State Bank Of India vs Hubtown Bus Terminal (Vadodara) ...
2022 Latest Caselaw 9204 Guj

     C/LPA/1/2022                            ORDER DATED: 18/10/2022




       IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/LETTERS PATENT APPEAL NO. 1 of 2022
                               In
          R/SPECIAL CIVIL APPLICATION NO. 10985 of 2021
                              With
           CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
                               In
             R/LETTERS PATENT APPEAL NO. 1 of 2022
                              With
 CIVIL APPLICATION (FOR MODIFICATION OF ORDERS) NO. 2 of 2022
                               In
             R/LETTERS PATENT APPEAL NO. 1 of 2022
                              With
    CIVIL APPLICATION (FOR EXTENSION OF TIME) NO. 3 of 2022
                               In
             R/LETTERS PATENT APPEAL NO. 1 of 2022
                              With
 CIVIL APPLICATION (FOR MODIFICATION OF ORDER) NO. 4 of 2022
                               In
             R/LETTERS PATENT APPEAL NO. 1 of 2022
==================================================
                    STATE BANK OF INDIA
                           Versus
           HUBTOWN BUS TERMINAL (VADODARA) PVT LTD
==================================================
Appearance:
MR R.S. SANJANWALA, SENIOR ADVOCATE WITH
MR RITURAJ M MEENA(3224) for the Appellant(s) No. 1
for the Respondent(s) No. 3
MR SHALIN MEHTA, SENIOR ADVOCATE WITH
MR ARJUN R SHETH(7589) for the Respondent(s) No. 1
MR HARDIK C RAWAL(719) for the Respondent(s) No. 2
==================================================

 CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
       ARAVIND KUMAR
       and
       HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

                         Date : 18/10/2022
                           ORAL ORDER

(PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR)

1. This appeal has been filed by the secured creditor

C/LPA/1/2022 ORDER DATED: 18/10/2022

assailing the correctness and legality of the judgment and order

dated 10.12.2021 passed in Special Civil Application No.10985

of 2021 whereunder the learned Single Judge has issued certain

directions which reads as under:

"9. In view of the above facts, it would be in interest of justice in all lease deeds executed and the amount of premia deposited by the petitioner as well as with regard to the cases in which the petitioner has accepted the part amount of premia which is deposited in the escrow account for which the agreement to lease is executed, it is ordered that the respondent-Bank has deemed to have issued the No Objection Certificate on the date on which such lease deeds and agreements to lease are executed.

10. Therefore, as far as the lease deeds which are executed or which are executed in part, there shall not be any need for issuance of No Objection Certificates by the respondent-Bank subject to the right of both the sides to agitate before the appropriate forum with regard to the fulfillment of the terms and conditions of the agreement entered into between the petitioners and the respondent- Bank.

11. It is also directed that the petitioner shall co-

C/LPA/1/2022 ORDER DATED: 18/10/2022

operate and provide all the information which the respondent-Bank requires for the purpose of investigation or any other purpose in accordance with law.

12. It is also made clear that in future if the petitioner wants to execute any lease deed and it shall make an application for No Objection Certificate from the Bank and if the respondent Bank within one week fails to issue any No Objection Certificate, then the petitioner is permitted to execute lease deed on condition of deposit the entire amount in the escrow account."

