M.P. NOS. 1 & 2 OF 2008 M/s. Screen Entertainmentrep. by J.JayakumarNo.4 v. 1. Union of India

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 17.04.2009CORAMTHE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR. JUSTICE V.DHANAPALANW.A. NOS. 1078 & 1079 OF 2008W.P. NO. 46861 OF 2006ANDM.P. NOS. 1 TO 3 OF 2008M.P. NOS. 1 & 2 OF 2008M/s. Screen Entertainmentrep. by J.JayakumarNo.4, Kilpauk Garden II StreetKilpauk, Chennai 600 010... Appellant in WA 1078/08/PetitionerM/s. South India Metal Exportsrep. by J.JayakumarNo.4, Kilpauk Garden II StreetKilpauk, Chennai 600 010... Appellant in WA 1079/08/PetitionerM/s. Metro Film Corporationrep. by J.JayakumarNo.4, Kilpauk Garden II StreetKilpauk, Chennai 600 010... Petitioner in WP 46861/06- Vs -1. Union of India rep. by Minister of Finance Parliament House, New Delhi – 1.2. The Governor Reserve Bank of India Madras 600 009.3. The Chairman and Managing Director Indian Bank, Central Office No.66, Rajaji Salai, Chennai 600 001.4. The General Manager (Recovery) Indian Bank, Central Office No.66, Rajaji Salai, Chennai 600 001. https://hcservices.ecourts.gov.in/hcservices/

5. The General Manager (Recovery) Indian Bank Circle Office Wellington Estate No.55, Ethiraj Salai, Chennai 600 008.6. The General Manager Assets Recovery Management Branch Indian Bank, Wellington Estate No.55, Ethiraj Salai, Chennai 600 008.7. The Presiding Officer Debt Recovery Tribunal – I Spencer Plaza 6th Floor Chennai 600 002... Respondents in both appealsand WP.Writ Appeals filed against the order dated 26th Aug., 2008 passedby learned single Judge in W.P. No.47591/06 : This W.P.filed underArticle 226 of the Constitution of India praying to issue a writ ofmandamus directing the 2nd respondent for giving suitable directionto the respondents 3-6 for releasing the entire documents lying withthem pertaining to the accounts of M/s.Screen Entertainment to thepetitioner. and 47592 of 2006 : Issue a writ of mandamus directing the 2ndrespondent for giving suitable direction to the respondents 3-6 forreleasing the entire documents lying with them pertaining to theaccounts of M/s.South India Metal Exports to the petitioner.Writ petition filed for the issuance of a writ of mandamusdirecting the 2nd respondent for giving suitable direction torespondents 3 to 6 for releasing the entire documents lying with thempertaining to the account of M/s.Metro Film Corporation as statedtherein.For Appellant/: Mr. Vijay Narayan, SC for Petitioner Mr. Sanjay RamasamyFor Respondents: Mr. Jayesh B. Dolia for M/s.Aiyar & DoliaCOMMON JUDGMENTS.J.MUKHOPADHAYA, J.In both the appeals as common order dated 26th Aug., 2008 passedby learned single Judge is under challenge and common question of lawinvolved and arising out of common facts, they were heard togetherand disposed of by this common judgment. https://hcservices.ecourts.gov.in/hcservices/

