R.P. No. 979/2022 in W.A. No. 242 of 2020, High Court of Kerala

## R.P. No. 979/2022 : 1 : IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY WEDNESDAY, THE 5[TH] DAY OF APRIL 2023 / 15TH CHAITHRA, 1945 ## RP NO. 979 OF 2022 AGAINST THE JUDGMENT DATED 06.10.2022 IN WA 242/2020 OF HIGH COURT OF KERALA ## REVIEW PETITIONERS/RESPONDENTS 1 TO 3 IN THE WRIT APPEAL/WRIT PETITIONERS: - 1 R.DHANALAKSHMI PROPRIETRIX, M/S SEEMATTTI TEXTILES, REPRESENTED BY POWER OF ATTORNEY HOLDER, R.ANANTHAKUMAR, DHANAMS, CURZON ROAD, KOLLAM, NOW AT HOUSE NO.49/762,ARAYACHAM VEEDU, KOTTAMUKKU, CUTCHERRY.P.O,KOLLAM, PIN-691 013. - 2 R.VEERESH KUMAR, DHANAMS,CURZON ROAD, KOLLAM, NOW AT HOUSE NO.49/762,ARAYACHAM VEEDU, KOTTAMUKKU, CUTCHERRY.P.O,KOLLAM, PIN-691 013. - 3 R.ANANTHAKUMAR, DHANAMS,CURZON ROAD, KOLLAM, NOW AT HOUSE NO.49/762,ARAYACHAM VEEDU, KOTTAMUKKU, CUTCHERRY.P.O, KOLLAM, PIN-691 013. BY ADV S.EASWARAN ## RESPONDENTS/APPELLANTS 1 & 2/RESPONDENTS 4 TO 7 IN THE WRIT APPEAL: - 1 THE SENIOR MANAGER, UNION BANK OF INDIA UNION BANK OF INDIA, KOLLAM BRANCH, FATHIMA BUILDING, P.B.NO.182, BEACH ROAD, KOLLAM-691 001. - 2 THE AUTHORISED OFFICER, UNION BANK OF INDIA, REGIONAL OFFICE, UNION BANK BHAVAN, POST BOX NO.307,M.G.ROAD, STATUE,THIRUVANANTHAPURAM695 001. - 3 DR.MUMTHAS CHANDRALAYAM, MCRA77, NELLIMUKKU, KOLLAM-12 REPRESENTED BY POA HOLDER M.SHAHID AHMED, AVOCADO, CHANDRALAYAM,MCRA77, KOLLAM 12, ALSO AT HOUSE NO.99, CURZON NAGAR, CURZON ROAD, KOLLAM-691 013. ## R.P. No. 979/2022 : 2 : - 4 M.SHAHID AHMED, CHANDRALAYAM, NELLIMUKKU, KOLLAM 12, ALSO AT HOUSE NO.99, CURZON NAGAR, CURZON ROAD, KOLLAM-691 013. - 5 RAJAMMAL, CHANDRALAYAM, NELLIMUKKU, KOLLAM-691 013. - 6 DEBTS RECOVERY APPELLATE TRIBUNAL 4TH FLOOR, INDIAN BANK CIRCLE OFFICE 55, ETHIRAJ SALAI, CHENNAI-600 008. R1 & R2 BY ADV SRI.A.S.P.KURUP (B/O) THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 05.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## R.P. No. 979/2022 : 3 : ## **S. MANIKUMAR, CJ & SHAJI P. CHALY, J.** --------------------------------------------------------R.P. No. 979 of 2022 in W.A No. 242 of 2020 --------------------------------------------------------Dated this the 5[th] day of April, 2023. ## **ORDER** ## **SHAJI P. CHALY, J.** Respondent Nos. 1 to 3 in the writ appeal have preferred this Review Petition seeking to review the judgment dated 06.10.2022 in W.A. No. 233 of 2020 to the limited extent of directing the Debt Recovery Appellate Tribunal, to take into consideration an amount of Rs.3 Crores received by the Union Bank of India—respondent Nos. 1 and 2 out of the encashment of the bank guarantee submitted by the Review Petitioners, for the purpose of calculating the pre- deposit amount to validate the appeal. 2. According to the Review Petitioners, going by the dictum laid down by the Supreme Court in _**Kotak Mahindra Bank Ltd. v. Ambuj. A. Kasliwal and others**_ [(2021) 3 SCC 549], the Review Petitioners are entitled to have the said amount adjusted towards the debt due for the purpose of calculating the amount required for the pre-deposit. 3. In fact, the appeal filed by respondent Nos. 1 and 2 herein R.P. No. 979/2022 : 4 : was allowed holding that the debt due in a notice issued under Section 13(2) of SARFAESI Act, 2002 would include the interest claimed by the financial institution also, and therefore, the calculation of the amount by the DRAT taking into account the interest claimed for pre- deposit was found to be in accordance with law. 4. In the Review Petition, the contention raised by the petitioners is that a bank guarantee is given for Rs.3 crores and pending consideration of the application before the DRAT, the Review Petitioners have given consent to the respondent Bank for invoking the bank guarantee and appropriating the amounts received out of the bank guarantee. It is further submitted that the said request was accepted by the Debts Recovery Tribunal-II, Ernakulam by order dated 21.03.2021 and accordingly, the respondent Bank on 23.03.2021 requested the South Indian Bank Limited, Kottayam Branch for the encashment of the bank guarantee, evident from Annexure A1 dated 23.03.2021. 5. Therefore, the submission of the Review Petitioners is that based on Annexure A1 communication dated 23.03.2021, the respondent Bank has received an amount of Rs. 3 Crores and the said amount is appropriated and therefore, in fairness of the law, the Review Petitioners are entitled to seek adjustment of the said R.P. No. 979/2022 : 5 : amount from the amount ordered by the DRAT, Chennai as predeposit. That apart, relying upon the judgment in _**Kotak Mahindra Bank Ltd.