Misc. Appeal Nos. 30 and 186 of 2010. Case: Finolex Industries Ltd. Vs Deutsche Bank A.G.. Mumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals)
| Case Number | Misc. Appeal Nos. 30 and 186 of 2010 |
| Counsel | For Appellant: Mr. Janak Dwarkadas, Sr. Counsel and Mr. Chetan Kapadia, i/b Crawford Bayley and Co., Advocate and For Respondents: Mr. S. Doctor, Sr. Counsel, Mr. Z. Behramkamdin and Mr. Dheeraj Totla, i/b Juris Corp., Advocates |
| Judges | Allah Raham, J. (Chairperson) |
| Issue | Code of Civil Procedure, 1908 (CPC) - Order XL Rule XL; Code of Civil Procedure, 1908 (CPC) - Order XXXIX Rule XXXIX; Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 - Sections 19, 19(12), 19(13)(A), 19(18), 22 |
| Judgement Date | March 29, 2010 |
| Court | Mumbai DRAT DRAT (Mumbai Debt Recovery Appellate Tribunals) |
Judgment:
Allah Raham, J. (Chairperson)
1. This Appeal impugns order dated 8th January, 2010 read with Corrigendum dated 22nd January, 2010 passed by the learned Presiding Officer, DRT-I, Mumbai, whereby Interim Application No. 274/2009 filed by the respondent bank and Interim Application No. 327/2009 filed by the appellant in Original Application No. 160/2009 were disposed off. Facts relevant for the purposes of this Appeal are that O.A. No. 160/2009 was filed by the Deutsche Bank A.G. (respondent herein) for recovery of US$ 2,08,21,480.40 together with interest against Finolex Industries Limited (appellant herein). Interim relief was also claimed. In para 7(e) interim relief claimed is as under:
7(e) Pending hearing and final disposal of this original application, this Hon'ble Tribunal may be pleased to grant interim injunction restraining defendant, their servants, employees, agents and representatives from alienating, encumbering, dealing with, disposing off and/or creating third party rights in respect of all the properties, movable and immovables, of or belonging to defendant;
2. Besides, I.A. No. 274/209 was filed by the respondent bank seeking interim reliefs. In para 20(A), (C), (E) and (F) relief of injunction was sought. On 22nd October, 2009 the Presiding Officer found that the appellant was served but failed to appear in person or through a counsel. The Presiding Officer after hearing the counsel "without going into merits of the I.A." directed the appellant "by interim injunction not to create further encumbrances in respect of the properties mentioned in Ext.-X to the original application over and above security created in favour of creditors as per the Schedule No. 9 in the Annual Report of 2008-2009 of the Lone Defendant Company till further orders."
3. The Appellant filed I.A. No. 274/2009 on 11th December, 2009 and prayed for recalling of the ex-parte order dated 22nd October, 2009. The Appellant stated that it has instituted a Special Civil Suit No. 1240/2009 in the Court of Civil Judge Senior Division Pune, at Pune, inter alia, challenging the transaction dated 9th August, 2007 which is the basis of the O.A. filed by the respondent bank. This is a frivolously instituted suit, therefore prayer for stay of the proceeding before the Tribunal was made. It was also pleaded by the Appellant that the alleged transactions are not banking transactions and, therefore, the Tribunal has no jurisdiction over the dispute. Besides, it was pleaded that the Appellant company is in a sound financial health. No case for attachment before judgment is made out. It was also pleaded that the transactions in question are void ab initio and in any case voidable at the instance of the defendant (Appellant herein).
4. After hearing learned counsel for the parties the Presiding Officer held that interim order dated 22nd October, 2009 is passed under Sec. 19(12) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the RDDBFI Act) and the order is not passed under Sec. 19(13)(A) of the RDDBFI Act. The Presiding Officer, therefore, confirmed the ex-parte order dated 22nd October, 2009 by passing the impugned order. He, however, permitted the appellant company to create,
(a) English mortgage on pari passu basis in favour of Axis, Trustee Services...
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