Calcutta High Court
Dhrupad Traders Private Limited) vs The Lakshmi Vilas Bank Ltd. (Since ... on 10 February, 2023
ORDER SHEET
OCD-5
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
[COMMERCIAL DIVISION]
IA No. GA/4/2022
In
CS/207/2021
JEJU METALS PRIVATE LIMITED (ERSTWHILE
DHRUPAD TRADERS PRIVATE LIMITED)
VERSUS
THE LAKSHMI VILAS BANK LTD. (SINCE MERGED WITH DBS BANK
INDIA LTD.)
BEFORE:
The Hon'ble JUSTICE ARINDAM MUKHERJEE
Date: 10th February, 2023.
Appearance:
Mr. Swatarup Banerjee, Adv.
Ms. Sutapa Dutta, Adv.
Mr. Shantanu Mishra, Adv.
For the petitioner/plaintiff.
Mr. Tilak Kumar Bose, Sr. Adv.
Mr. B. Tribrewal, Adv.
Ms. Madhumita Patra, Adv.
For the respondent/defendant.
The Court:- The plaintiff availed two facilities from The Lakshmi Vilas
Bank Ltd., which has been taken over by the DBS Bank India Ltd on 27th
November, 2020 being the present defendant. One of the facilities was cash credit
under a separate cash credit account. The said cash credit account is not the
subject matter in this suit as the bank has already initiated proceedings before
the Debts Recovery Tribunal for realization of its unpaid dues under the said
cash credit account. The bank says the claim before the Debts Recovery Tribunal
is about Rs. 30 crores. The figure is, however, disputed by the plaintiff.
This suit pertains to the other facility being the current account
operated by the plaintiff with the defendant bank being Account No.
0207360000000576 under Customer ID 5893390. Although , the plaintiff alleges
that the said current account has been freezed and certain unauthorized
transaction made therein, the defendant bank disputes the same and further
says that the said current account became in operative, as it was not operated for
a considerable period of time.
The question which falls for immediate consideration of this Court is
whether to allow the plaintiff to regularize the said current account and operate
the same. The plaintiff relies upon a judgment reported in AIR 1993 SC 954
(Purewal and Associates and Another-Vs- Punjab National Bank and
Others). Relying upon paragraph 4 of the said judgment, it is submitted by the
plaintiff that they should be allowed to operate the said current account as
permitted by the Hon'ble Supreme Court upon a specific condition in isolation of
other claims of the defendant bank. The plaintiff also says that in view of the
circular of Reserve Bank of India (RBI) dated 19th April, 2022 bearing no.
DOR.CRE.REC.23/21.08.008/2022-23 which is annexed at page 153 of the
petition, the plaintiff cannot open or operate another current account in any
other bank to carry on with its business. It is, therefore, more so required that
the account maintained with the defendant bank should be allowed to be
operated. In the said judgment of Purewal and Associated and Another (supra) the
Hon'ble Supreme Court took into account the commercial aspect of a
manufacturing unit to allow such an unit to operate one of its current accounts
for meeting its statutory outgoings, taxes, wages, salaries, raw-materials etc.
which are the usual business requirements of a manufacturing unit. The plaintiff
is a manufacturing unit and going by that consideration the plaintiff says that
the current account maintained with the defendant bank should be permitted to
be operated with any condition attached thereto in line with the judgment in
Purewal and Associated and Another (supra). The plaintiff has submitted a
tabulation a copy whereof is taken on record. It appears from the said tabulation
the volume of business the plaintiff had and how it had gradually dipped down.
On behalf of the bank, it is submitted that the plaintiff is operating
at least one more current account and produces a statement of account for the
period from 01/02/2020 to 29/02/2020 in respect of Account No.
50200012418715 maintained with HDFC Bank Limited, C.R. Avenue Branch in
the previous name of the plaintiff. Referring to the said statement of account the
defendant says that the said account was opened on 5th June, 2015 and is as per
the said statement of account regular in operation.
