M/S Vinedale Distilleries Ltd.& Anr vs Dena Bank & Ors

ITEM No.1-A Court No.4 SECTION XVI-A (for judgment)

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Transfer Petition ) No. 740-741/08

M/S VINEDALE DISTILLERIES LTD. & ANR. Petitioner (s)

VERSUS

DENA BANK & ORS. Respondent (s)

Date : 11/01/2010 This Petition was called on for judgment today.

For Petitioner (s) Mr. D.K. Sinha,Adv.

For Respondent(s) Ms. Manjusha Wadhwa,Adv.

Mr. E. C. Agarwala,Adv.

Hon'ble Mr. Justice Altamas Kabir pronounced the

Judgment of the Bench comprising His Lordship,

Hon'ble Mr. Justice Aftab Alam and Hon'ble Mr.

Justice Surinder Singh Nijjar.

The Transfer Petitions are allowed in terms of

the signed judgment placed on the file.

(Ganga Thakur) (Juginder Kaur) P.S. to Registrar Court Master

(Signed non-Reportable judgment is placed on the file.) IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

TRANSFER PETITION (CIVIL) NOS.740-741 OF 2008

M/s Vinedale Distilleries Ltd. and Another ... Petitioners

Versus

Dena Bank and others ... Respondents

J U D G M E N T

ALTAMAS KABIR, J.

1. These Transfer Petitions have been filed by M/s

Vinedale Distilleries Ltd. for transfer of two

Original Applications pending before the Debts

Recovery Tribunal (hereinafter referred to as `the

DRT'), Hyderabad, to the DRT, Jhandewalan, Delhi.

While O.A. No.29 of 2000 was filed by Dena Bank

against the Petitioner Company, S.A. No.157 of 2008

was filed by the Petitioner Company against Dena 4

Bank before the DRT, Hyderabad. The said

applications had been made on the basis of an order

passed by this Court on 4th January, 2008, in

Transfer Petition (C) No.945 of 2006. While

allowing the said Transfer Petition and thereby

transferring various suits pending between the

parties before the Civil Court in Andhra Pradesh to

the Delhi High Court, this Court, on consent of the

parties, also directed as follows :-

"In order to avoid any future confusion, on consent of the parties, any suit which may be filed in future touching upon the control and management of the Company in question, should be filed before the Hon'ble Delhi High Court, which will decide the matters."

2. Having regard to the above direction, the

Petitioners herein have prayed that the two above-

mentioned matters filed under the provisions of the

Recovery of Debts Due to Banks and Financial

Institutions Act, 1993 (hereinafter referred to as 5

`the DRT Act') and Section 17 of the Securitization

and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002

(hereinafter referred to as `the Securitization

Act'), both pending before the DRT, Hyderabad, be

transferred to the DRT, Jhandewalan, Delhi.

3. Appearing in support of the Transfer Petitions,

Mr. Chetan Sharma, learned Senior Advocate,

submitted that since by virtue of the aforesaid

order dated 4th January, 2008, all matters

pertaining to the Petitioner Company and its

management had been transferred to the Delhi High

Court in order to avoid confusion, the proceedings

pending before the DRT, Hyderabad, were also

required to be transferred to the DRT, Jhandewalan,

Delhi, so that all matters pertaining to the

Vinedale Distilleries and its management could be

heard and disposed of by the Delhi High Court

exclusively. Mr. Sharma submitted that in order to

avoid a possible conflict of decisions among Courts

operating in different territorial jurisdictions in 6

regard to the management and control of the

Petitioner Company, this Court had directed all

matters relating to the Company and its management

to be decided by the Delhi High Court exclusively.

Mr. Sharma submitted that even further proceedings

against the Award of the DRT in Delhi would have to

be filed before the Delhi High Court which was also

in seisin of the matters pertaining to the

management of the company. Mr. Sharma submitted

that in the interest of justice and in keeping with

the spirit of the order passed by this Court on 4th

January, 2008, the pending proceedings before the

DRT, Hyderabad, should be transferred to the DRT,

Jhandewalan, Delhi.

