Karnataka High Court
M/S United Telecom Limited vs Sri. Chalsani Basavapurniah on 12 December, 2023
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2023:KHC:45196
WP No. 20966 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 20966 OF 2022 (GM-DRT)
BETWEEN:
M/S UNITED TELECOM LIMITED,
NO. 18A/19, DODDANNEKUNDI INDUSTRIAL AREA,
MAHADEVPURA, BENGALURU - 560 048,
REPRESENTED BY ITS DIRECTOR
DR. PADMAVATHI RAO,
AGED ABOUT 65 YEARS.
...PETITIONER
(BY SRI. SHAHSI KIRAN SHETTY, SENIOR ADVOCATE ALONG
WITH SRI. A. MAHESH CHOWDHARY, ADVOCATE)
AND:
1. SRI. CHALASANI BASAVAPURNIAH
SINCE DECEASED
REPRESENTED BY ITS LEGAL HEIRS
Digitally signed by 2. DR. P. PADMAVATHI RAO,
PADMAVATHI B K D/O LATE C. BASAVAPURNIAH,
Location: HIGH DIRECTOR, M/S UNITED TELECOM LIMITED,
COURT OF
KARNATAKA NO.319, INNER CIRCLE,
WHITEFIELD, BANGALORE - 560 048.
3. DR. P. RAJAMOHAN RAO,
S/O LATE P.V. KRISHNA RAO,
DIRECTOR, M/S. UNITED TELECOM LIMITED,
NO. 319, INNER CIRCLE, WHITEFIELD
BANGALORE - 560 048.
4. INDUSLAND BANK LIMITED,
M.G. ROAD BRANCH,
WEST WING DU PARC,
TRINITY CIRCLE, NO.17,
M.G. ROAD, BANGALORE 560 001.
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WP No. 20966 of 2022
5. CANARA BANK,
PRIME CORPORATE BRANCH,
NO.25, M.G. ROAD,
BENGALURU - 560 001.
6. STATE BANK OF INDIA,
IN CUBE BRANCH,
LOCAL HEAD OFFICE COMPLEX,
2ND FLOOR, ABOVE SPB BRANCH,
NEAR EXIT GATE 3, NO.65,
ST. MARKS ROAD, BENGALURU - 560 001.
7. IDBI BANK LIMITED,
SPECIALISED CORPROATE BRANCH,
INFRASTRUCTURE CORPORATE GROUP,
K.H. ROAD, BENGALURU - 560 027.
8. DHANALAKSHMI BANK LIMITED,
BENGALURU BRANCH, NO.13,
KASTURBA ROAD, BENGALURU - 560 001.
9. M/S TRIGYN TECHNOLOGIED LTD.,
NO.88, SAHASRARI EPIP INDUSTRIAL AREA,
6TH ROAD, EPIP ZONE, WHITEFIELD,
BANGALORE - 560 066.
ALSO AT: 37, SDF-1,
SEEPZ ANDHERI (EAST),
MUMBAI - 460 096.
10. PUNJAB NATIONAL BANK,
MID CORPORATE BRANCH,
NO. 21/1, M.G.ROAD,
BENGALURU - 560 001,
REPRESENTED BY ITS
CHIEF MANAGER
MR. SUNDAR RAMAN V.S.
...RESPONDENTS
(BY SRI. S. GANESH SHENOY, ADVOCATE FOR R2;
SMT. LAKSHMI IYENGAR, SENIOR COUNSEL ALONG WITH
SRI. B. PRASANNA KUMAR, ADVOCATE FOR R10)
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NC: 2023:KHC:45196
WP No. 20966 of 2022
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE IMPUGNED ORDER DATED 19.09.2022 PASSED BY
THE HONBLE TRIBUNAL IN I.A.NO.1097/2021 IN
O.A.NO.564/2021 VIDE ANNEXURE-A AS VIOLATIVE OF
PRINCIPLE OF NATURAL JUSTICE AND HENCE ILLEGAL AND
BAD IN THE EYES OF LAW AND ETC.
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner is before this Court, calling in question an
order dated 19.09.2022 passed by the Debt Recovery Tribunal
('the Tribunal' for short) on an application in I.A.1097/2021 in
O.A.564/2021, whereby the Tribunal directs equity shares of
137,01,877 to be attached in favour of the 10th respondent
Bank - Punjab National Bank.
2. Heard learned Senior counsel Sri.K.Shashikiran
Shetty appearing for the petitioner and learned Senior counsel
Smt. Lakshmi Iyengar representing respondent No.10 - Punjab
National Bank (PNB) and the learned counsel Sri.S.Ganesh
Shenoy, appearing for respondent No.2.
3. The transaction between the parties right from the
inception is not required to be noticed, as the present lis as
projected by the respective learned counsel boils down to a
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solitary fact whether it is in violation of principles of natural
justice.
4. The petitioner and the Bank are in dispute over
several transactions. Those transactions are pending
consideration before the Tribunal in O.A.No.564/2021. The
Bank files an application in I.A.No.1097/2021 seeking the
following prayer:
"All the That for the reasons contained in the
accompanying affidavit, this Hon'ble Tribunal may be
pleased to pass an order of attachment of equity
shares as described below invested by the name
1st Defendant in M/s Trigyn technologies Ltd (11th
defendant) in DEMAT format herein before judgment of
the below mentioned identified shares, to meet the ends
of justice."
5. The prayer (supra) was an order of attachment of
equity shares, as sought for in the application. The defendant
No.1 whose shares are sought to be attached is the present
petitioner. The Tribunal issues notice on the application and
the petitioner enters appearance. The matter was listed on
three occasions prior to the passage of the impugned order.
The first occasion, the DRT passed an order, which reads as
follows:
are present. IA 1097/2021 petition for attachment of
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equity shares is against the D-1 is filed for objection.
