AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 321
X X X X Extracts X X X X
X X X X Extracts X X X X
....2. The Appellant has sought the followings reliefs: * Admit the Appeal; * Issue Rule Nisi calling upon the Respondents as to which order dated 20.02.2020 passed by the Adjudicating Authority shall not be quashed being illegal, arbitrary and barred by limitation etc. 3. The Adjudicating Authority, while passing the impugned order dated 20.02.2020 has observed the followings: "We have heard both parties. The applications, documents are perused. The Corporate Debtor, has conveyed the property, under 7 nomination agreement along with the builder dated 31.03.2013 to and in favour of M/s. Jupiter Pharmaceuticals Limited, in other words, the Corporate Debtor having availed the loan for purchase of commercial property from the applicant bank without the knowledge of the bank. illegally has enter into an agreement, with the concurrence of the builders and has conveyed the property to Jupiter Pharinaceuticals Limited. As per the Nomination Agreement dated 31 March, 2013, the total saleconsideration is sum of Rs. 2.26.77.250/- (Two Crore Twenty-Six Lakh Seventy-Seven Thousand Two Hundred and Fifty). Hence, the property which ought to have been created as an equit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rate Debtor as the Respondent No.3 i.e. Bengal Sharchi Housing Development Ltd. had agreed through the 'Quadpartite Agreement' (for short 'Agreement') dated 29.06.2011 (appearing at page no. 149 -153 of the Appeal paper book vide clause 7 of the said agreement) to pay the dues of the bank in case of default arising out of any event, sale, transfer of the subject property, which was financed by the R2/Bank. c. The Agreement is between M/s. Emerald Mineral Exim Pvt. Ltd (R1), Bengal Shrachi Housing Development Ltd (R3) and West Bengal Housing Infrastructure Development Corporation Ltd (WBHIDCL). d. The clause so stated in the said Agreement for brevity and clarity are produced herein below: Clause 7 - the Builder assures and confirms that the Said Unit as well as the said building and the appurtenant thereto are not subject to any encumbrance, charge or liability of any kind whatsoever and that the entire property is free and marketable. Clause 8- The Builder also confirms that it has taken necessary permissions/approvals/sanctions for construction of the said building from all the concerned competent authorities and the construction of the building as well as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Borrower and the Builder, till such time the terms and conditions of grant of Loan to the Borrower are complied with. Clause 18- The Borrower shall keep DLB saved, harmless and indemnified against any loss, damages, expenses, claims, actions which the DLB may suffer based on the representations made by the Borrower and Builder, in this Agreement and believing such representations to be true. Clause 19- The Loan amount alongwith other dues is recallable on demand. DLB may recall the entire Loan from the Borrower on any default or event of Default made by the Borrower, or on the Borrower being declared as insolvent or incapable of handling its affairs or for delays in the completion of the project, which, in the opinion of DLB would affect the repayment of the quality of the security or for any reason which, in the sole discretion of DLB, warrants recall of the Loan amount and other dues. Clause 20- DLB reserves its right to transfer or assign this Agreement in favour of any bank, institutions or body in connection with the Loan granted under the Home Loan Scheme of DLB to the Borrower for the purchase of the said unit to be construed by the Builder. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nk/R2 is deliberately not informed the DRT regarding the ongoing CIRP & Liquidation proceedings and R1 is not deliberately represented by the Liquidator before the said court at the behest of the Bank/R2. j. The Bank/R2 has failed to recover its dues from the Builder (R3) before the Adjudicating Authority in CA No. 120 of 2018, later started to illegally recover its dues from the Appellant and R1 Company by filing an application under Section 7 of the Code before the Adjudicating Authority which is illegal, arbitrary and unsustainable in law. k. It was also stated that the Appellant through R1 Company by letter dated 22.04.2013 has informed the Bank/R2 that it has been illegally & deliberately disbursed the partial loan of Rs. 1,34,00,000/- to the Builder (R3) without received the required documents including the NOCs from the Bankers and illegally & fraudulently imposed the loan on the Appellant and R1 Company w.e.f. 01.07.2011 against the provisions given in the Agreement dated 29.06.2011. In spite of repeated request, the builder (R3) or the Bank/R2 have miserably failed to produce the said NoCs before any forum. l. It was also stated that the Appellant has accused the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the R2/ Bank has stated that Sanction letter dated 27.04.2011 of Rs. 1.5 Crore was issued to Respondent No.1 company for purchasing flat from the Builder/ R3 and disbursed of Rs. 1.34 crore directly to the Builder/R3. b. The learned counsel for the R2/Bank has sought permission to mortgage the flats to be built by Builder and supposed to go to R1 Company and the Bank has obtained Corporate Guarantee also. c. It was also stated by the Ld counsel for the R2/Bank that the CD was making payment of the dues in installment alongwith interest to the R2/ Bank till 12.04.2014 and the CD has already paid a sum of Rs. 54,13,999.87 to the R2. Thereafter postdated cheques for repayment of loans started dishonoring or bouncing on its dues which promoted the R2 bank to initiate proceedings under Section 138 of the Negotiable Instrument Act, 1881. d. The R2/Bank has also filed a criminal complaint against the CD and its Directors before the 'Chief Metropolitan Magistrate' in Calcutta. In the meantime, the CD without seeking permission or consent from the R2/Bank executed a 'Nomination Agreement' dated 31.03.2013 alongwith the Builder and transferred the said property/un....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... taking permission of the CD. The said allegation is not correct as per the Agreement as stated above. The amount of Rs. 1.50 Crore deposited by the Builder against the loan borrowed by the CD has not been interpreted correctly. 7. We have carefully gone through the pleadings of the parties and extant provisions of the Code including their written submissions and we are having the following observations: a. It is not in dispute that the Debt has become NPA on 05.07.2014 and Section 7 application for initiation of 'Corporate Insolvency Resolution Process' has been filed on 11.12.2019 by R2/Bank. b. It is also not in dispute that the bank/ R2 has filed a petition before the Hon'ble High Court of Orissa and the same was transferred to NCLT, Cuttack Bench in terms of Notification dated 07.12.2016 of the Central Government. c. The various lists of dates which is appearing in appeal paper book are enumerated herein below: d. There are several issues involved in this case: i. The Debt was disbursed to the Builder for Rs. 1.34 Crore without receipt of necessary documents including NOCs from the Banks (SBI & UBI) of the Builder. ii. The Ban....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctive in mind while invoking Section 433 & 4334 of the Companies Act, and that is for effecting a recovery of his outstanding. In the present day and age when legal proceedings are costly, cumbersome and time consuming, it would be difficult, may well nigh impossible to find an altruistic person who initiates legal action solely with the humorous creditors of a sinking company in mind. Even at the stage of issuing notice of a winding up petition, the company judge is not expected to act mechanically, since winding-tip orders have wide dimensions and fatal consequences. The Judge examines whether a prima facie case has been made out to disclose the respondent company's recalcitrance or inability to pay its debts. The Company Judge thereafter perforce carefully considers the defence put forward by the respondent company. Till this stage, the judge does nothing that is contrary (to) or different (from) adjudication which according to the Concise Oxford Dictionary is to decide judicially regarding a claim, etc. After the introduction of the RDR Act, I find it difficult to accept the preservation of the jurisdiction of the Company Judge to adjudicate upon matters which fall within the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e cannot be used a recovery mechanism when the Hon'ble High Court of Orissa has already taken a particular view and DRT has also taken appropriate decision to get the amount realized to the Bank & the Bank/R2 has realized Rs. 1.5 Crore from Builder/R3 and Rs. 54,13,999/- from CD/R1 against disbursal of Rs. 1.34 Crore. CIRP mechanism is not for a debt recovery as Hon'ble Supreme Court has already settled the law on this aspect. Hence, CIRP cannot be used for bringing a Corporate Debtor to liquidation & thereby enriching Private Sector Bank. j. In view of the above facts and circumstances of the case as also law laid down on the subject; We feel that the Corporate Debtor for the reason(s) aforesaid, we set-aside the impugned order dated 20.02.2020 passed by the Adjudicating Authority ('National Company Law Tribunal, Cuttack Bench at Cuttack') in TP No. 182/CTB/2019 in COPET No. 55 of 2016. In the result, 'Corporate Debtor' - 'Emerald