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2015 DIGILAW 415 (CAL)

Reliance Industries Ltd. v. State Bank of India

2015-05-11

ARIJIT BANERJEE

body2015
JUDGMENT : Arijit Banerjee, J. In this revisional application, the petitioner challenges an order dated 18th December, 2013 passed by the Debts Recovery Appellate Tribunal at Kolkata in Application No. 3 of 2013 arising out of Appeal No. 4 of 2013. The appeal has been preferred by the petitioner before the Appellate Tribunal against the judgment and order dated 22nd November, 2012 passed by the Debts Recovery Tribunal (In short DRT). In connection with the appeal, the petitioner filed an application under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (In short RDDBFI Act, 1993) praying for waiver of pre-deposit. The Debts Recovery Appellate Tribunal (In short DRAT) directed the petitioner to deposit 40% of the certificate amount. The petitioner is aggrieved by this as according to the petitioner the pre-deposit should have been totally waived in the facts and circumstances of the case. 2. The petitioner is a supplier of petroleum products. The petitioner appointed the opposite party no.2 as its dealer. 3. A tripartite agreement dated 9th May, 2005 was entered into between the parties hereto. It appears from the agreement that the liability of the petitioner to the opposite party no.1 under the said agreement is limited to Clauses 6 and 10 thereof. 4. The opposite party no.2 obtained credit facilities from the opposite party no.1. Subsequently, the opposite party no.1 instituted proceedings for recovery of the amount lent and advanced under Section 19 of the RDDBFI Act, 1993. The petitioner herein was made a party defendant to such proceeding. 5. After a contested hearing, the DRT by an order dated 22nd November, 2012 found the petitioner as also the opposite party no.2 jointly and severally liable to the opposite party no.1. The certificate amount is Rs.1,41,96,927.88. The petitioner preferred an appeal under Section 20 of the RDDBFI Act, 1993 before the DRAT, Kolkata. The petitioner also applied under Section 21 of the said Act for waiver of the certificate amount. By the impugned order, the DRAT, Kolkata partly allowed such application by directing the petitioner to deposit 40% of the certificate amount. Being aggrieved by not having been granted a total waiver, the petitioner is before this Court by way of filing this revisional application. 6. Mr. By the impugned order, the DRAT, Kolkata partly allowed such application by directing the petitioner to deposit 40% of the certificate amount. Being aggrieved by not having been granted a total waiver, the petitioner is before this Court by way of filing this revisional application. 6. Mr. Mitra, learned Senior Advocate appearing on behalf of the petitioner contends that the petitioner is neither a borrower nor a guarantor vis-à-vis the opposite party no.1. He relied on a judgment and order dated 7th July, 2014 passed by a learned Judge of this Court in C.O.195 of 2014 between the same parties and on identical facts. By the said judgement and order, this Court allowed the revisional application and waived the pre-deposit altogether subject to deposit by the petitioner with the opposite party Bank, the sum held by the petitioner on account of the opposite party no.2. Since the said judgment and order has been passed on identical facts and in a lis essentially between the same parties, rule of precedent requires this Court to follow the said judgment and order. 7. Learned Advocate for the opposite party/Bank, however, submitted that a particular clause in the tripartite agreement being Clause 10(iv) was not brought to the notice of this Court in the earlier matter. Clause 10(iv) of the Tripartite Agreement is to the following effect; ""Upon successful enforcement/foreclosure of the mortgage by Bank, if the Retail Outlet is to be sold in pursuance of the enforcement of mortgage of the Bank over the retail Outlet in favour of the Bank, RIL agrees to purchase the same at the value not less than amount outstanding under the Credit Facilities plus maximum three month interest (excluding overdue interest and penalty), and to pay the said amounts to the Bank." 8. Relying on the aforesaid clause, learned Advocate appearing for the Bank submitted that the petitioner has a co-extensive liability along with the opposite party no.2 to pay the dues of the Bank. I am afraid, I cannot agree with such submission made on behalf of the Bank. The aforesaid clause would have become operative had the retail outlet which is mortgaged to the Bank been sold in pursuance of the enforcement of the mortgaged upon successful enforcement/foreclosure of the mortgage. The said clause cannot and does not, in my opinion, impose any primary or even secondary liability on the petitioner vis-à-vis the Bank. 9. The aforesaid clause would have become operative had the retail outlet which is mortgaged to the Bank been sold in pursuance of the enforcement of the mortgaged upon successful enforcement/foreclosure of the mortgage. The said clause cannot and does not, in my opinion, impose any primary or even secondary liability on the petitioner vis-à-vis the Bank. 9. It is submitted on behalf of the petitioner that it is holding a sum of Rs.23,96,896/- on account of the opposite party nos.2 to 4 who are the borrowers. The petitioner is directed to deposit the said amount with the Registrar, DRAT within 8th June, 2015 without prejudice to its rights and contentions that it is entitled to receive possession of its articles from the retail outlet. Upon such deposit being made, the Registrar will keep such sum in an interesting bearing short-term fixed deposit with any Nationalised Bank other than the opposite party no.1. 10. The order impugned is quashed and set aside. The DRAT, Kolkata shall dispose of the appeal as expeditiously as possible and in any event within a period of eight weeks from the date of communication of this order. The learned Tribunal shall not grant any unnecessary adjournment to any of the parties and shall not be influenced by any observation made in this order. 11. In case, the petitioner fails to deposit the aforesaid amount as indicated above, this application shall stand dismissed. 12. The revisional application, being C.O.197 of 2014, is accordingly disposed of.