M/S Planet Colors Eco Townships ... vs State Bank Of India & Ors.
2014 Latest Caselaw 2859 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Date of decision: 1st July, 2014

+                              LPA No.395/2014

       M/S PLANET COLORS ECO TOWNSHIPS LTD. ..... Appellant
                    Through: Mr. Muneesh Malhotra with Mr.
                             Achin Mittal, Advs.

                                  Versus

    STATE BANK OF INDIA & ORS.         ..... Respondents
                  Through: None.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. This intra-court appeal impugns the order dated 19.03.2014 of the

learned Single Judge of this Court of dismissal of W.P.(C) No.1796/2014 filed

by the appellant.

2. The said writ petition was filed seeking, (i) appointment of a three

member committee to supervise and overview the process of development of

the property, of the appellant at Bhiwadi, mortgaged with the consortium of the

three respondent banks viz. State Bank of India (SBI), Punjab National Bank

(PNB) & State Bank of Travancore (SBT), with one nominee of the Court, one

nominee of the respondent banks and one nominee of the appellant; and, (ii) for

deposit of the proceeds of the commercial space to be developed on the said

property in escrow account, after deducting the expenses of development, to be

distributed after the liability of the appellant to the respondent banks has been

determined; and, (iii) for a direction to the respondent banks to issue NOC to

the prospective buyers of the commercial space.

3. The learned Single Judge dismissed the writ petition holding that the

appellant had the remedy of appeal to the Debt Recovery Tribunal (DRT)

against the order if any of the respondent banks under the Securitization and

Reconstruction of Financial Assets and Enforcement of Security Interest Act,

2002 (SARFAESI) against the appellant. The appellant applied for

modification of the said order and vide order dated 04.04.2014, it was clarified

that if the respondents approach the Chief Metropolitan Magistrate (CMM)

under Section 14 of the SARFAESI Act, then no coercive steps for taking over

possession of the secured assets of the appellant shall be taken for a period of

two weeks therefrom.

4. The counsel for the appellant before us has argued that the relief claimed

by the appellant is not available to the appellant by way of appeal to the DRT

under the SARFAESI Act. It is argued that the respondent banks, if succeed in

taking over possession of the property of the appellant at Bhiwadi and in

disposing of the same as it is, the same will not fetch enough to meet the

demand of the respondent banks and which will result in the respondent banks

invoking the personal guarantees. It is argued that the property, if developed as

has been proposed by the appellant and which is possible and for which

preliminary steps have already been taken by the appellant, can fetch enough to

repay the entire demand of the respondent banks and may leave some surplus

for the appellant. It is yet further contended that unless the same is done, the

appellant will suffer injury inasmuch as the Directors of the appellant who have

given their personal guarantees would face action against their personal

properties as well.

5. We have enquired from the counsel for the appellant that if the property

is capable of such development and of so reaping profits, in excess of the

claims of the respondent Banks against the appellant, why does the appellant

not tie up with some other developers and from the consideration received from

such other developers repay the dues of the respondent banks or place a

proposal before the respondent banks for the same.

6. No answer is forthcoming.

7. We have yet further enquired from the counsel for the appellant that if

the property, on development is capable of yielding so much more, the price for

sale thereof as it is should also be proportionate.

8. Again no explanation is being offered.

9. The process of development of property entails not only obtaining the

various sanctions therefor but the process of construction, booking of the

proposed developed space, entering into agreements with the prospective

buyers, marketing etc. Such works have been held to be not specifically

enforceable as they cannot be supervised by the Court and as they entail doing

of miniscule things spread out over a long period of time. Even if there were to

be any merit in the contention of the appellant, we cannot ask the respondent

banks who do not have any experience of such development to, for the sake of

the appellant, undertake the said exercise and outcome whereof is very

uncertain. Such a direction if given would necessarily result in this Court

interfering with the action already initiated by the respondent banks under the

provisions of the SARFAESI Act. What is prohibited to be done directly

cannot be permitted to be done indirectly. We cannot constitute a committee

and start an exercise which we are unable to supervise and doing of which is

fraught with risk and has the potential of creating further complications. Rights

of third parties will have to be created, without the respondent banks

immediately earning anything from its secured asset and which will also dilute

the security in the hands of the respondent banks.

10. The Supreme Court recently in Jagdish Singh Vs. Heeralal (2014) 1

SCC 479 has also held that any person aggrieved of any of the measures

referred to in Section 13(4) of the SARFAESI Act has got a statutory right of

appeal to the DRT under Section 17; that if any aggrieved person has got any

grievance against any such measures, the remedy open to him is to approach

the DRT or the Appellate Tribunal. In another recent judgment in Standard

Chartered Bank Vs. Dharminder Bhohi MANU/SC/1004/2013 it was held

that the intendment of SARFAESI Act is for speedy recovery of dues of the

bank and the tribunals have been established with a specific purpose to see that

the disputes are disposed of quickly, regard being had to the larger public

interest. We are of the view that in the facts and circumstances, neither any

case for entertaining the writ petition or this appeal, in the face of the

alternative remedy available, is made out and rather the reliefs claimed in the

writ petition and this appeal are intended to delay the recovery of dues by the

respondent banks and which is against the intendment of the Act.

11. The writ petition as well as this appeal are thoroughly misconceived.

The appeal is dismissed.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE JULY 01, 2014 'gsr'