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Judgment
Moushumi Bhattacharya, J
The Court : This Court had passed an order on 23rd December, 2019 giving certain directions on the concerned person of the defendant no.1 in
respect of an amount of Rs.93,35,580.00 which the defendant no.1 had invested in a fixed deposit with the State Bank of Travancore pursuant to the
order dated 15th May, 2006 passed by the Court. By the said order the defendant no.1 was to invest the amount in any nationalized bank in a suitable
interest bearing fixed deposit to be kept in the credit of the suit. The plaintiff was to be informed of this investment by the defendant no.1. The third
direction contained in the order dated 23rd December, 2019 was on the defendant no.1 to ensure that the amount mentioned in the letter dated 7th
July, 2006 of the defendant no.1 and stating that the amount invested was Rs.93,35,580.00 and any further amounts added to the aforesaid amount
would have to be kept to the credit of the suit as directed by the earlier order dated 15th May, 2006. It was further directed that this amount, i.e. Rs.93
lakhs together with the further amounts was to be kept separate and distinct from the NCLT proceedings. The defendant no.1 was directed to furnish
information to this effect to the plaintiff every three months.
These directions were required since an order of moratorium under Section 14 of the IBC had been passed by the NCLT on 28th November, 2019 on
all further proceedings filed against the defendant no.1. A letter has now been produced on behalf of the defendants addressed by the Deputy General
Manager of SBI to Mr. C.A. Vasudevan Navneeth, the Interim Resolution Professional (I.R.P.) appointed in the insolvency proceedings. The letter is
dated 29th January, 2020 and is written by the Deputy General Manager of SBI with regard to the position of the fixed deposit receipts issued as per
the directions of the Court. This letter is kept on record.
The letter contains a tabulation showing that the amounts put in by way of the deposit which has now appreciated to a total of Rs.2,58,26,679/- being
the principal amount which will become Rs.2,76,18,575/- on reaching the maturity date. The letter also states that the State Bank of Travancore,
Velloor Branch in which the defendant no.1 put in the amount, merged with SBI and is now called ‘SBI, Velloor Branch’. The next fact is that
the defendant no.1 made the deposits without informing the erstwhile State Bank of Travancore that the deposits were being made pursuant to
directions of the Court. These deposits have apparently been renewed on a regular basis on subsequent maturity dates. The fact to note is that on 3rd
October, 2013, the defendant pledged these deposits and availed an overdraft loan of Rs.1 crore, which was enhanced to Rs.1.50 crores on 2nd April,
2014 and then to Rs.1.60 crores on 30th September, 2014. However, since the interest was not serviced, the accounts of the defendants became NPA
on 5th April, 2019 pursuant to which, recovery proceedings were initiated against the defendant. It is also stated that a suit was filed before DRT
Emakulam and that the SBI submitted a claim in the insolvency proceedings for the cash credit accounts etc.
All the above facts have been specifically stated in the letter of the SBI dated 29th January, 2020.
From the above, it is evident that State Bank of Travancore which held the fixed deposit of the defendant no.1 pursuant to the direction of this Court is
no longer in existence in view of the merger with SBI. The date of the merger is not evident from the letter. Second, SBI has not taken responsibility
of the events which took place before the merger and has put the onus of non-disclosure of the Court orders on the erstwhile entity which is no longer
in existence. What is significant that the defendant utilized these deposits for availing overdraft loan up to Rs.1.60 crores from 3rd October, 2013 to
30th September, 2014 in respect of the money which was to be kept by the defendant to the credit of the suit. This direction contained in the order
dated 15th May, 2006 was reiterated in the order dated 23rd December, 2019 passed by this court. It is inconceivable therefore that the amounts
which were to be specifically kept for the purpose of the suit, the entire matter being subjudice before this Court from 2005 onwards, could have been
utilized at all by the defendant no.1 for taking a loan. It is difficult to accept that the State Bank of Travancore was oblivious of the order of 15th May,
2006, when fixed deposit account had been opened by the defendant in 2006. The subsequent act of the same bank i.e., State Bank of Travancore in
permitting the defendant to utilize the very same amount for collateral purposes is hence required to be examined and investigated further.
Even more significant is that the defendant’s Annual Report of 2016-17 contains a specific note that the original deposit of Rs.93.36 lacs was
made on a direction given by the court.
In view of the above certain directions are necessary to protect the interest of the plaintiff in the suit hearing of which commenced from May, 2018.
The following directions are being passed on SBI, Velloor Branch as well as SBI, Kochi (at the address mentioned in the letter dated 29th January,
2020), which has disclosed the facts as stated above in the letter dated 29th January, 2020. Both the Banks will
(i) Inform the Court by way of a communication as to the date of the merger between the State Bank of Travancore resulting in SBI, Velloor Branch.
(ii) Disclose the relevant records of the State Bank of Travancore at the material point of time in respect of the creation of the fixed deposit account
by the defendant no.1 pursuant to the order dated 15th May, 2006.
(iii) Disclose all the relevant records pertaining to the availing of the overdraft loan facilities by the defendant no.1 from the State Bank of Travancore
on 3rd October, 2013 until 30th September, 2014 or thereafter.
(iv) Disclose all relevant records pertaining to the accounts of the defendant becoming NPA on 5th April, 2019.
The above directions should be complied with by the Deputy General Manager of the Stressed Assets Management Branch or any other responsible
officer of the said bank under a covering letter and sworn by way of accompanying affidavit within three weeks from date.
The advocate-on-record of the plaintiff will communicate this order to the concerned officer of the SBI at the address mentioned in the letter of 29th
January, 2020. The advocate-on- record of the plaintiff will also communicate this order to the SBI, Velloor Branch.
List this matter on 13th March, 2020.