VBC 1 wp8428.11-14.10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.8428 OF 2011 Shri Vithal Agro Products Pvt. Ltd. & Ors. ..Petitioners versus The State Bank of India. ..Respondent. ..... Mr.P.S.Dani with Mr.S.S.Kanetkar for the Petitioners. Mr.K.Kaushik with Mr.Vivek Sawant for the Respondent. ..... CORAM : DR.D.Y.CHANDRACHUD & A. A. SAYED, JJ. October 14, 2011. P.C. : The Respondent has instituted proceedings before the Debts Recovery Tribunal (DRT) at Pune for recovery of its dues against the Petitioners. On 15 September 2008, the Bank communicated the acceptance of the proposal of the Petitioners for a one time settlement in the amount of Rs.3.20 crores as against the total dues of Rs.4.49 crores. Of this, an amount of Rs.0.30 crores was to be paid immediately while the balance of Rs.2.90 crores was payable in four quarterly instalments each of Rs.72.50 lakhs, the first to commence three months from the date of the letter of the Bank. The Petitioners paid an amount of Rs.3.20 crores though beyond the prescribed period. In the meantime, on VBC 2 wp8428.11-14.10 28 July 2010, the Bank moved the Tribunal with an application stating that it was withdrawing the concession given to the Petitioners for breach of the terms of the compromise and that the application which was filed before the Tribunal may be decreed and a recovery certificate be issued. The Debts Recovery Tribunal by its judgment dated 28 July 2010 decreed the claim of the Bank in an amount of Rs.3.31 crores on which interest was granted at the rate of 10% per annum from 20 March 2006 till realization. The Bank was granted liberty to sell the mortgaged properties after two months from the date of the order. A recovery certificate has been issued. The Petitioners filed an appeal before the DRAT in September 2010. Until the Chairperson of the DRAT retired sometime on 2 July 2011, the Court has been informed, no interim or ad­interim order had been passed by the Appellate Tribunal. In the meantime, the Bank has issued a notice under Section 13(2) and has taken a measure under Section 13(4) by taking over possession of the secured asset. A notice for sale has been issued by the Bank on 12 September 2011. 2. The submission of Counsel appearing on behalf of the VBC 3 wp8428.11-14.10 Petitioners is that the notice for sale mentions the amount due as Rs.3.70 crores together with interest; which is at variance with the amount which is found due upon adjudication by the DRT. Moreover, it has been submitted that in the present case, the Petitioners had deposited the agreed amount of Rs.3.20 crores though after the prescribed period laid down in the letter of acceptance issued by the Bank. Counsel submitted that either this Court may allow the Petitioners to move the DRAT for interim relief in the appeal pending against the order of the Tribunal, or in the alternate, if the Petitioners are required to move the Tribunal against the measure adopted under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Securitization Act). Some measure of protection may be granted in the meantime, since the property is listed for sale today. 3. On the other hand, it has been urged on behalf of the Bank that the compromise was withdrawn upon the failure of the Petitioners to abide by the terms of the compromise. The Petitioners, it is submitted, were all along aware of the steps which VBC 4 wp8428.11-14.10 have been taken by the Bank under the Securitization Act. Moreover, it is submitted that though an appeal was filed before the DRAT in September 2010, no application for interim relief was moved until July 2011 when the Chairperson retired. Hence, it has been urged that no case for interference has been made out under Article 226 of the Constitution. ­4. The Respondent has a recovery certificate in the amount of Rs.3.31 crores together with interest at the rate of 10% per annum with effect from 20 March 2006. Though an appeal has been filed by the Petitioners, the DRAT has not been moved for any interim relief for over one year. The Bank has now taken recourse to its rights under the Securitization Act by issuing a notice under Section 13(2) and taking a measure under Section 13(4). The Petitioners have an alternate remedy under Section 17 before the Tribunal. In view of the judgment of the Supreme Court in United Bank of India vs. Satyawati Tondon,1 this Court under Article 226 of the Constitution could not be inclined to interfere in respect of the measure taken under the Securitization Act. 1 (2010) 8 SCC 110 VBC 5 wp8428.11-14.10 ­5. As noted earlier, however, the submission of the Petitioners is that some reasonable protection may be afforded to them, the urgency being that tenders are to be opened today for the sale of the property. During the course of the hearing, we have indicated to Counsel appearing on behalf of the Petitioners that we would consider that request provided the Petitioners are in a position to pay a substantial amount to establish their bona fides. According to the Counsel appearing on behalf of the Respondent, the dues outstanding as of now are Rs.1.50 crores. Without going into the exact computation of the outstanding dues, which we are not called upon to decide at this stage, and having due regard to the fact that the Petitioners have already deposited an amount of Rs.3.20 crores, we are of the view that the ends of justice would be met if as a condition for the grant of ad­interim protection, the Petitioners are required to deposit an amount of Rs.50 lakhs with the Respondent. Counsel appearing on behalf of the Petitioners states that of the aforesaid amount, which the Petitioners are agreeable to deposit, the Petitioners shall pay to the Bank an amount of Rs.25 lakhs on or before 17 October 2011, while the balance shall be deposited with the Bank on or before 28 October VBC 6 wp8428.11-14.10 2011. The aforesaid statement has been made by Counsel appearing on behalf of the Petitioners on the instructions of Petitioner No.4 who is present in Court. We direct that conditional upon the deposit being made, the Bank shall not finalise the offer which have been received for the sale of the property, but shall defer that process for a period of eight weeks from today. During this period, it would be open to the Petitioners to move the appropriate forum for the grant of interim relief or, as the case may be, to challenge the action adopted under the Securitization Act. In the event that there is a default in the payment of the aforesaid amount, or any part thereof, the Respondent will be at liberty to take necessary steps in accordance with law. In the event that the amount as directed is deposited, for a period of eight weeks, the Respondent, as directed earlier, shall not finalise the offer which have been received. The Petition is accordingly disposed of. ( Dr.D.Y.Chandrachud, J.) ( A. A. Sayed, J.)