Unipulp Agro Industries vs The Kerala Financial Corporation
2021 Latest Caselaw 6230 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

                 THE HONOURABLE SMT. JUSTICE P.V.ASHA

    MONDAY, THE 22ND DAY OF FEBRUARY 2021 / 3RD PHALGUNA, 1942

                      WP(C).No.26549 OF 2020(P)


PETITIONER:

               UNIPULP AGRO INDUSTRIES
               PLOT NO.72, KINFRA FOOD PARK,
               SPECIAL ECONOMIC ZONE, KAKKANCHERRY,
               CALICUT UNIVERSITY P.O.,
               MALAPPURAM DISTRICT,
               PIN - 673 635,
               REPRESENTED BY ITS MANAGING PARTNER
               N.V.KUNHABDULLA.

               BY ADVS.
               SRI.BABU CHERUKARA
               SRI.ARUN BABU

RESPONDENTS:

      1        THE KERALA FINANCIAL CORPORATION
               VELLAYAMBALAM,
               THIRUVANANTHAPURAM,
               PIN - 695 033,
               REPRESENTED BY ITS MANAGING DIRECTOR.

      2        BRANCH MANAGER,
               KERALA FINANCIAL CORPORATION,
               BRANCH OFFICE AT MANUEL SONS BUILDING,
               G.H.ROAD,
               KOZHIKODE - 673 001.

               R1 - SRI. M. R.VENUGOPAL
               R1 - SMT. DHANYA P.ASHOKAN

     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
22.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.26549 OF 2020

                                     2




                                JUDGMENT

Dated this the 22nd day of February 2021

The writ petition is filed seeking the following reliefs:-

"a) Issue a writ of mandamus or any other appropriate writ or order directing the respondents allowing the petitioner to repossess the factory, godown, and office of the petitioner established at Plot No.72, Kinfra Food Park Special Economic Zone, Kakkancherry, Calicut University P.O Malappuram District for functioning the industry forthwith.

b) Order allowing the petitioner to pay off the amount due to KFC as mentioned in Exhibit P-14 request and to regularize the arrears within a period of one year."

2. Eventhough an interim order was passed on

01.12.2020 directing the respondents to release perishable

articles to the petitioner within a week on condition that the

petitioner makes payment of Rs.10,00,000/-, it was stated

that the petitioner could not make the payment as directed.

The respondents thereafter filed a counter affidavit

explaining the details of loan by the petitioner as well as the

amount due from the petitioner. It is stated in paragraph 8 WP(C).No.26549 OF 2020

as follows:-

"8. The petitioner has defaulted in repayment from the beginning of 2018 and the account turned NPA on 02.05.2018. Even after repeated requests petitioner failed to clear the arrears. After giving ample opportunity to the petitioner to clear the arrears, the respondents issued Revenue Recovery Notice on 24.07.2018 initiated coercive measures under Sect.29 of SFC's Act on 21.02.2019 and initiated Revenue recovery action against the collateral security vide requisition No.2019/5529/11 on 10.05.2019. RRC was issued on 03.10.2019 and the revenue recovery action is still in force. The respondents proceeded with the Recovery actions by following all the procedures properly."

3. The 1st respondent has stated that the unit was

taken over on 23.11.2020, after issuing notice on

28.10.2020 and thereafter affixing notice on 11.11.2020.

The writ petition was filed at that stage after the building was

taken over pointing out that perishable articles were

available in the building. In paragraph 15 of the counter

affidavit the 1st respondent has stated as follows:-

"15. The petitioner has stated that a stock of pineapple products valued for about Rs.95 lakhs is available within the factory. The Corporation has no objection in releasing stock on remittance of RS.10 lakhs in order to avoid damage to processed food stock of perishable nature. The Corporation has also no objection in releasing the custody of the WP(C).No.26549 OF 2020

unit provided the petitioner pays Rs.50 lakh towards the overdue and agrees to pays balance in three equal instalments. And also pay the regular instalments along with the aforesaid payments."

4. The petitioner has filed reply affidavit producing a

copy of DD No.502134 drawn on ICICI Bank in favour of

K.F.C Ltd. on 15.02.2021 as Ext.P16 and stating that

petitioner has found out a financial promoter cum partner -

one Mr. Joseph Varghese, who has made available a sum of

Rs.50,00,000/- covered by the said DD, towards re-payment

of the petitioner's liabilities with K.F.C Ltd. The petitioner

further stated that the said promoter is financially well

enough to support the petitioner in running the unit with the

permission of the K.F.C.

