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2015 DIGILAW 381 (GUJ)

Axis Bank Ltd. v. SBS Organics Pvt. Ltd.

2015-04-01

A.G.URAIZEE, K.S.JHAVERI

body2015
JUDGMENT : K.S. Jhaveri, J. This Letters Patent Appeal has been preferred against the order dated 05.03.2015 (Since reported in – SBS Organics P. Ltd. v. Axis Bank Ltd. (2016) 196 Comp cas 229 (Guj)) passed by the learned single Judge in the captioned writ petition. 2. Ms. Nalini Lodha learned counsel for the appellant submitted that the learned single Judge failed to appreciate the fact that Securitization Application No.152/2010 filed by respondent no.1 before the Debts Recovery Tribunal-II, Ahmedabad (DRT) was partially allowed and the Notice under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "the Act') was held to be valid by the DRT. It was submitted that the appellant had already filed Original Application No.90/2011 before the DRT under section 19 of the Recovery of Debts by Banks and Financial Institution Act, 1993 for recovery of huge amount with interest. However, the learned single Judge failed to appreciate the matter in its proper perspective. Hence, the same deserves to be quashed and set aside. 3. While entertaining the writ petition, the learned single Judge in Paras 8 – 10 observed as under; "8. The submission made by learned Senior Counsel Shri S.N.Soparkar that the huge amount is outstanding and therefore it may not be refunded, is misconceived. The Bank may have appropriate recourse in accordance with law including the Securitisation Act. 9. The submission made by learned Senior Counsel Shri S.N. Soparkar with regard to the scope of judicial review under Article 226 has not impressed inasmuch as the court cannot permit the abuse of the statutory power. In the facts of the case, the amount which has been deposited for availing the statutory remedy as a precondition has to be refunded and the same cannot be permitted to be claimed by the Respondent Bank. It may have its own recourse in accordance with law including the statutory provisions of the Securitization Act. Therefore, for recovery, they can take the necessary steps as may be advised in accordance with law., but the amount which is deposited is lying with the institution like DRT holding it in a trust and cannot be permitted to be recovered straightway by the Respondent Bank making claim over such an amount which is deposited by the litigant to avail the statutory remedy. Therefore, the discretionary jurisdiction under Article 226 has to be exercised to prevent any miscarriage of justice or abuse of power by the Respondent Bank. 10. Therefore, considering the statutory provision of Section 18 of the Securitisation Act and the judgment of the Hon'ble Division Bench of the High Court of Gujarat in case of Babu Ganesh Singh Deepnarayan v. Union of India, AIR 2009 Guj 98 , it is evident that if the amount is deposited as a pre-condition for availing the statutory remedy of appeal and the appeal is disposed of, the same has to be refunded as the institution would hold it as in the trust and therefore it cannot be a matter for claim by the Bank. Therefore the order passed by the DRAT, Mumbai making the withdrawal of the amount or refund of the amount conditional that it is subject to disposal of the appeal that may be filed by the Bank cannot be sustained and the impugned order deserves to be quashed and set aside and is hereby quashed and set aside. The amount of Rs. 50,00,000/- (Rupees Fifty lacs) deposited by the petitioner before the DRAT, Mumbai is permitted to be withdrawn forthwith. Rule is made absolute. No order as to costs." 4. We are in complete agreement with the reasonings given by the learned single Judge in the impugned order since the appeal was withdrawn and the deposit was put as a precondition. In view of the same, we find no merits in the appeal and is, accordingly, rejected.