Fl Exports vs The South Indian Bank
2022 Latest Caselaw 9247 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
                THE HONOURABLE MR. JUSTICE GOPINATH P.
    WEDNESDAY, THE 10TH DAY OF AUGUST 2022 / 19TH SRAVANA, 1944
                       WP(C) NO. 22897 OF 2021
PETITIONERS:

    1     FL EXPORTS
          REPRESENTED BY ITS PROPRIETOR, MR. BASHEER MOHAMMED
          PERUMBULLY, XX/382 TO 385, PAKKULAM THAVVALAM,
          ATTAPADI, MANNARKKAD, PALAKKAD - 678 589, RESIDING AT
          PERUMUPULLIYIL, THENKARA P. O., MANNARKKAD, PALAKKAD -
          678 582.

    2     BASHEER MOHAMMED PERUMBULLY
          AGED 43 YEARS
          S/O. MUHAMMED, PROPRIETOR, M/S FL EXPRTS, RESIDING AT
          PERUMUPULLIYIL, THENKARA P. O., MANNARKKAD, PALAKKAD -
          678 582.

    3     ASEENA BASHEER
          AGED 40 YEARS
          W/O. BASHEER M. P., RESIDING AT PERUMUPULLIYIL,
          THENKARA P. O., MANNARKKAD, PALAKKAD - 678 582.

    4     HAMSA
          AGED 60 YEARS
          S/O. SAIDALI, ALINGAL HOUSE, CHIRATTAKULAM,
          EDATHANATTUKARA, PALAKKAD - 678 601.

    5     MARIYA
          AGED 57 YEARS
          W/O. HAMSA, ALINGAL HOUSE, CHIRATTAKULAM,
          EDATHANATTUKARA, PALAKKAD - 678 601.

    6     HAFSATH SALAM
          AGED 33 YEARS
          W/O. SALAM, PERUMUPULLIYIL HOUSE, TRIKALLUR P. O.,
          MANNARKKAD, PALAKKAD - 678 593.

          BY ADVS.
          K.S.BHARATHAN
          ALPHIN ANTONY
          AADITHYAN S.MANNALI
          VISAKH ANTONY
          ABEL ANTONY
          CHRISTINE MATHEW
 W.P (C) No.22897/2021              -2-



RESPONDENTS:

      1       THE SOUTH INDIAN BANK
              REGIONAL OFFICE, PALAKKAD, FIRST FLOOR, D & D ARCADE,
              CHITTUR ROAD, MANAPULLIKAVU, KUNNATHURMEDU P. O.,
              PALAKKAD - 678 013, REPRESENTED BY ITS CHIEF MANAGER.

      2       ECGC LTD.
              FORMERLY KNOWN AS EXPORT CREDIT GUARANTEE CORPORATION
              INDIA LIMITED, HDFC HOUSE, 2ND FLOOR, RAVIPURAM JN., M.
              G. ROAD, KOCHI - 682 015, REPRESENTED BY ITS BRANCH
              MANAGER.

      3       THE MINISTRY OF COMMERCE & INDUSTRY
              REPRESENTED BY ITS JOINT SECRETARY, UDYOG BHAWAN, NEW
              DELHI - 110 011.

             BY ADVS.
             SUNIL SHANKER
             MATHEW B. KURIAN
             KARTHIK S.A., CGC
             VIDYA GANGADHARAN
             K.T.THOMAS




      THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
10.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 W.P (C) No.22897/2021                    -3-

                                 JUDGMENT

The petitioners have approached this Court being aggrieved by the fact that

the proceedings initiated to recover the amounts due under pre-shipment and post-

shipment facilities availed by the petitioner from the respondent bank. The learned

counsel for the petitioner states that the bank has illegally proceeded when recovery

proceedings notwithstanding the fact that it was entitled to receive substantial

amounts under the ECGC scheme from the 2 nd respondent corporation. It is

submitted that the bank had already submitted a claim to the ECGC of the amounts

payable under the scheme and after the filing of the writ petition certain amounts

have already been released by ECGC to the bank. It is submitted that taking into

consideration the provisions of Ext.R1 (a), the recovery proceedings by the bank can

only be initiated after the amount is disbursed by the ECGC. It is submitted that in

the facts of the present case the recovery proceedings were initiated much before

the claim of the bank released by the ECGC.

2. The learned counsel appearing for the respondent bank and the learned

counsel appearing for the 2nd respondent corporation states that the contention

taken by the learned counsel for the petitioner is not tenable. It is submitted that

the ECGC scheme covers the risk taken by the 1 st respondent bank and does not

reduce the liability of the petitioner in any manner. It is submitted that even if

amounts are disbursed by the 2 nd respondent corporation under the ECGC scheme,

the liability of the bank to recover the entire amounts due from the petitioner

continues. It is submitted that the provisions of the scheme make it clear that the

bank must proceed to recover the entire amounts from the borrower and make over

the amounts paid by ECGC in the proportion of recovery. It is submitted that the

petitioner is therefore not entitled to contend that recovery proceedings by the 1 st

respondent bank should have been initiated and continued only after the payment

made by the ECGC.

3. I have considered the contentions raised and also gone through the

provisions of Ext.R1 (a) which is the covering letter issued by the ECGC to the 1 st

respondent bank regarding renewal of export credit insurance for banks under the

whole turnover banking credit scheme. It is clear from the reading of Clause 14 of

Ext.R1 (a) that there is nothing in Ext.R1 (a) to suggest that the recovery

proceedings by the bank must await disbursal of the amounts payable by ECGC

under the scheme. The provisions of Clause 14 clearly indicate that the

responsibility of the bank to recover the amounts due from the borrower continues

notwithstanding the disbursal of any amount by ECGC. It is also clear from a

reading of Ext.R1 (a) that on amount being recovered certain amounts are also to be

paid over to the ECGC in proportion to the recovery made. I therefore find that

there is no merit in the contention taken by the learned counsel of the petitioners

that the recovery proceedings initiated even prior to the disbursal of amounts by

ECGC must held to be bad. No other point has been raised. In the light of the above

finding, the petitioner is clearly not entitled to any relief in the present writ petition

and it is accordingly dismissed.

Sd/-

GOPINATH P.

JUDGE AMG

APPENDIX OF WP(C) 22897/2021

PETITIONER EXHIBITS

Exhibit P1 TRUE COPY OF THE STATEMENT OF ACCOUNTS DATED 28.02.2019 SHOWING THE DEBIT OF AMOUNTS TOWARDS PREMIUM OF ECGC ALONG WITH A CONSOLIDATED EXCEL SHEET OF DEBIT.

Exhibit P2 TRUE COPY OF THE NOTICE DATED 11.06.2021 FROM THE 1ST RESPONDENT ISSUED UNDER SECTION 13(2) OF THE SARFAESI ACT, 2002.

Exhibit P3 TRUE COPY OF THE POSSESSION NOTICE DATED 21.10.2021 ISSUED UNDER RULE 8(1) OF THE SECURITY INTEREST (ENFORCEMENT) RULES, 2002.