5. The learned counsel for the respondents submitted

that the petitioner has not approached the 1 st respondent so

far, with the said DD. In paragraph 4 of the reply affidavit

petitioner has stated as follows:-

"4. The petitioner partnership can be incorporated with additional partner Mr.Joseph Varghese mentioned above and subsequently the character of the partnership need to be converted in to a private limited company. In the above situation apart form WP(C).No.26549 OF 2020

the above payment of Rs.50 lakhs further payment of Rs.20 lakhs will be done within one month from the date of repossession of the unit and will continue to pay Rs.20 lakhs in every month towards arrears of the loans and towards the principal repayment a regular payment of Rs.6 lakhs per month will also be done till the liability is finally cleared off. This is a very practical solution for the smooth functioning and repayment of the loan liabilities with the K.F.C. Ltd. The K.F.C Ltd has to waive the penal interest and incidental charge claims against the petitioner taking in to account of over all financial strains in the industry due to Covid-19 pandemic etc."

6. The learned Standing Counsel for the respondents

submits that the unit would be handed over to the petitioner

the moment the DD is produced before the 1st respondent.

Therefore, the writ petition is disposed of recording the

submission made by the learned Standing Counsel. The

petitioner shall strictly abide by the undertaking made by it

in paragraph 4 of the reply affidavit. In case, the petitioner

commits any default in carrying out the undertaking in

paragraph 4 of the reply affidavit, the respondents would be

free to proceed with the recovery. The question regarding

the claim of petitioner for penal interest can be considered by

the respondents depending upon further proceedings, at the WP(C).No.26549 OF 2020

appropriate time.

Sd/-

P.V.ASHA JUDGE

SPR WP(C).No.26549 OF 2020

APPENDIX PETITIONER'S/S EXHIBITS:

EXHIBIT P1 TRUE COPY OF SANCTION COMMUNICATION ISSUED BY K.F.C DATED 20.01.2015.

EXHIBIT P2 TRUE COPY OF CERTIFICATION FOR QUALITY MANAGEMENT SYSTEM BY BRITISH CERTIFICATIONS WITH I S O 9001-2015 DATED 24.03.2017.

EXHIBIT P3 TRUE COPY OF ENVIRONMENTAL MANAGEMENT SYSTEM BRITISH CERTIFICATIONS WITH I S O 14001:2015 DATED 24.03.2017.

EXHIBIT P4 TRUE COPY OF CERTIFICATE ISSUED FROM THE OFFICE OF THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE, MINISTRY OF COMMERCE AND INDUSTRY GOVT. OF INDIA DATED 12.11.2014.

EXHIBIT P5 TRUE COPY OF CERTIFICATION FROM MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISER (MSME) WITH NO.KL09C0001609 WITH COMMENCEMENT DATED 05.05.2017.

EXHIBIT P6 TRUE COPY OF ANNUAL PERFORMANCE REPORT FOR THE PETITIONER FIRM FOR THE PERIOD 2017-2018.

EXHIBIT P7 TRUE COPY OF THE PROVISIONAL STATEMENT OF ACCOUNTS IN LOAN NO.060446811 IS ISSUED BY K.F.C FOR THE PERIOD FROM 01.01.2015 TO 05.10.2017.

EXHIBIT P8 TRUE COPY OF THE PROVISIONAL STATEMENT OF ACCOUNTS IN LOAN NO.060446811 IS ISSUED BY K F C FOR THE PERIOD FROM 01.04.2018 TO 09.07.2020.

WP(C).No.26549 OF 2020

EXHIBIT P9 TRUE COPY OF THE PROVISIONAL STATEMENT FOR THE PERIOD FROM 01.04.2018 TO 09.07.2020 IN LOAN NO.060446810.

EXHIBIT P10 TRUE COPY OF THE SANCTION LETTER DATED 14.10.2019 BY THE CHIEF MANAGER FOR THE 2ND RESPONDENT.

EXHIBIT P11 TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER FIRM TO THE 2ND RESPONDENT'S MANAGER 23.08.2018.

EXHIBIT P12 TRUE COPY OF THE INTIMATION GIVEN BY THE PETITIONER TO THE 2ND RESPONDENT'S MANAGER DATED 23.09.2018.

EXHIBIT P13 TRUE COPY OF THE NOTICE DATED 11.11.2020 ISSUED ADDRESSED TO THE MANAGING DIRECTOR OF K I N F R A WITH A COPY TO KUNHABDULLA.

EXHIBIT P14 TRUE COPY OF THE EXPLANATION AND PROMISE LETTER DATED 19.11.2020 BY THE PETITIONER.

EXHIBIT P15 TRUE COPY OF THE NOTICE UNDER S.29 OF SFC'S ACT BY THE 2ND RESPONDENT.

EXHIBIT P16 TRUE COPY OF THE D.D NO.502/34 ICICI BANK LTD. DRAWN IN FAVOUR OF K.F.C LTD.DATED 15.02.2021.

RESPONDENT'S/S EXHIBITS: NIL.