Madras High Court
Indbank Housing Limited vs Happy Home Profin Ltd on 21 March, 2023
OSA.No.233/2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 21.03.2023
CORAM:
THE HONOURABLE MR.JUSTICE S.S.SUNDAR
AND
THE HONOURABLE MR. JUSTICE P.B.BALAJI
OSA.No.233/2012
Indbank Housing Limited
Chennai Branch
480, Anna Salai, Nanadanam
Chennai 600 035. .. Appellant
Vs.
1.Happy Home Profin Ltd
rep.by Official Liquidator.
2.Mr.M.Saravana
3.Mrs.S.Alagammal
4.Mr.B.Muthu
5.Shristi Estates and Investments [P] Ltd
66, West Church Road, Mylapore
Chennai -4, rep.by its Managing Director
V.Subbaiah .. Respondents
**R1 cause title substituted vide order
of Court dated 30.11.2011 made in MP.No.2/2011
in OSA.SR.70614/2016.
https://www.mhc.tn.gov.in/judis 1
OSA.No.233/2012
R5 impleaded vide order dated 24.01.2017
made in CMP.No.1/2013 in OSA.No.233/2012
Prayer:- Original Side Appeal filed under Order 36 Rule 9 of Original Side
Rules read with Clause 15 of the Letter Patent against the common decree
and judgment dated 05.12.2003 passed by a learned Single Judge in
CA.No.842/2002 in CP.No.454/2000 on the file of the Original Side of this
Court.
For Appellant : M/s.J.N.Preethi for
M/s.King & Patridge
For R1 : Mr.S.R.Sundar
For RR 2 to 5 : No appearance
JUDGMENT
[Judgment of the Court was delivered by S.S.SUNDAR, J.,]
(1) This appeal is directed against the order passed by a learned Single
Judge in Company Application in Comp.A.No.842/2002 in
CP.No.454/2000 in the matter of M/s. Happy Home Profin
Limited.
OSA.No.233/2012
(2) Brief facts that are necessary for the disposal of this Original Side
Appeal are as follows:-
(3) The appellant is a third party either to the proceedings in Company
Petition in CP.No.454/2000 or in the Company Application in
Comp.A.No.842/2002. The appellant known as IndBank Housing
Limited is a subsidiary of Indian Bank. The 1st respondent is a
Financial Institution which is engaged in advancing loan /
financing against properties. Respondents 2 and 3 appears to have
entered into an Agreement of Sale in respect of a flat developed by
the 5th respondent. It is admitted that the 5th respondent, a private
Developer constructed several flats by executing project conceived
by it with the financial assistance of the appellant. It is stated that
the entire project undertaken by the 5th respondent for development
was pursuant to a in respect of the lands under development
mortgage in favour of the appellant. Respondents 2 and 3 appears
to have approached the 5th respondent to buy a flat in the project
executed by the 5th respondent. They also approached the 1st
respondent for seeking financial assistance to purchase the
OSA.No.233/2012
property. It is admitted that respondents 2 and 3 availed a loan
from the 1st respondent and the said loan was secured by the
property which was purchased by respondents 2 and 3 from the 5th
respondent. The 4th respondent is a guarantor who has given
guarantee to the 1st respondent for the loan advanced to
respondents 2 and 3.
(4) CP.No.454/2000 was filed by one K.S.Raja for winding up of the
1st respondent Company. When the petition in CP.No.454/2000
was pending, the 1st respondent has filed Company Application in
Comp.A.No.842/2002 against respondents 2 to 4 herein praying for
issuing notice to respondents 2 to 4 to settle the entire dues to the
1st respondent Company amounting to Rs.16,22,763/- as on
30.06.2002 and for other consequential reliefs. The said
application was ordered by a learned Single Judge of this Court.
