Kotak Mahindra Bank Ltd vs Shree Narmada Aluminium Industries Ltd. & Ors

Ashok Menon, Chairperson

Appeal No. 310 of 2015 is filed by Kodak Mahindra Bank Ltd. which is the Applicant in O.A. No. 229 of 2003 on the files of Debts Recovery Tribunal No. III (D.R.T.), Mumbai which is filed for recovery of the amount due from Shree Narmada Aluminium Industries Limited (‘the borrower company’ for short).

Appeal No. 360 of 2015 is filed by the aforesaid borrower company against the aforesaid Bank and others.

The O.A. was filed originally by the ICICI Bank and the present Appellant M/s Kodak Mahindra Bank Ltd. is an assignee of the debt. During the pendency of the O.A., the Hon’ble High Court of Gujarat approved the scheme under Sec. 391 of the Companies Act. The Bank has also initiated proceeding under the provisions of the SARFAESI Act against the borrower. In the meanwhile, vide order dated 05.01.2015, in Exhibit 29 Application filed by the Bank for appointment of the Receiver, the D.R.T. was pleased to appoint the Senior V.P. of the Bank as a receiver with the power to take possession of the factory premises from the borrower company or from anyone else with the help of police, if necessary. The borrower company had filed an application to recall the appointment of the receiver as Exhibit 100. The D.R.T. rejected that petition and Appeal No. 374 of 2015 is filed by the borrower company challenging that order of the D.R.T. dated 19.10.2015 on Ext.100.

Exhibit 112 is an application that was filed before D.R.T. by an intervener company named Narmada Architectural Systems Ltd. claiming to be a lessee of the factory premises vide a lease deed purportedly executed in its favour by the borrower company on 5. 07.2009 on deposit of ₹50 lacs and on payment of ₹1 lac per month as rent for the factory premises and ₹50,000/- per month as rent for the machinery and equipment, seeking restoration of physical possession of the factory premises on the basis of the said lease agreement. The learned P.O. had, vide order dated 05.10.2015 allowed the application filed by the intervener company, keeping in view that at least a sum of ₹1.5 lacs per month, receivable as rent, would be recovered from the assets of the borrower company towards debt due from them.

The Bank was aggrieved by that order of the D.R.T. dated 5. 10.2015 directing the possession to be handed to the intervener company, and therefore, filed Appeal No. 310 of 2015. Appeal No.360 of 2015 is filed by the borrower company challenging the order of D.R.T. dated 05.10.2015.

The intervener company which claims to be the lessee of the factory premises had in the meanwhile faced financial stress, and BIFR Reference No. 66/2014 is pending. That company had also filed an Appeal as No. 316 of 2015 before this Tribunal challenging the order of the D.R.T. However, in view of the liquidation of the intervener company, the said Appeal No. 316 of 2015 was not pursued further and ended in dismissal.

In view of the dismissal of the Appeal No. 316 of 2015, and in view of the fact that the intervener company is no longer in a position to take over the possession of the property in pursuance to the order in Exhibit 112 dated 05.10.2015, the Appeals challenging the order of the D.R.T. dated 05.10.2015 filed by the borrower company and also the creditor bank have become infructuous. Hence, Appeal No. 310 of 2015 and Appeal No. 360 of 2015 are dismissed.

Appeal No. 374 of 2015 is filed by the borrower company challenging the order dated 19.10.2015 in Exhibit 100 filed by them to recall the order of D.R.T. dated 05.01.2015 in Exhibit 29 appointing a receiver. The learned P.O. had observed that in view of the application filed by the intervener as Exhibit 112 and the order made therein directing the possession of the property to be handed over to the intervener, vide order dated 05.10.2015, the application for recalling the receiver has become infructuous and resultantly, Exhibit 100 filed by the borrower company was dismissed.

Vide order dated 05.01.2015 in Exhibit 29 Mr Charudat Khona the Senior Vice President of the Bank was appointed as a court receiver to take physical possession of the property belonging to the borrower company. The D.R.T. had observed that the lessee intervener company was being managed by the seventh Defendant who is also the Managing Director of the borrower company and therefore, the apprehension expressed by the Bank that the mortgaged property was being alienated appeared true and had consequently appointed the receiver. The receiver has also taken over the possession of the properties.

Exhibit 100 was filed by the borrower company seeking prayer to recall the order of appointment of a receiver. The order of the appointment of the receiver dated 05.01.2015 in Exhibit 29 was never challenged by the borrower company. Hence, the learned P.O. had rightly rejected the application for recalling the order of appointment of the receiver filed long after the order dated 5. 01.2015, though for a different reason of it becoming infructuous. As long as the borrower company did not challenge the appointment of the receiver, it cannot seek the order to be recalled, so long as there is no breach or specific violation by the receiver. I do not find any reason to interfere with the order of dismissal of Exhibit 100. Appeal No. 374 of 2015 is also, therefore, to be dismissed.

In the result, the Appeals Nos. 310 of 2015, 360 of 2015 and 374 of 2015 are all dismissed for the reasons stated above.