Delhi High Court
Icici Lombard Gic Ltd vs Vishal Hira Merchants Pvt Ltd. & ... on 5 March, 2015
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: March 05,2015
+ W.P.(C) 7101/2014
ICICI LOMBARD GIC LTD ..... Petitioner
Through: Mr. Saurabh Kripal and Mr. Anilok
Shori, Advocates.
versus
VISHAL HIRA MERCHANTS PVT LTD. & ORS. ..... Respondent
Through: Mr. Parvinder Singh and Ms. Supreet
Kaur, Advocates for R-1 to R-6.
Mr. Kunal Tandon, Ms. Snigdha
Sharma and Ms. Kanika Jain,
Advocates for R-7.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.K.GAUBA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. The petitioner has preferred this writ petition against the order of the
Debts Recovery Appellate Tribunal (hereinafter referred to as "the DRAT")
dated 25.09.2014 in I.A No. 675/2014 refusing to grant stay on the order
dated 29.08.2014 passed by the Debt Recovery Tribunal. The effect of
which is that the petitioner is required to deposit 50% of the amount claimed
by the first respondent to sixth respondent (hereafter called "the
borrowers").
W.P.(C) 7101/2014 Page 1
2. The borrowers have availed credit facilities from the seventh
respondent, HDFC Bank Ltd. (hereinafter called "the Bank"). This was for
the purposes of business. In the course of its commercial activities, the
borrowers incurred losses and they sought indemnification from the
petitioner, the insurer. The petitioner rejected the claim; this led to initiation
of proceedings by the borrowers before the National Consumer Dispute
Redressal Commission (NCDRC). Those proceedings are pending. In the
meanwhile, the Bank proceeded to initiate proceedings for recovery of the
amounts due to it by filing an application under Section 19 of the Recovery
of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter
referred to as "the RDDBFI Act") before the DRT. Concededly, those
proceedings, being OA No. 35/10 are pending. Earlier, the Bank had also
initiated proceedings under Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred
to as "SARFAESI"). The borrowers approached the DRT under Section 17
of SARFAESI by filing SA No. 300/2009. In those proceedings, the
borrower impleaded the insurer too as a party-respondent. The DRT by its
order dated 29.08.2014, directed the insurer to deposit 50% of the amount
claimed by the borrowers, as a pre-condition for contesting the proceedings.
Interestingly, the borrower impleaded the insurer even though the seventh
respondent-Bank had no claim against the insurer. The insurer made an
application claiming that it was neither a necessary nor a proper party and
sought deletion in an application that has not yet been dealt with and
disposed of. That application for deletion is pending. The insurer felt
aggrieved and approached the DRAT urging that the direction to deposit
50% of the amount was not sustainable. The DRAT has by the impugned
W.P.(C) 7101/2014 Page 2
order rejected that application.
3. We have heard counsel for the parties. Ld. Counsel for the Bank
submitted, at the outset, that since there was no stay of proceedings, the
DRAT has, in fact, by its order dated 02.02.2015 dismissed the insurer's
appeal itself. The copy of the said order was produced and is extracted
below:-
"DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI
I.A. No. 675/2014
Inward No. 512/2014
In S.A. No. 300/2009 (Delhi-III)
ICICI Lombard General Insurance Co. Ltd.
Vs.
Vishal Kumar Grover & Ors.
02.02.2015 Mr. Justice Ranjit Singh
Present: Mr. Amilok Shori representing Mr. Amit Tyagi,
counsel for the appellant.
Mr. Sheshank Shekhar, counsel for the
respondents.
On 15th December, 2014 the counsel for the appellant
had placed before me order passed by the Division Bench
staying direction issued by the Tribunal below to deposit 50%
of the insurance amount till the next date of hearing i.e. 10 th
December, 2014. This order was taken on record.
While on one hand the appellant has approached the
High Court against the impugned order and on the other has
filed the present appeal. I am of the view that the appellant
cannot be permitted to avail two separate remedies to impugn
the same order. The appellant will have to either pursue its
remedy before the High Court or before this Tribunal. It is
expected from the appellants that it has disclosed in the Writ
Petition that he has an alternative remedy of appeal which it
W.P.(C) 7101/2014 Page 3
has invoked. Since the Writ Petition filed by the appellant has
been entertained, it would not be legally appropriated to permit
the appellant to pursue its present appeal. The present appeal
is accordingly dismissed as not maintainable as the appellant
has filed a Writ Petition to impugn the same order.
Sd/-
CHAIRMAN"
4. Counsel for the insurer submits that regardless of the outcome of this
order, this court should intervene in the matter since the impugned order is
unsustainable on every count. It was urged that in the absence of any
determined liability on the insurer's part, the DRT's direction is not based
on any principle. Counsel for the borrowers urged that the insurer illegally
withheld the amounts due by rejecting the valid claims made on account of
the law.
5. Ld. Counsel submitted that this court may examine the merits before
passing any order which would ultimately affect the borrowers' rights,
especially with regard to property, given that these proceedings emanate
from the action taken under SARFAESI.
6. This court has carefully considered the submissions. The insurer in
this case was impleaded by the borrowers. There is no material on record to
suggest that the Bank had any claim against the insurer. No doubt, the
borrowers have a claim pending before the NCDRC on account of alleged
wrongful rejection of the insurer's claim for losses. However, the pendency
of those proceedings ipso facto would not lead to any entitlement to claim
any amount since the borrower's claim against the insurer is yet to be
determined and the liability, if any, is the inchoate. As and when it is
W.P.(C) 7101/2014 Page 4
determined, if an adverse order is made against the insurer, it could be
directed to satisfy the claim. However, that is not so here; there is no
existing determined liability of the insurer vis-a-vis the borrower. Such
being the case, the DRT's initial direction to the insurer to deposit 50% of
the amount claimed by the Bank is not based on any known legal principle
or on any statutory liability. Under the circumstances, the DRAT could not
have, in our opinion, mechanically affirmed the order. That it did so and
dismissed the appeal, in our opinion cannot blind this court to the fact that
the basis for the DRTs direction is itself questionable and suspect.
7. In view of the above discussion, the impugned orders of the DRT and
the DRAT are hereby set aside. The subsequent order of the DRAT dated
02.02.2015 likewise cannot be sustained. The matters are remitted to the
DRT which shall proceed and dispose of the matters before it (OA 35/2010
and SA 300/2009) and all connected proceedings including the insurer's
application. The DRT shall render its final order expeditiously, preferably
within three months from today.
8. Writ petition is allowed in above terms.
S. RAVINDRA BHAT
(JUDGE)
R.K.GAUBA
(JUDGE)
MARCH 05, 2015
ik
W.P.(C) 7101/2014 Page 5