(5) For convenience, the operative portion of the impugned order dated
05.12.2003 passed by the learned Single Judge is extracted
hereunder:-
OSA.No.233/2012
''5.Hence, the following direction is issued. The
1st respondent in each of the application shall pay the
balance directly to the Official Liquidator with the
following schedule of payments:-
i. The 1st respondent in each of the application is
permitted to pay the above amount in three
equal monthly instalments.
ii. The 1st instalment of each transaction has to be
paid on or before 15.12.2003. The balance two
instalments have to be paid on or before 15th of
successive two months.
iii. The amount shall carry interest at the rate of
12% per annum. Penal interest at the rate of
15% per annum should be paid for any belated
payment.
iv. If the 1st respondent in each case commits any
default for two successive months, it is open to
the Official Liquidator to recover the entire
balance amount along with the interest and
penal interest as stated in Condition No.[iii].
6.At the request of the parties, the Ind Bank is
also hereby directed to grant necessary 'No Objection
Certificate' in respect of these two transactions.''
OSA.No.233/2012
(6) Aggrieved by the same, the appellants has preferred the above
Original Side Appeal.
(7) Learned counsel for the appellant submitted that the appellant was
not made as a party. Surprisingly, this Court has noticed that
neither the appellant nor the 5th respondent who has now been
impleaded as a party to this Appeal, was not a party before the
learned Single Judge. In the absence of the proper and necessary
parties, namely, the appellant and the 5th respondent, the learned
Single Judge has proceeded to dispose of the applications
unmindful of the legal consequences that may follow thereof.
(8) Learned counsel for the appellant submitted that the learned Single
Judge has erred in directing the appellant to grant No Objection
Certificate to the respondents even though the entire property as
such is mortgaged with the appellant and that the appellant is not
liable to release any property without receiving any money
corresponding to the security. Learned counsel also submitted that
the learned Single Judge has travelled beyond the scope of the
proceedings and has directed the appellant to issue No Objection
OSA.No.233/2012
Certificate without even a prayer in the application and without
hearing the appellant and the same is against the principles of
natural justice apart from being arbitrary and irrational. It is true
that the order impugned reads as if the Court heard the submission
of a the learned counsel for the appellant. But it is admitted that
the appellant is neither a party nor heard before the learned Single
Judge.
(9) This Court is of the firm view that the order of the learned Single
Judge is liable to be set aside. The learned counsel appearing for
the Official Liquidator pointed out that the application was filed at
the instance of the Administrator and thereafter, he was discharged
and the Official Liquidator has been appointed by orders of Court.
The learned counsel further stated that at the time of hearing,
Mr.P.L.Narayanan, learned counsel for respondents 2 to 4
submitted that respondents 2 to 4 came forward to settle the dues.
It is the grievance of the learned counsel appearing for the Official
Liquidator that respondents 2 to 4 have not paid any amount
thereafter and therefore, the 1st respondent is now unable to recover
OSA.No.233/2012
the amount from the borrowers.
(10) This Court is not concerned with the grievance of the 1st respondent
for the moment in this appeal as the appeal is directed against the
order affecting the security interest of the appellant without even
impleading the appellant or hearing the appellant before the order
is passed.
(11) Therefore, the above Original Side Appeal is allowed and the
impugned order dated 05.12.2003 passed by the learned Single
Judge in CA.No.842/2002 in CP.No.454/2000 is set aside.
(12) This Court is of the view that the 1st respondent is supposed to
know that the entire project undertaken by the 5th respondent herein
is by availing financial assistance from the appellant by mortgaging
the property and therefore, the appellant is entitled to hold the
property as security till the entire loan is fully discharged.
(13) While giving liberty to the appellant to initiate appropriate
proceedings against the 5th respondent, this Court also reserves the
right of the Official Liquidator to implead the appellant and the 5th
respondent as party to the company application in
OSA.No.233/2012
Comp.A.No.1146/2005 and proceed against the borrowers in the
presence of the proper and necessary parties including the appellant
and the 5th respondent. No costs.
[SSSRJ] [PBBJ]
21.03.2023
AP
Internet : Yes
OSA.No.233/2012
S.S.SUNDAR, J.,
AND
P.B.BALAJI, J.
AP
OSA.No.233/2012
21.03.2023
https://www.mhc.tn.gov.in/judis 10