2. Respondent No.2 and respondent No.1 had entered into a

concession agreement on 26.8.2010 whereunder respondent

No.1 was given right to develop, design, finance, construct,

operate and maintain GSRTC Bus Terminal at Makarpura,

Vadodara and to put up a building and lease the units under the

commercial facility. Respondent No.1 entered into a loan

agreement on 28.9.2012 with the appellant for extension of

financial facility to undertake the project envisaged under under

the agreement dated 26.8.2010. On account of respondent No.1

having borrowed the amount from appellant bank and defaulted

C/LPA/1/2022 ORDER DATED: 18/10/2022

in payment of loan installments, appellant bank after having

classified the loan account of respondent No.1 as an NPA

account has filed OA No.1000 of 2018 before the Debts

Recovery Tribunal, Ahmedabad for recovery of its dues. On

26.7.2018, the Tribunal passed an ad-interim ex parte order

restraining the respondent No.1 from transferring, alienating or

creating any encumbrance in any manner the movable and

immovable assets that has been mortgaged / hypothecated in

favour of the bank. Seeking modification of the said order, IA

No.2360 of 2020 came to be filed by respondent No.1 and filed

IA No.1922 of 2021 seeking direction for extension of OTS

period. The said applications came to be disposed of by order

dated 22.7.2021 under which application for modification came

to be allowed partly and application for extension of OTS came

to be dismissed. Hence, both appellant and respondent No.1

herein filed appeals before the Debts Recovery Appellate

Tribunal, Mumbai - respondent No.3 herein in Appeal No.73 of

2021 and Appeal Nos.25/2021 and 450/2021 respectively. On

account of there being no Presiding Officer of Debts Recovery

Appellate Tribunal, Mumbai, respondent No.1 approached this

C/LPA/1/2022 ORDER DATED: 18/10/2022

Court in Special Civil Application No.10985 of 2021 in which the

impugned order dated 10.12.2021 came to be passed by issuing

certain directions to the appellant bank and as such, the present

appeal has been filed. The matter was listed from time to time

and arguments have been canvassed on more than one

occasion. However, wisdom having dawned on the parties it has

resulted in settlement being arrived at between contesting

parties viz. appellant (State Bank of India) and respondent

[Hubtown Bus Terminal (Vadodara) Pvt. Ltd.] whereunder both

parties have agreed and consented for modification of the

impugned order as per the terms set out in the consent terms

filed today. The terms as agreed to between the parties read as

under:

"a. That the amount of Rs.5.80 crores lying in RERA Account with Appellant shall be appropriated towards the loan account of the Respondent no.1 with the Appellant.

b. With regard to any units where final NOCs has not been issued, the Respondent No.1 shall provide requisite details for such units while making application for seeking NOC.

 C/LPA/1/2022                            ORDER DATED: 18/10/2022




c.      However, if the Appellant is not satisfied with

the value consideration of such unit(s) then the R1 at its option may deposit the differential amount in the RERA / Escrow account with the Appellant for the release of provisional NOCs with the Appellant or alternatively, with regard to any dispute between the parties (including but without limitation) in respect of issuance of NOCs or valuation of units or any other issues for the units where NOC has not been issued, it will be open for either party to approach the Hon'ble DRT, Ahmedabad in the pending OA by filing an IA and the Hon'ble DRT, Ahmedabad will decide the said application in accordance with law as expeditiously as possible and within an outer limit of 3 months.

d. If the Appellant is satisfied with the value consideration of the unit(s) and the R1 has deposited the differential amount as sated above in clause 'c', the Appellant shall promptly release provisional NOC(s) for such units.

e. On release of provisional NOC(s), the R1 shall promptly deposit the agreement value of the unit for which NOC(s) is sought including the differential amount as stated above in clause 'c', in RERA / Escrow account with the Appellant.

 C/LPA/1/2022                                          ORDER DATED: 18/10/2022




f.      That on deposit of the agreement value of such

units including the differential amount as stated above in clause 'c' in the RERA / Escrow account for which provisional NOC(s) is issued, the Appellant shall promptly issue final NOC(s) for execution and registration of respective lease deed(s).

g. For the units where R1 has deposited entire value of the unit(s) as per clause 'e' including the shortfall in valuation as stated above in clause 'c' above, and subsequently the lease premia from the bankers of the purchasers is deposited into the RERA / escrow account pursuant to execution and registration of such lease deeds, the Appellant shall be entitled to appropriate the latter amount from the RERA / Escrow account (viz. 'premia from bankers'). Thereafter, the amounts already deposited by the R1 as referred in this clause 'g' to the extent received from the bankers of the purchaser, the same shall be considered towards future NOCs for remaining units.

h. To trigger the aforesaid arrangement, the R1 shall deposit a sum of Rs.50,00,000/- within 7 working days of passing of order by this Hon'ble Court for implementing this arrangement which amount shall considered towards future NOCs for remaining units, as per clause 'e' and 'g'