Mineral Exim Pvt. Ltd' is released from the rigour of the 'Corporate Insolvency Resolution Process'. All actions taken by the 'Interim Resolution Professional'/ 'Resolution Professional' and 'Committee of Creditors', if any, are declared illegal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ested to find a solution to this serious problem and requested not to file any complaint against the bank otherwise it will badly damage the reputation of the bank #1: D&B ALLYY Dudek Can lexml Bank Fitch Rating Lid 13 Document 2 GON EMERALD MINERAL EXIM LIMITED 14 GOVERNMENT RECOGNIZED EXPORT HOSH Cart: Sake Na M2, has Baig Four The Be Reed, Kalkata-700 017, WJ INGLA 33 22 350L, FA +31 33 22691592 Raad. O Lan Rand, si Mane, Crack-75301, Orissa, INDIA Citragramp.com, Www.craigs.c It was also discussed that we sale the property and recover our actual dues and Bengal Sluachi Development Limited will refund the loan amount to the bank along with duc inst. Any surplus over & above the cost incured by us including the cost of finance received by us should be refunded to the builder so that they can liquidate the does of the bank and bank will take responsibility of the same. Accordingly, we first proposed the builder to by back the property from us so that our and bank's dues are cleared but builder organized a buyer name Mis Jupiter Phracticals Limited through their broker. The price of the prop....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roperties Interest on down payment to Shrachl From 19.2.2011 to 10.6.2013 14.75 Total payment received by Shrachi plus Costs, Insurance & interest on down Payment on loan & property 82.93,549-09 1.00.000-00 5,00,000-00 30,30.877-64 3.79.57.850-73 Ergeneral Exit Pi тизи D& Dacide with Confidence FiRating Document 4 Annexure t 4 DEBTS RECOVERY TRIBUNAL - 3, KOLKATA Jeevan Sudha Bldg. 8th Floor, 42/C, J.L.Nehru Road, Kolkata - 700071 Before Shri A. K. CHATURVEDI, Presiding Officer Present: For Applicant: IA No. 216 of 2022 [arising out of O.A. No. 104 of 2016] For Defendant 1 to 5: For Defendant No. 6: For Intervener Dhanalaxmi Bank Ltd., Vs M/s. Emerald Mineral Exim LTD. & ORS. Ms. M. Ghosh, Id. counsel None Mr. A. Banerjee, Id. counsel. Mr. N. Mishra, Id. counsel. ORDER Passed on 29 April 2022 This 1.A. arising out of O.A. 104 of 2016 has been filed by the O.A. defendant no.6 seeking relief for a direction upon the applicant bank to refund Rs.1.5 crore along with interest from the date of actual payment till realisation. Affidavit in opposition; rejo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dentationError: expected an indented block after 'if' statement on line 341 Document 8 8 so, security for creating third party interest violating contractual obligation remains 9. O.A. is pending for adjudication since 28.01.2016 wherein Rs.01,80,32,125.00 along with further accrued interest is claimed to be realised from the defendants no. 1 to 6. Undisputedly defendant no.6 was agreed to deposit Rs.1.50 crore as security against their sell of fiat to a third party violating contractual obligation. Learned counsel for the defendant no.6 may argue that order directing to deposit Rs.1.50 crore was also set aside. Therefore, on the basis of principles of restitution aforesaid amount should be refunded. When the matter of refund was remanded to this Tribunal for further adjudication, it goes to say that liberty was also given to the Tribunal to make judicial scrutiny afresh on the question of refund. 10. Admittedly defendant no.6 has violated contractual obligation by creating a third party interest over the secured asset of the applicant bank and for this reason only they have been impleaded in the O.A. in spite of the fact that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(Dictated to Stenographer, transcribed by him, corrected and signed by me and pronounced in the Court on this the 25 day of 2022) (A. K. CHATURVEDI) PRESIDING OFFICER DRT-111, KOLKATA Document 11 19.11.2010 Count No. 19 C.O. 1019 of 2018 Dhanlaxmi Bank Limised M/s. Emerald Mineral Exdm Limited & Ors. Mr. Siddhartha Banerjee, Ms. Sharmistha Laha ... For the Petitioner. Mr Debnath Ghosh, ANNEXURE-23 184 Mr. Shaunak Ghosh. For the Opposite Party No. 6. The revisional application has been filed by the Bank being aggrieved by the order dated February 14, 2018 passed in Appeal No. 80 of 2016 by the Learned Debts Recovery Appellate Tribunal arising out of order dated September 20, 2016 passed in Claim Petition No. OA 104 of 2016 by the learned Deos Recovery Tribunal at Kolkata DRT-III (hereinafter referred to as DRT-li). The petitioner, flled an application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the said Act) before the Learned DRT-II, against the opposite parties seeking. to recover a sum of Rs. 1,80,32,125.50 (Rupees One Cror....