I.A.1787/2022 a petition for advancement stands
allowed and matter is taken on board."
6. The matter was directed to be re-listed on
17.08.2022 and the DRT passed the following order:
"Counsel for applicant is present. Counsel for D8 &
D9 is present. For hearing, list the matter on
19.08.2022."
7. Though the matter is shown to be listed on
19.08.2022, it is 19.09.2022, as is submitted by both the
learned counsel for the petitioner and learned counsel for the
respondents, the DRT passed the following order:
"Counsel for applicant is present. Counsel for D1,
D4, D5 & D11 & D8 are present. D1, D4, D5, D11 not
filed objections, inspite of sufficient opportunity. D9
filed WS. Name of the D3, D7, D10 are called in the
open court, none represented, hence placed exparte.
IA.No.1097/2021, stands allowed, vide separate order.
Applicant is directed to serve order copy to the other
side. Summons on OA, notice on IA. For further
proceedings before the Registrar court on 24.02.2023."
8. The order of the DRT is that despite granting
sufficient opportunity, defendant Nos.1, 4, 5 and 11 have not
filed their objections and the other defendants are not present
before the Court. Therefore, they were placed exparte and the
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impugned order is passed. The impugned order reads as
follows:
"The present application IA No.564/2021 is filed
by the petitioner bank seeking an order for attachment
before Judgment in respect of equity shares described in
the schedule below invested by 1 Defendant in M/s.
Trigyn Technologies Ltd-Defendant No.11 held in DEMAT
format.
2. The present IA is filed by the applicant bank for
an order of attachment of equity shares of 137,01,877
(Script No.517562) of Investment made by defendant
no.1 with M/s. Trigyn Technologies Ltd. (Defendant
No.11) which is kept in DEMAT Account.
3. The Chief Manager of the applicant bank has
filed the affidavit contending that the OA is filed for
recovery of the amount from defendant no.1 to 5 and
the applicant bank came to know that the defendant no.1
is having equity shares of 137,01,877 purchased from
the 11 defendant. Hence, it is apprehended that
defendant no.1 may try to alienate the identified equity
shares hence the bank has filed the present application
for attachment
Heard and perused the records.
4. On perusal of the loan documents, it reveals
that the Defendants have availed credit facilities from
the applicant bank and due to the defaults committed in
repayments, the present OA is filed for recovery of the
amount due from defendant nos. 1 to 5. The 1st
defendant have purchased the equity shares of
137,01,877 of M/s Trigyn Technologies Ltd. (Defendant
No.11).
5. As the amount due is huge and the defendant
No.1 has held shares of Defendant No.11 the applicant
having made out a prima facie case and balance of
convenience found to be in its favor, to sub serve the
ends of justice, as it was pleaded before this Tribunal,
this Tribunal feels it apt to pass an interim order of
Attachment before Judgment the 137,01,877 numbers
of equity shares morefully described in the schedule
hereunder until further orders.
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6. Accordingly, an interim order of attachment of
137,01,877 number of equity shares held by Defendant
No.1 with M/s. Trigyn Technologies Ltd (Defendant
No.11 herein) is ordered. Defendant No.1 is restrained
from dealing with the above shares in any manner
including the transfer of shares, creating charge or lien
on shares or in any other manner known to law till
further orders of this Tribunal.
7 The applicant bank is hereby directed to
communicate a copy of this interim Order of attachment
to the appropriate authorities in accordance with law
and report compliance.
8. For Notice on IA, reporting compliance and
further proceedings, posted before Registrar."
9. The learned Senior counsel for the petitioner
submits that several submissions were made before the DRT.
Those statement of objections were not filed and none of those
are considered by the Tribunal. A perusal at the order would
clearly indicate that the Tribunal does not consider any
submissions of the petitioner. The order appears as, the
petitioner would have no objection for passing of the order.
The impugned order takes away the shares of the petitioner to
the tune of Rs.29 Crores. Serious economic and civil
consequences ensue upon the petitioner for he would lose the
shares to the tune of Rs.29 Crores. Therefore, the DRT ought
to have considered the submissions of the petitioner in the
least.
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10. Learned Senior counsel for the respondent-Bank
submits that the remedy to the petitioner is before the Debt
Recovery Appellate Tribunal to call in question the order passed
on I.A.1097/2021. The submission though would merit
acceptance in the first blush and in the normal circumstance,
would not become applicable to the facts of the case, as the
order of the DRT is taking away the right of the petitioner in
violation of principles of natural justice. If an order is in
violation of principles of natural justice, as is observed herein
above, it is trite that the writ petition challenging such an
action would become entertainable. Therefore, the said
submission stands rejected.
11. For the aforesaid reasons, the following
ORDER
i. The order dated 19.09.2022 passed by the
Tribunal on an application in I.A.1097/2021 in
O.A.564/2021 set aside.
ii. The matter is remitted back to the hands of
the DRT to consider it afresh and pass
appropriate orders, in accordance with law.
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iii. The petitioner is granted 15 days time from
the date of the receipt of the copy of this
order, before the DRT to application-
I.A.No.1097/2021 and rejoinder, if any, by the
respondent-Bank in the next 15 days,
thereafter.
iv. In the event, the petitioner would not file his
objections within 15 days from the date of the
receipt of the copy of this order, the DRT
would be at liberty to pass appropriate orders
in accordance with law.
v. In the event, the pleadings are complete qua
the application i.e. the petitioner filing the
objections and the respondent-Bank filing its
rejoinder, if any, the DRT shall pass
appropriate orders, within two weeks,
thereafter.
vi. Till such time, the interim order that is
operating, as on today, shall continue.
Sd/-
JUDGE
CPN
CT: BHK