The defendant bank says that the submission that the plaintiff
should be allowed to operate the only current account maintained with the
defendant bank is, therefore, incorrect the plaintiff may be having more than one
other current account. The defendant further says that its claim against the
plaintiff for default in the cash credit account is huge and the plaintiff should not
be allowed to operate the bank unless the same is liquidated. The application,
therefore, according the defendant, should be dismissed. Referring to the copy of
the tabulation duly signed by the Managing Director showing the gross
receipts/turn over for the last 5 (five) years the defendant says that it will appear
therefrom that the plaintiff was in regular operation uptill May 2022 and
thereafter its gross receipts/turnover dipped down and had become NIL for the
period from August, 2022 to December, 2022. The defendant in the cash credit
account, however, according to the defendant bank occurred prior to its
business dropped down. Even in 2022, the defendant says, the plaintiff had
substantial turnover when the current account of the plaintiff with the defendant
bank was inoperational. It is an undisclosed mystery as to how the plaintiff
transacted its business. It is probably that HDFC is not permitting operation of
the current account maintained with it to operate which has compelled the
plaintiff to approach this Court otherwise the plaintiff merily continued its
business operation with the aid of the current account maintained with the
defendant bank.
Responding to the objection raised by the defendant it is submitted
on behalf of the plaintiff that the current account referred to by the defendant
under Customer ID 62613969 is no more in operation and cannot be also made
operational in view of the RBI Circular referred to hereinabove.
The plaintiff also submits that apart from the current account
maintained with the defendant bank and that with HDFC Bank which has
become defunct, the plaintiff has no other current account with any bank either
nationalized or private in the country.
After hearing the parties and considering the materials produced
before this Court, although, I am not at all satisfied with the conduct of the
plaintiff yet keeping in mind that the plaintiff is a manufacturing unit and is in a
position to create job opportunities if allowed to function and keeping in mind the
ratio in Purewall (supra) I am inclined to give the plaintiff a chance for a short
span to operate the current account maintained with the defendant bank to show
its bonafide. After meeting all expenses for regularizing the said account and
complying with the statutory requirements the said current account may be
operated for the period of six months for the time being on the terms and
conditions as follows:-
1] The plaintiff shall not operate any other current account
except that with the defendant bank during this period. If there is
any other current account, the operation of which has been stopped
apart from that maintained with the defendant bank, the plaintiff
shall not regularize and operate the same. The plaintiff shall not
during this period open any current account.
2] The plaintiff shall enroute all its transactions through the said
current account maintained with the defendant bank for the next six
months.
3) A sum of Rs. 1,00,000/- (one lakh) every month for this six
months period after the said current account is operated shall be
deducted by the defendant bank 10th of each succeeding month
and/or withdrawn from the said current account which shall be kept
in a separate interest bearing account to be dealt with by the
defendant bank after obtaining appropriate orders from this Court.
4) The defendant bank shall have the right to stop operation of
the current account in case of default in providing the said sum of
Rs. 1,00,000/- (one lakh) per month.
5) The proceedings before the Debt Recovery Tribunal (DRT) filed
by the defendant bank shall not be effected in any manner
whatsoever by the instant order.
The operation of the current account if the plaintiff complies with the
statutory formalities shall be made regularized at the earliest. The six months
period shall operate from the date from which the current account becomes
operational. The defendant bank shall not exercise any lien over the amounts in
the current account for other claims of the defendant bank apart from the said
sum of Rs. 1,00,000/- (one lakh) for the six months period for which the current
account is allowed to be operated for the time being in terms of the instant order
except after obtaining appropriate from this Court.
The directions given in this order are without prejudice to the rights
and contention of the parties and only for the purpose of permitting a
manufacturing unit to function. This shall not create any right and/or equity in
favour or against either of the parties.
This application is, accordingly, disposed of with liberty to the parties
to approach this Court in case of any difficulty.
(ARINDAM MUKHERJEE, J.)
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