4. Responding to Mr. Sharma's submissions, Mr.

Rakesh Tikku, learned Advocate appearing for

Respondent No.1 Bank, contended that in view of the

disputes among the three groups fighting for the

management of the Petitioner Company, the payment

of the dues of the Bank were being successfully 7

avoided. It was submitted that the present

applications were nothing but a ploy to further

defer payment of the outstanding dues of the Bank

amounting to almost Rs.19 crores as on the date of

the hearing. It was submitted that in the contest

relating to the management of the Company, the

payment of the dues of the Bank were being

sidelined and the Bank was, therefore, willing to

abide by any order that might be passed by this

Court in the present Transfer Petitions since its

only concern was to recover its dues from the

Petitioner Company. In fact, learned counsel for

the Bank questioned the manner in which one group,

referred to as the S.K. Agarwal Group, had

initiated the proceedings before the DRT,

Hyderabad, challenging the order passed by the Bank

under Section 13(4) of the Securitization Act in

January, 2006, after a delay of 786 days.

According to learned counsel, the very situation

which this Court had wanted to avoid by its order

dated 4th January, 2008, was sought to be frustrated 8

by the filing of the Appeal by the S.K. Agarwal

group before the DRT, Hyderabad, while all the

other matters pertaining to the Company and its

management were pending in Delhi.

5. The petitioner's prayer for transfer of the

pending proceedings before the DRT, Hyderabad, was,

however, seriously opposed on behalf of private

respondents. It was urged by Mr. E.C. Agrawala,

learned Advocate appearing for the private

respondents, that the proceedings before the DRT,

Hyderabad, were not covered by the directions

contained in the order passed by this Court on 4th

January, 2008. Mr. Agrawala submitted that the

said order related only to suits in regard to the

management and control of the Petitioner Company.

As far as the proceedings before the DRT,

Hyderabad, are concerned, Mr. Agrawala submitted

that they related to the recovery of the

outstanding dues of the Bank which the Bank was

entitled to initiate before the Debts Recovery

Tribunal and had nothing to do with the management 9

of the Company as such. It was urged that the

proceedings before the DRT were and would have to

be treated on a different footing in relation to

the suits pending before the Delhi High Court for

the right to manage the Company. Mr. Agrawala

submitted that there was, therefore, no ground made

out on behalf of the Petitioner Company for

transfer of the proceedings before the DRT,

Hyderabad, to the DRT, Jhandewalan, Delhi.

6. We have carefully considered the submissions

made on behalf of the respective parties, and,

although, technically speaking the proceedings

before the DRT, Hyderabad, are not covered by the

directions contained in the order of 4th January,

2008, due weightage has to be given to the

intention of this Court that all matters pertaining

to the management of the Petitioner Company should

be heard and decided by one Court to avoid

conflicting judgments. In fact, that was the very

object and purport with which all the pending civil

matters in the State of Andhra Pradesh touching the 10

management of the Petitioner Company were directed

to be heard by the Delhi High Court exclusively. In

keeping with the above intention and purport of the

said order, it was only but reasonable that the

proceedings before the DRT, Hyderabad, should be

transferred to the DRT, Jhandewalan, Delhi, since

all the other proceedings relating to the

management and control of the Petitioner Company

are being heard by the Delhi High Court.

Furthermore, it is the Delhi High Court which is

the appellate forum against an order of the DRT,

Delhi. Therefore, in keeping with the spirit of

the directions contained in the order of 4th

January, 2008, we are inclined to allow the

Transfer Petition filed by M/s Vinedale

Distilleries Ltd.

7. The Transfer Petitions are, therefore, allowed.

Let O.A. No.29 of 2000, Dena Bank vs. M/s Vinedale

Distilleries Ltd. & Ors., and Securitization

Application No.157 of 2008, M/s Vinedale

Distilleries Ltd. vs. Dena Bank, pending before the 11

Debts Recovery Tribunal, Hyderabad, Andhra Pradesh,

stand transferred to the Debts Recovery Tribunal,

Jhandewalan, Delhi.

8. There will, however, be no order as to costs.

...............................................................J. (ALTAMAS KABIR)

...............................................................J. (AFTAB ALAM)

...............................................................J. (SURINDER SINGH NIJJAR)

New Delhi,

Dated: January 11, 2010.