L. P. Shashi Kumar v. Industrial Development Bank of India Ltd.

Case Details & Bench

Court: High Court
Hon'ble Judges: Dr. A. R. Lakshmanan
Altamas Kabir
Judgment Date: 2007-02-08
Court Decision / Holding: In view of the payment made towards full and final settlement, the IDBI is directed to release the securities to Goldstone Technologies Ltd. forthwith. The bank is further directed to withdraw its writ petition pending in the High Court, and the appellant is directed to withdraw his case before the AP State Consumer Disputes Redressal Commission. The depositions already made are recognized as part of the final settlement, and the appeal stands disposed of with no costs.
Final Disposition: Appeal disposed of. No costs.

Parties to the Case

Appellants / Petitioners

L. P. Shashi Kumar

Respondents

Industrial Development Bank of India Ltd.

Legal Representation & Advocates

Counsels for Petitioners

• G. Bikshapathy

Counsels for Respondents

• Sanjay Bhatt
• Amit Kumar

Case Synopsis & Summary

This Supreme Court appeal arises from orders of the Andhra Pradesh High Court and the Andhra Pradesh State Consumer Disputes Redressal Commission concerning release of securities following a full and final settlement between Goldstone Technologies Ltd. (represented via guarantor) and the Industrial Development Bank of India (IDBI). The respondent bank directed the release of security to the appellant; however, the AP State Consumer Disputes Redressal Commission’s order was stayed by the High Court. During the course of proceedings, the Court had earlier allowed the principal debtor or guarantor to deposit money with the bank so that the Court could consider the return of share certificates and title documents. The guarantor subsequently deposited Rs. 54,22,237 in compliance with the Court’s interim directions, in addition to an earlier sum deposited by the guarantor. By the final communications, the bank acknowledged the settlement and directed release of all pledged assets to Goldstone Technologies Ltd., as well as the release of charges and titles. The Court held that the full and final settlement extinguished the bank’s claim, directing the IDBI to release the securities forthwith, withdraw the writ petition before the High Court, and require the appellant to withdraw the case before the State Commission. The appeal is disposed of with no costs, clarifying that no further proceedings are warranted.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that after payment towards full and final settlement, all dues liability to IDBI is extinguished. The bank’s obligation now is to release all securities and charges, including title documents, and to withdraw any pending proceedings, including the writ petition in the High Court and the case before the AP State Consumer Disputes Redressal Commission. The final settlement, evidenced by deposits and letters of settlement, leaves nothing further to be pursued by the bank.

Contentions of Respondents

IDBI’s counsel maintains that once a full and final settlement is effected and the deposits are received, the bank is entitled to release the securities and discharge charges. The bank moves to secure the formal withdrawal of ongoing proceedings in the High Court and the Consumer Disputes Redressal Commission, and to ensure a clean end to the dispute, consistent with the final settlement between the parties.

Extracted Judgment Text

Exact text extracted from official judgment records.