2. The appellants approached the writ court by filing twoseparate writ petitions for mandamus directing the 2nd respondent –Reserve Bank of India to give suitable direction to the respondents 3to 6, Indian Bank (hereinafter referred to as 'Bank') for releasingthe documents lying with the Bank pertaining to account of appellant,M/s.Screen Entertainments and M/s. South India Metal Exportsrespectively. The Court having dismissed the writ petitions, theseappeals have been preferred.The writ petition has been filed by the petitioner, M/s.MetroFilm Corporation for similar relief as claimed by the appellants inthe writ appeals.3. The case of the appellants in nutshell is that theyapproached the Bank for financial assistance, which was granted andloan was disbursed on various occasions. For different reasons, theappellants failed to remit the dues and loan amount. The Bank filedoriginal applications before the Debts Recovery Tribunal No.I,Chennai (hereinafter referred to as 'DRT'). During the pendency ofthe cases, one time settlement (hereinafter referred to as 'OTS') wasreached on 20th April, 2004 and it was agreed upon that a sum ofRs.225 Lakhs (Rupees Two Hundred and Twenty Five Lakhs) would be paidby the appellants within a period of twelve months from the date ofcommunication of the sanction and also remit a sum of Rs.75 Lakhs(Rupees Seventy Five Lakhs) within a period of thirty days.According to the appellants, they have remitted a sum of Rs.75 Lakhson 20th May, 2004, within a period of thirty days, but the Bank,instead of adjusting the said amount in Metro Film Corporationaccount, adjusted Rs.70 Lakhs in Screen Entertainment Account. Thebalance Rs.5 Lakhs was adjusted to Metro Film Corporation account.The grievance of the appellant is that, contrary to the compromisemade between the parties, Kottivakkam property was not released inorder to sell the said property to third parties and remit thebalance OTS amount, the Bank, in fact, agreed to release the documentand also requested the purchaser to deposit a sum of Rs.10 Lakhs in ano lien account. Accordingly, one purchaser had deposited a sum ofRs.10 Lakhs in no lien account of the Bank. Despite the said fact,the Bank had not given no objection to appellants to deal with thesaid property. In view of the same, the appellants were unable topay the respective amount within twelve months. Therefore, theyrequested the Bank for extending the time to settle the balanceamount of Rs.220 Lakhs (Rupees Two Hundred and Twenty Lakhs) and on14th July, 2005, the period of OTS was extended by Bank till 20th Oct.,2005, with same and similar condition, which remained unchanged. TheBank agreed to release the Kottivakkam property on payment of Rs.100Lakhs and balance of Rs.120 Lakhs was to be paid on or before 20thOct., 2005. In the said letter, it was agreed by Bank to release theAnna Nagar property on receipt of the balance of Rs.120 Lakhs.Furthermore, it had been agreed that interest @ 11.5% would becollected from 1st Jan., 2004 till the settlement of full OTS amount. https://hcservices.ecourts.gov.in/hcservices/ Further case of the appellant is that they mobilised fund fromthird parties and paid Rs.100 Lakhs on 20th Oct., 2005. Thereafter,they requested for release of Kottivakkam property. However, eventhereafter the Bank has not released the documents pertaining toKottivakkam property. There being a delay of five months in settlingthe OTS, the appellant agreed topay further amount apart from Rs.295Lakhs. However, the Bank having not accepted, the writ petitionswere preferred, which were dismissed.4. The case of the Bank is that the Bank moved before the DRTand recovery certificate has been obtained from DRT on 11th March,2004. It is only thereafter the appellants submitted a proposal ofOTS on 17th March, 2004 to settle the entire amount. The Bank agreedfor OTS, but the amounts were not paid in time. The appellants hadnot adhered to the terms and conditions of OTS and, therefore, theyare not entitled for any relief as was sought for in the writpetitions, which were rightly dismissed. The appellants, who haveremitted the balance amount after a period of five months are notentitled to any relief as prayed for in the writ petitions and theyare liable to pay more amount with further interest as per therecovery certificate issued.5. Learned single Judge, having noticed the aforesaid fact and aDivision Bench judgment of this Court in Tamil Nadu IndustrialInvestment Corporation Ltd. - Vs – Millenium Business Solutions Pvt.Ltd. (2004 (5) CTC 689), dismissed the writ petitions. That was acase in which the Division Bench held that Article 226 could be usedby High Court for enforcing a fundamental right or any right for anyother purpose, but cannot order for OTS in absence of any violationof any law.6. We have heard the learned counsel for the parties and noticedthe rival contentions. During the pendency of the judgment, it wasbrought to our notce that recovery officer has also issued a noticeon 22nd Jan., 2009, for execution of recovery certificate No.125/02.It is not in dispute that the appellants failed to pay theamount in terms with the OTS. Admittedly, as per the OTS dated 20thApril, 2004, apart from paying a sum of Rs.75 Lakhs within time, therest of Rs.220 Lakhs were not paid. Even after extension of timegranted by the Bank on 15th July, 2005 upto 20th Oct., 2005, theappellants could pay only a sum of Rs.100 Lakhs and the rest of theamount of Rs.120 Lakhs was due. Thus, the OTS could not be giveneffect in view of the inaction on the part of the appellants. So faras this Court is concerned, under Article 226 of the Constitution ofIndia, the Court cannot direct the Bank to reach another OTS. It isthe domain of the Bank, which may agree on the basis of the proposal,if given by the borrower. So far as the return of documents areconcerned, if amount due is found to have been paid within the timeprescribed, the Court can issue a writ of mandamus on a Bank toreturn the documents pertaining to secured assets. In the present https://hcservices.ecourts.gov.in/hcservices/ case, as we have noticed that OTS could not be given effect becauseof the inaction on the part of the appellants (borrowers), and now asper the decree of the Debts Recovery Tribunal the recoverycertificate has been issued, till it is satisfied by the appellants,they cannot claim for return of the documents relating to securedassets, which they can claim before DRT after its order is compliedwith.7. We find no merit to interfere with the order passed bylearned single Judge and in absence of merit, both the writ appealsare dismissed. In view of the order passed in the writ appeals, andas the writ petition is also devoid of merits, the same is alsodismissed. Consequently, connected miscellaneous petitions are alsodismissed. But there shall be no order as to costs.Sd/-Asst.Registrar/True Copy/Sub.Asst.RegistrarGLNTo1. The Minister of Finance Government of India Parliament House, New Delhi – 1.2. The Governor Reserve Bank of India Madras 600 009.3. The Chairman and Managing Director Indian Bank, Central Office No.66, Rajaji Salai, Chennai 600 001.4. The General Manager (Recovery) Indian Bank, Central Office No.66, Rajaji Salai, Chennai 600 001.5. The General Manager (Recovery) Indian Bank Circle Office Wellington Estate No.55, Ethiraj Salai, Chennai 600 008.6. The General Manager Assets Recovery Management Branch Indian Bank, Wellington Estate No.55, Ethiraj Salai, Chennai 600 008. https://hcservices.ecourts.gov.in/hcservices/

7. The Presiding Officer Debt Recovery Tribunal – I Spencer Plaza 6th Floor Chennai 600 002.+ 3 CC to Mr.Sanjay Ramasamy,Advocate,SR.15132 W.A. NOS. 1078 & 1079 OF 2008 AND W.P. NO. 46861 OF 2006CK(CO)EM/24.4