**_ (supra), it is contended that the subsequent payments made by the borrowers can be adjusted towards debt due for the purpose of calculating the pre-deposit and therefore, they seek modification of the judgment directing the DRAT to consider the amount of Rs.3 crores for the purpose of calculating the pre-deposit amount. 6. On the other hand, the respondent Bank has filed a detailed counter affidavit objecting to the modification of the judgment sought for by the Review Petitioners and inter alia contending that in O.A. No. 56 of 2008 (TA 1412 of 2016), which was filed by the bank seeking to realise the balance amount due from the Review Petitioners on account of the amount outstanding after the sale of property through secularization proceedings, the Bank had moved an I.A for attachment of the property which was allowed on the basis of the I.A. No. 242 of 2008 and it is seeking to lift the order of attachment that the Bank guarantee for Rs.3 crores was produced by the petitioners. 7. It is also stated therein that, thereafter the respondent Bank has filed I.A. No. 260 of 2021 in T.A. No. 1412 of 2016 seeking to invoke the bank guarantee and appropriate the amounts R.P. No. 979/2022 : 6 : to the loan account. Based on the orders of the Tribunal, the amount was appropriated pending disposal of the application before the Debts Recovery Tribunal-II, Ernakulam. The said order was sought to be placed on record by the Review Petitioners by filing I.A.No. 2 of 2022 in the Review Petition, which is produced as Annexure R1A. 8. It is further stated that the said application was later dismissed by this Court while the writ appeal was under consideration. It is also pointed out that apart from the said aspect, third parties have also raised a claim against the amount of Rs.3 crores and they had also filed Annexure R1B impleading petition in W.A. No. 300 of 2020. Therefore, it is submitted that the review sought for by the petitioners cannot be sustained under law. 9. We have heard the learned counsel for the petitioners Sri. S. Easwaran, and Sri. A.S.P. Kurup and Sri. Sadchith Kurup for the respondent Bank, and perused the pleadings and material on record. 10. It is an admitted fact that in the writ petitions filed by the Review Petitioners, leading to the writ appeal, the said issue was not raised. Anyhow, the submission made by the learned counsel for the Review Petitioners is that this issue was raised by the Review Petitioners when the writ appeal was heard. Whatever that R.P. No. 979/2022 : 7 : be, from the counter affidavit filed by the respondents in the Review Petition, it is categoric and clear that the Debt Recovery Tribunal-II, Ernakulam, has passed an order dated 05.03.2021 in I.A.No. 260 of 2021 in T.A. No. 1412 of 2016 directing the Bank to invoke the bank guarantee and also to appropriate the proceeds into the loan account of the borrowers, subject to the final decision in the O.A. 11. Therefore, in our considered opinion, since the application is still pending before the Debt Recovery Tribunal and the appropriation of the amount is made subject to the final decision in the application pending before the Debt Recovery Tribunal, we are of the view that the said amount cannot be said to be a final figure for the purpose of appropriation of the amounts towards the debt amount due from the Review Petitioners. It is well settled in law that a review needs to be entertained by the court only if there is error apparent on the face of the record or any other legal infirmities so as to justify review of the judgment. 12. As pointed out above, it was never a subject matter of consideration in the writ petition leading to the writ appeal in question; and even if such an argument was made by the Review Petitioners when the appeal was heard, in view of the peculiar nature of the order passed by the Debt Recovery Tribunal in the aforesaid I.A, permitting the Bank to appropriate the amounts R.P. No. 979/2022 ## : 8 : subject to the final orders to be passed in the application pending before the Debt Recovery Tribunal, it will not legally correct to say that the amount in question is liable for such an adjustment. Therefore, It cannot, at this point of time, be held to be a final figure for adjustment towards the debt due from the Review Petitioners. 13. In that view of the matter, we are of the considered opinion that the Review Petitioners are not entitled to secure any modification or review of the judgment. Needless to say, the Review Petition fails and accordingly, it is dismissed. However, I make it clear that the reliefs sought for by the petitioners for adjustment of the amount appropriated by invoking the bank guarantee would depend upon the orders to be passed by the Debt Recovery Tribunal in the pending application before it. sd/- **S. MANIKUMAR, CHIEF JUSTICE.** sd/- **SHAJI P. CHALY, JUDGE.** **Rv**