X X X X Extracts X X X X
X X X X Extracts X X X X
....other than the principal borrowers. The petitioner also filed a complaint dated February 2, 2016 before the Indian Banks Association alleging such fraud. The opposite party No.6 filed an application before the DRT-III for deletion of its name from the original application and alternatively for cancellation of the afore-mentioned letter upon it securing the loan. The main grievance of the petitioner in this application is that the presiding officer of Debts Recovery Tribunal-III and the Chairman, Debts Recovery Appellate Tribunal at Kolkata, committed error of jurisdiction. It was submitted that the DRT-III erred in passing the order dated September 20, 2016 on the application of the opposite party No.6 directing the letter of complaint dated February 2, 2016 issued by the Bank to the Indian Banks Association to be withdrawn and/or treated to be withdrawn, if the opposite party no. 6 secured an amount of Rs.1.50 crores which was to be kept in a separate interest ben account. It is the contention of the petitioner that the power of the Tribunal was confined to the provision of Section 17 of the said Act and not beyond the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....no. 6 had perpetrated the fraud in the entire transaction especially by acting in breach of the quadripartite agreement, the same was not proved and no opportunity was given to the opposite party No.6 before by the bank to rebur such allegation. 188 He has relied on the decision of the Hon'ble Apex Court in the matter of B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others, reported in (2006) 11 SCC 548. He has submitted that unless and until the opposite party no. 6 was given an opportunity of hearing and an order was passed holding the said opposite party to be guilty of fraud, the question of issuing the letter datec February 2, 2016 did not arise. He further relies on the decisions of this Court an the matter of Kingfisher Airlines Limited v. Union of India. reported in 2014 SCC Online Cal 19873, where the same principle was reiterated. He further relied on a decision of the Hon'ble Madras High Court in the matter of ICICI Bank Limited v. The Debts Recovery Appellate Tribunal, reported in 2011 (6) CTC 70, and submits that that the Debt Recovery Tribunal in order to secure the ends of . Document 16 justice ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... objection after 19.03.2013 Internal Audit in March, 2013. 7. Company's letter as no response from Bank 09.04.2013 8. Bank's letterto Company asking pending 12.04.2013 Documents Including Builder's bankers NOCFrom SBI & UBI After 21 months of disbursement(13.09.2011) 9. Company's letter to Bank with strong objection 16.04.2013 Against bank's letter dated 12.04.2014 10.Company's letter accusing bank of foul play 22.04.2013 Document 19 & illegal imposing of loan 11.Sale of property to "Jupiter Pharmaceuticals Ltd." 30.06.2013 By the Builder 12."Acknowledgement Of Liability" signed by the Company, its Directors & Guarantor accepted &duly sealed & signed by the Applicant bank (Forged by the bank by putting anti-dated as 25.4.2014) 22.07.2014 13.Criminal Complaint No. 153 filed by Bank 14.CS No.0000007 of 2015 before 20th MM Court Filed by Bank under Section 138 of N.I. Act by Utilising Security Cheque of Guarantor 15.CS No.0385529 of 2014 before 13th MM Court Filed by Bank under Section 138 of N.I. Act by Utilising Security Cheque of Company 25.04.2015 16.Recovery Letter of the bank to Builder, ....