Sky High Motors Pvt Ltd v. The South Indian Bank and Phoenix Arc Pvt Ltd (acting in its capacity as Trustee of Phoenix Trust FY-17-8)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **TUESDAY ,THE 12TH DAY OF FEBRUARY 2019 / 23RD MAGHA, 1940** ## **WP(C).No. 4019 of 2019** ## **PETITIONER:** **SKY HIGH MOTORS PVT LTD, DOOR NO.V/413, OPP.MANAZHI NAGAR COLONY ROAD, MANATHUMANGALAM, PERINTHALMANNA, MALAPPURAM DISTRICT, PIN.679322 REPRESENTED BY CHAIRMAN/DIRECTOR, MADHAVAN UNNI THALAPPIL, AGED 52 YEARS, S/O. MADHAVAN NAIR, KALLAMKUTHU HOUSE, NEDIYIRIIPU P.O, MALAPPUAM DISTRICT, PIN.673638.** **BY ADVS. SRI.V.SETHUNATH SRI.V.R.MANORANJAN (MUVATTUPUZHA)** ## **RESPONDENTS:** |**NTS:**|| |---|---| |**1**|**THE SOUTH INDIAN BANK,**| ||**REPRESENTED BY ITS REGIONAL MANAGER, KOZHIKODE REGIONAL**| ||**OFFICE, HAPPY TOWERS, VAIKOM MUHAMMED BASHEER ROAD, MANACHIRA**| ||**P.O, KOZHIKODE, PIN-673001.**| |**2**|**PHOENIX ARC,**| ||**PVT.LTD(ACTING IN ITS CAPACITY OF TRUSTEE OF PHOENIX TRUST**| ||**FY-17-8) DANI CORPORATE PARK, 5TH FLOOR, 158, C.S.T. ROAD,**| ||**KALINA, SANTACRUZ(E), MUMBAI-400098.**| ## **OTHER PRESENT:** ## **SRI.N.SASI-SC, SRI.GEORGE VARGHESE-SC** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 4019 of 2019** **2** ## **J U D G M E N T** The petitioner, which is stated to be a Company incorporated under the Provisions of the Companies Act, 1956, impugns the measures taken by the respondents under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for brevity). 2. However, going by the judgment of the Hon'ble Supreme Court in **Union Bank of India v. Satyawati Tondon** ((2010) 8 SCC 110) and followed recently in **Authorised Officer, SBT v. Mathew** (ILR 2018 (1) Ker. 479), the jurisdiction of this Court in dealing with this challenge is extremely limited, since the petitioner concededly has alternative efficacious statutory remedies available to it. 3. When I made my mind clear as afore at the Bar, the learned counsel for the petitioner, Sri.V.Sethunath, confined his prayer that the respondents be directed to give his client the benefit of a One Time Settlement as per any applicable Scheme or guidelines presently available for such purpose. He says that his client will approach the respondents with a **WP(C).No. 4019 of 2019** **3** request for settlement, but asserts that, as is clear from Ext.P10, the debt in question has been assigned by the 1[st] respondent Bank to the 2[nd] respondent - Asset Reconstruction Company for an amount of Rs.16,55,36,000/- only on 17.03.2017 and he says therefore, that his client is willing to pay this amount along with applicable interest in full settlement. 4. The learned standing counsel appearing for the 1[st] respondent Bank, Sri.George Varghese, submits that the decision with respect to a One Time Settlement in the case of the petitioner will have to be taken by the 2[nd] respondent company since, his client has already assigned the debt to them. He says that, therefore, the 1[st] respondent Bank has no further role to play in this matter. 5. Sri.N.Sasi, the learned counsel appearing for the 2[nd] respondent - Asset Reconstruction Company, assails the submissions made by Sri.Sethunath that the debt has been assigned to them by the 1[st] respondent for only about Rs.16.5 Crores and he asserts that there are other underlining arrangements between the Bank and the Company with respect to such assignment. He, however, says that if the **WP(C).No. 4019 of 2019** **4** petitioner makes a request for a One Time Settlement within a period of a few days from today, they are willing to consider it in terms of law, after affording an opportunity of being heard to them. He adds that his client has now scheduled the taking over of physical possession of certain items of the secured asset on 13.02.2019 and therefore, that this Court fix a short time frame within which, the petitioner will make payment, in the event they are given benefits under One Time Settlement. 6. Sri.V.Sethunath, the learned counsel appearing for the petitioner says that his client will accept the offer now made by Sri.N.Sasi and prays that this writ petition be ordered on such terms. 