"'i F 1 ## L.P. SHASHI KUMAR _v._ # INDUSTRIAL DEV. BANK OF INDIA LTD. FEBRUARY 8, 2007 .. _'i_ -~ ~ [DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.] ## _Banks/Banking:_ > _Release of securities-Held, in view of payment made by appellant_ c _towards full and final settlement of dues of respondent-Bank, said bank would release the securities-Parties would withdraw their respective cases pending before the High Court and the State Consumer Disputes Redressal Commission._ > Respondent no. I-bank approached the High Court against the order of D the A.P. State Consumer Disputes Redressal Commission directing release of security to the appellant. The High Court stayed operation of the order of the Commission. In the special leave petition filed by the appellant, the Supreme Court while issuing notice granted liberty to the principal debtor > or the guarantor to deposit the money with the bank so that the Court could E consider the prayer for return of share certificates and title documents. Pursuant to the said order the guarantor deposited the money with respondent no.1. ## Disposing of the appeal, the Court > .... _-1._ HELD: In view of the payment made by the appellant towards full and final settlement of the dues of IDBI, the said bank is directed to release the securities to respondent no.3 forthwith. Nothing further survives for the bank to pursue the writ petition filed by it before the High Court. Therefore, the bank is directed to withdraw the said writ petition. Likewise, the appellant is G also directed to withdraw the case filed by him before the A.P. State Consumer Disputes Redressal Commission immediately. [Para 6] [383-A-B] CIVIL APPELLATE JURISDICTION: Civil Appeal No. 644 of2007. H 379 380 SUPREME COURT REPORTS [2007] 2 S.C.R. A From the Final Judgment/Order dated 27.4.2006 of the High Court of Andhra Pradesh at Hyderabad in W.P. -:-.lo. 795112006 and W.P.M.P. No. 10172/ 2006 in W.P. No. 795112006. G. Bikshapathy, T. Anamika and A. Chandra Mohan for the Appellant. **B** Sanjay Bhatt and Amit Kumar for the Respondents. The Judgment of the Court was delivered by c **D** E **DR. AR. LAKSHMANAN, J.** I. Leave granted. 2. Heard Mr .G. Bikshapathy, learned seni"r counsel appearing on behalf of the appellant and Mr.San jay Bhatt, learned counsel appearing on behalf of the contesting respondent No. I (Industrial Dev. Bank of India Ltd.). 3. This appeal was filed against the o~der passed by the Higl1 Court of Andhra Pradesh dt.27.04.2006 in W.P.No.7951 of2006 and W.P.l\f P.No.10172 of 2006. The High Court was approached by the first respondent herein against the direction given by the A.P.State Consumer Disputes Redressal Commission directing release of security to the appellant herein. The High Court stayed the operation of the order dt.06.04.2006 passed by the A.P.State Consumer Disputes Redressal Commission, Hyderabad in CDIA No.33/2006 (CD No. l/2006). When the matter came up for admission before this Court on 19 .06.2006, this Court passed the following Order :- )' ~ ;. "Issue notice returnable within six weeks. F G **H** "In the meanwhile, the operation of the impugned order passed by the High Court in WPMP No. _1017212006_ in WP No.7951/2006 dt.27 .04.2006 shall remain stayed. "In the meantime, either the principal debtor or the guarantor are at liberty to deposit the money with the bank so that this Court may consider the prayer for return of share certificates and title documents to the petitioner-guarantor. This direction is issued since the GTL is ready to pay the outstanding principal amount of Rs.4.80 crores along with 9% interest per annum from December, 2003." 4. By Order dt.31.10.2006, the main Special Leave Petition itself was directed to be listed for final hearing. Today, when the matter is taken up for LP. SHA SHI KUMAR _v._ INDUSTRIAL DEV. BANK OF INDIA LTD. [LAKSHMANAN,l) 3 8 J ''i hearing, learned senior counsel appearing on behalf of the appellant placed ·A before us a communication dt.O 1.02.2007 addressed to the Deputy General Manager, Industrial Development Bank oflndia Limited, Huderabad. The said communication reads thus :- "Date: 01-02-2007 B ## To The Deputy General Manager, Industrial Development Bank of India Limited, Main Branch, Hyderabad - 500 00 I c Dear Sir, Sub:- Full and Final settlement of Term Loan of Rs. I 000 lacs. Ref:-1) Our Term Loan account GOLTOIOl 100, GOLTOIOl 101 and D GOLTOIOl 102 1 -4 _·-f_ :. (2) Your letter bearing no.IDBI(H)No.5278/CFD(GTL) With reference to the above cited-subject, please find enclosed Cheque bearing no.672421 for Rs.54,22,237.00, drawn on _Mis_ UCO Bank, Abid E Circle Branch, towards full and final settlement of Term Loan referred in (I) above. We request yourselves to acknowledge the receipt of the above said payment, issue Jetter towards full and final settlement of the said Term loan and release all charges created on the assets of our company, F personal guarantees executed by the management of our company in favour of IDBI, release pledge of 15,00,000 equity shares of Goldstone Technologies Ltd., held by Goldstone Exports Ltd. and any other securities/sureties executed in this regard. Thanking you G Yours truly, For Goldstone Technologies Ltd. Sd/- D.P. Sreenivas Executive Director" H 382 SUPREME COURT REPORTS (2007] 2 S.C.R. A 5. The learned senior counsel for the appellant has also placed before us a communication by way of reply to the communication dt.01.02.2007 sent to the Managing Director, Goldstone Technologies Ltd .. The said letter reads thus :- _y_ ## "IDBI(H) No. /CFD(GTL) February 3, 2007 B The Managing Director, Goldstone Technologies Ltd., Amarchand Shanna Complex, c S.D.Road, Secunderabad - 500 003. :.-- ## Dear Sir, ## _Rupee term loan of Rs.1000 lakh-Settlement of dues_ Please refer to your letter dated February 1, 2007 forwarding a D cheque for Rs.54,22,23 7 /- (Rupees fifty four lakh twenty two thousand two hundred thirty seven only) towards full and final settlement of dues of IDBI. In this connection, we advise that on receipt of the aforesaid payment, there are no dues from the company to IDBI and the term loan account of Rs. I 000 lakh stands fully repaid. We, therefore, E advise you to arrange to withdraw the cases pending before the A.P.State Consumer Disputes Redressal Commission, Hyderabad and Hon'ble Supreme Court oflndia to enable us to release the securities etc. at the earliest. ..I ,__ Yours faithfully, ## F Sci/(V.V.Rao) Dy.General Manager" 6. It is thus seen that in compliance of the Order of this Court dt.19.06.2006, G the guarantor deposited the money with the first respondent. Since the sum of Rs.54,22,237/- (Rupees fifty four lakh twenty two thousand two hundred thirty seven only) has been paid by the appellant to the first respondent bank towards full and final settlement of the dues of IDBI, the IDBI has requested the appellant herein to withdraw the cases pending before the A.P.State H[Consumer ][Disputes ][Redressal ][Commission, ][Hyderabad ][and ][in ][this ][Court ][to ] _y_ .. ## _r_ L.P. SHA SHI KUMARi' INDUSTRIAL DEY. BANK OF INDIA LTD. [I..~KSHM/\NAN . .J.] 383 "' enable them to release the securities at the earliest. In view of the payment A of Rs.54,22.237/- made by the appellant towards full and final settlement of the dues of IDBI, the said bank is ·directed to release the securities to respondent No.3 (Goldstone Technologies Ltd.) forthwith. In view of the final payment now received by IDBI, there is nothing further survives for the bank to pursue the Writ Petition No.7951/2006 tiled by them before the High Court. B Therefore. the IDBI is directed to withdraw the said Writ Petition from the High Court. Likewise, the appellant is also directed to withdraw the case tiled by him before the A.P.State Consumer Disputes Redressal Commission, Hyderabad immediately. The zerox copies of the letter dt.01.02.2007 and 03.02.2007 are placed on record and will form part of this Order. c 7. We make it clear that the deposit of sum of Rs.54,22,237/- now made by the appellant is in addition to the sum of Rs.89,96,636/- deposited by the guarantor pursuant to our interim order dt.19.06.2006 in full and final settlement of the bank dues. 8. The appeal stands disposed of accordingly. No costs. D R.P. Appeal disposed of.