the perusal of the records it is seen that the present applicant has committed default in payment of a sum of Rs.88,51,992.26 on 1.1.1993 and thereafter since it was not paid in time, the Canara Bank filed O.A.No.937 of 1999 before the Debt Recovery Tribunal at Chennai on 11.1.1993 for recovery of the said amount with interest at the rate of 24.75% per annum till the date of realisation. The O.A. has been transferred to the Debt Recovery Tribunal Coimbatore and renumbered as T.A.No.1092 of 2002. Thereafter, the principal amount arrived as Rs.1,03,49,741/-, interest was calculated for the said principal amount at the rate of 9% till 26.03.2006 which comes to Rs.95,85,040.50, the loan amount aggregates to Rs.1,99,34,781.50. The O.A. has been transferred to the Debt Recovery Tribunal Coimbatore and renumbered as T.A.No.1092 of 2002. Thereafter, the principal amount arrived as Rs.1,03,49,741/-, interest was calculated for the said principal amount at the rate of 9% till 26.03.2006 which comes to Rs.95,85,040.50, the loan amount aggregates to Rs.1,99,34,781.50. Thereafter, the present applicant has given a letter to the bank on 25.11.2003 proposing One Time Settlement. On that letter One Time Settlement was accepted by the bank on 01.12.2003 for a sum of Rs.1,80,00,000/-and the applicant has also given his consent letter to that effect. Thereafter, it appears that the applicant has made payment of Rs.60.00 lakhs and requested time to make the balance amount. It appears that after six months the bank has returned Rs.60.00 lakhs to the applicant. In the meanwhile, the respondent bank has filed an application before this Court in C.A.No.2181 of 1992 to grant leave to sell 8548 shares in the Madras Aluminium Company Limited and 160 shares in South India Viscose Limited and to appropriate the sale proceeds towards the debt due to the Applicant from the Company and further grant leave to file a suit against the company for recovering the balance amount due. This Court by the order dated 1.8.1995, passed an order dismissing the said application. The operative portion of the said order runs as hereunder:- "In that view, I am of the opinion that the prayer by the applicant to grant leave to sell the shares cannot be complied with, and the application is liable to be dismissed." Aggrieved by the said order, the present respondent bank has filed appeal in OSA No.77 of 1996 before the Division Bench of this Court. The Division Bench of this Court by order dated 13.11.2002 has dismissed the said appeal. The relevant portion of the said order is extracted hereunder:- "4. Admittedly, in Company Application No.1162 of 1999 in the said Company Petition, the learned Judge, by order datd 6.3.2002, directed the Official Liquidator to take steps for the sale of both movable and immovable properties of the first respondent company and further, the Official Liquidator was permitted to approach this court after obtaining valuation from Canara Bank for stipulating the terms and conditions of the sale of properties. The learned Judge further held that if the Canara Bank i.e. the appellant herein is the secured creditor, their interest as a secured creditor will be protected in the sale by the Official Liquidator. 5. When the learned Judge directed the Official Liquidator to sell both the movable and immovable properties and held that interests of the appellant herein is to be taken care of by the Official Liauidator in such a sale, in our considered view, nothing survives in this appeal. 6. Accordingly, the Original Side Appeal is dismissed. No costs. Consequently, CMP No.4868 of 1996 is also dismissed and CMP No.6221 of 1996 is closed." No appeal has been filed by the bank by way of SLP before the Hon'ble Apex Court. Therefore, as per the said order, the respondent bank has been prevented from selling the shares to any third parties. But whereas from the counter filed by the respondent bank it is seen that the shares have been sold to the third parties for a consideration of Rs.2.23 Crores. The date of sale and the amount and the name of the parties has not been described before this Court. 9. Now, the contention of the learned Senior Counsel appearing for the applicant is that as per the OTS the respondent bank agreed to receive 1.80 lakhs, whereas they sold the shares of the applicant company for Rs.2.23 Crores. Therefore, excess amount is with the respondent bank. Further, they realized the dividend also to the tune of Rs. 35,19,646/-. Hence, the respondent bank has also committed contempt hence, suitable orders also has to be passed and the present application has to be allowed directing the respondent bank to return all the documents of title deeds as well as the other relevant records. 10. The learned Senior Counsel appearing for the respondent agreed that as per the OTS even though the respondent bank has agreed to receive Rs.1.80 lakhs, since they have not complied with the terms of OTS they are entitled to recover the entire amount. Hence, he prays that the application has to be dismissed. 11. 10. The learned Senior Counsel appearing for the respondent agreed that as per the OTS even though the respondent bank has agreed to receive Rs.1.80 lakhs, since they have not complied with the terms of OTS they are entitled to recover the entire amount. Hence, he prays that the application has to be dismissed. 11. From the perusal of the records, it is seen that as rightly contended by the learned senior counsel for the applicant even though the respondent bank has been prevented from selling the shares of the applicant company, in spite of the specific direction given by the Division Bench of this Court, the respondent bank has purposefully floated that order, sold the shares of the applicant company and derived the amount of Rs.2.23 Crores even for which they have not furnished any details or relevant documents regarding the said sale of shares before this Court. The respondent bank has first time mentioned before this Court about the sale of shares of the applicant company for Rs.2.23 Crores to the third parties. Of course, they have also derived the amount out of the dividend also for a sum of Rs.35,19,646/-. If it is taken into consideration, totally a sum of Rs.2,258,76,834/- has been received by the respondent for the agreed amount of Rs.1.80 lakhs by way of OTS. Even if 9% interest is calculated, the amount is on the higher side and the respondent bank alone is to repay the excess amount to the applicant. It is pertinent to note that the Government has borrowed the amount to run the Textile Unit and the Government has given collateral security for the said amount. From the perusal of the records it appears that the applicant has settled the workers' claim also not in dispute. Any how, the respondent bank has purposefully committed willful disobedience of the orders and they sold the shares of the applicant company for Rs.2.23 crores even though the date of the sale and the details of those amount has not been furnished before this Court, the total amount alone has been mentioned as 2.23 corores, it amounts to willful disobedience of the orders of this Court. 12. 12. In such circumstances, I am of the view that the applicant is directed to make the payment of Rs.2 Lakhs as full quit to the 7th respondent within two weeks from the date of receipt of a copy of this Order, in turn, the 7th respondent is directed to return those original documents within ten days thereafter. After receipt of the aforesaid amount, the 7th respondent is directed to give suitable instructions to not press the proceedings which is pending before the Debts Recovery Tribunal against the petitioner, if any. Anyhow, in the event of failure of any one of the conditions, the applicant is at liberty to take the contempt proceedings against the 7th respondent for selling of the shares and for appropriate relief. The point is answered accordingly. 13. The application is disposed of with the above observation.