7. In the afore circumstances, I order this writ petition and grant liberty to the petitioner to approach the 2[nd] respondent - Asset Reconstruction Company, with an appropriate offer for settlement, within a period of four days from the date of receipt of a copy of this judgment; in which event, the said company will consider that request and decide on it, after affording an opportunity of being heard to the Authorized representative of the petitioner company and thereafter, will communicate the resultant order to them **WP(C).No. 4019 of 2019** **5** within a period of two weeks. 8. Until such time as the exercise as ordered in this judgment is completed by the 2[nd] respondent, all action now being pursued by them under the SARFAESI Act shall stand deferred, so that in the event a settlement fructifies, then the petitioner can pay such amounts and have the loan closed honourably. 9. I clarify that if, on the contrary, the petitioner does not approach the Bank within a period of four days from the date of receipt of a copy of this judgment as ordered, or if he does not make payment of the amount to be fixed by the Bank for settlement, if it is so allowed, within the time granted by them, the Bank will then be at liberty to take further action under the SARFAESI Act as per law, from the stage at which it is available as on today. This writ petition is thus ordered. ## **Sd/-** ## **DEVAN RAMACHANDRAN** ## **JUDGE** rp-12.02 **WP(C).No. 4019 of 2019** **6** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE DETAILS OF THE COMPANY FILED WITH THE REGISTRAR OF COMPANIES. EXHIBIT P2 THE TRUE COPY OF THE LOAN ACCOUNT DETAILS AND INTEREST PAID FROM 2009 TO 2016 TO THE SOUTH INDIAN BANK AS PER AUDITED BALANCE SHEET.** **EXHIBIT P3 THE TRUE COPY OF THE LETTER OF RENEWAL FOR CONTINUANCE OF CCOL FACILITY ISSUED BY THE 1ST RESPONDENT ON 19-03-2013.** **EXHIBIT P4 THE TRUE COPY OF THE CREDIT SANCTION ADVICE ISSUED BY THE PERINTHALMANNA BRANCH, IN THE YEAR 2014.** |**EXHIBIT P5**||**THE TRUE COPY OF THE CREDIT SANCTION ADVICE**| |---|---|---| |||**ISSUED BY THE PERINTHALMANNA BRANCH, IN THE YEAR**| |||**2016.**| |**EXHIBIT P6**|**A**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2009.**| |**EXHIBIT P6**|**B**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2010.**| |**EXHIBIT P6**|**C**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2011.**| |**EXHIBIT P6**|**D**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2012**| |**EXHIBIT P6**|**E**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2013.**| |**EXHIBIT P6**|**F**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2014.**| |**EXHIBIT P6**|**G**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2015.**| |**EXHIBIT P6**|**H**|**THE TRUE COPY OF THE AUDITED BALANCE SHEET OF THE**| |||**PETITIONER COMPANY AS ON 31-3-2016.**| |**EXHIBIT P7**||**TRUE COPY OF THE POSSESSION NOTICE DATED 10-8-**| |||**2016.**| **WP(C).No. 4019 of 2019** **7** **EXHIBIT P8 THE TRUE COPY OF THE PAPER PUBLICATION DATED 2012-2016.** **EXHIBIT P9 THE TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 20-03-2017.** **EXHIBIT P10 THE TRUE COPY OF THE LETTER OF COMMUNICATION GIVEN BY THE REGISTRAR OF COMPANIES DATED 28-72017.** - **EXHIBIT P11 TRUE TRUE COPY OF THE COMMUNICATION BY THE 2ND RESPONDENT DATED 3/4/2017.** - **EXHIBIT P12 THE TRUE COPY OF THE NOTICE DATED 31-5-2017 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER COMPANY.** - **EXHIBIT P13 THE TRUE COPY OF THE E AUCTION NOTICE DATED 10-42018.** - **EXHIBIT P14 THE TRUE COPY OF THE E AUCTION PUBLISHED IN THE NEWS PAPER.** - **EXHIBIT P15 TRUE COPY OF THE CAVEAT PETITION FILED BY THE 2ND RESPONDENT BEFORE THE DRT-1, ERNAKULAM.** - **EXHIBIT P16 TRUE COPY OF THE PROFILE OF THE COMPANY DOWNLOADED FROM THE WEBSITE OF THE 2ND RESPONDENT.** - **EXHIBIT P17 THE TRUE COPY OF THE NOTICE ISSUED BY THE ADVOCATE COMMISSIONER IN CMP-229/2019 ON THE FILE OF THE C.J.M. COURT, MANJERI.** - **EXHIBIT P18 THE TRUE COPY OF THE JUDGMENT OF THIS COURT IN WPC NO.3692/2017.** - **EXHIBIT P19 THE TRUE COPY OF THE STATEMENT SHOWING LIABILITY TO THE TATA MOTORS.** - **EXHIBIT P20 THE TRUE COPY OF THE RBI GUIDELINES DNBS(PD) CC.NO.37/SCRC/26.03.001/2013-2014 DATED 19-032014.** **WP(C).No. 4019 of 2019** **8** The word “ **Bank** ” occurring in the 2[nd] , 4[th] and 6[th] lines of paragraph No.9 on page No.5 of the judgment dated 12.02.2019 in W.P.(C)No.4019/2019 is corrected as “ **2[nd] respondent** ” as per order dated 26.02.2019 in I.A.No.1/2019 in W.P.(C)No.4019/2019. Sd/- Joint Registrar