C/LPA/1/2022 ORDER DATED: 18/10/2022

hereinabove.]

i. This arrangement will be continued and valid for a period of 1 year from the date of the order that may be passed by this Hon'ble Court, subject to further time that may be mutually agreed between the Appellant and the R1 for the purpose of issuance of NOC and for the remaining units in the commercial facilities.

j. Towards the end, after issuance of NOCs of all the units and all units are disposed of, the additional funds brought in by the R1 in the RERA / escrow account with the Appellant under the arrangement mentioned herein (which is greater than the aggregate value of the units leased out under this arrangement) shall forthwith be returned to the Respondent no.1 by the Appellant. It is clarified that the Appellant shall appropriate amounts from the RERA / Escrow account only to the extent of the value mutually agreed between the Appellant and R1 of the unit(s) for which NOC is issued for execution of lease deeds.

k. This Hon'ble Court be pleased to direct the Hon'ble DRAT, Mumbai to decide two appeals filed by Respondent No.1 and one appeal filed by the Appellant together within an outer limit of 3 months

C/LPA/1/2022 ORDER DATED: 18/10/2022

from a date of receipt of copy of this order.

l. The Appellant and the Respondent No.1 are at liberty to work out a settlement in an expeditious manner for repayment of the outstanding loan amount to be mutually agreed upon and the time frame thereto and for the disposal of the balance units in the commercial facilities.

m. This Hon'ble Court be pleased to direct the Hon'ble NCLT, Ahmedabad before whom the insolvency petition being CP (IB) No.363 of 2020 is instituted by the Appellant, to defer the hearing of the same for a period of 6 months from the date of receipt of a copy of this order."

3. Above said consent terms results in respondent No.2

herein executing the lease deed in favour of lessees and the

lessees, in turn, would deposit the amount payable to

respondent No.1 in an escrow account with the appellant bank

who, in turn, would be entitled to appropriate the same towards

loan account, for which NOCs are to be furnished by appellant

bank and same having been agreed to be furnished by the

appellant as stated in the terms of settlement noted

hereinabove, this appeal would stand disposed of in terms of the

C/LPA/1/2022 ORDER DATED: 18/10/2022

settlement arrived at and substituting the order of the learned

Single Judge to that of the terms set out hereinabove.

4. It is made clear that respondent No.2 herein shall execute

the lease deeds in respect of the parties identified by

respondent No.1 as agreed under the concession agreement

dated 26.8.2010 and subject to the consent terms as entered

into hereinabove between appellant and respondent No.1.

5. In view of the above, the interim order passed in this

appeal stands vacated and by virtue of the same, parties would

be required to act upon the consent terms in true letter and

spirit. It is also made clear that by virtue of the settlement

having been entered into between the parties, Special Civil

Application No.10985 of 2021 would not survive and writ

applicant viz. applicant in the said Special Civil Application

would file necessary purshis for withdrawal of the said Special

Civil Application before the learned Single Judge and it is also

made clear that in the insolvency petition being CP (IB) No.363

of 2020 filed by appellant bank which is pending before the

National Company Law Tribunal, Ahmedabad would be deferred

C/LPA/1/2022 ORDER DATED: 18/10/2022

as agreed between the parties for a period of six months from

the date of receipt of the copy of this order, in view of the

application for OTS filed by respondent No.1 before the

appellant being pending and in view of the consent terms

entered into between the parties. In view of appellant and

respondent No.1 making attempts to work out a settlement for

repayment of the outstanding loan amount as may be mutually

agreed upon including the time-frame thereto which we do hope

and trust would be brought about between the parties in view of

the present settlement, the appeals before the Debts Recovery

Appellate Tribunal may also be rendered infructuous and in

such an event, the parties would be at liberty to make mention

before the Debts Recovery Appellate Tribunal for appropriate

orders being passed thereon. Accordingly, appeal stands

disposed of. All pending applications stand consigned to

records.

(ARAVIND KUMAR,CJ)

(ASHUTOSH J. SHASTRI, J) Bharat