2012 (5) TMI 765 - HC - Companies Law

Court upholds de-paneling of Public Limited Company as Enforcement Agent due to intemperate language.

The Court dismissed the writ petition challenging the de-paneling of a Public Limited Company as an Enforcement Agent by the State Bank of India. The ... - Issues involved:Challenge to the impugned order de-paneling the petitioner without payment of outstanding dues and without affording any opportunity of hearing.Details of the judgment:1. The petitioner, a Public Limited Company, was appointed as an Enforcement Agent by the respondent-State Bank of India after responding to a public advertisement. The petitioner alleged that despite taking physical possession of secured assets under the SARFAESI Act, the Bank delayed payments and ultimately de-paneled the petitioner without notice or hearing.2. The petitioner contended that the de-paneling was in violation of principles of natural justice as no hearing was provided before the action. Citing relevant judgments, the petitioner challenged the de-paneling decision.3. The respondent-Bank opposed the petitioner's claim, referring to correspondence where the petitioner used intemperate language against the Bank officials. The respondent argued that empanelment did not confer a legal right, and the petitioner's actions did not entitle them to relief.4. After considering the submissions, the Court found no merit in the writ petition. The petitioner's use of intemperate language in communications with the Bank, coupled with the absence of a legal right for continuation as an approved agent, supported the de-paneling decision.5. The Court noted that the judgments cited by the petitioner did not apply to the de-panelment situation. Absence of prior notice before de-paneling was not deemed unlawful in this case.6. The writ petition was dismissed, with the observation that the petitioner could seek recovery of outstanding dues through legal recourse if necessary.