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Forntline Corporation Ltd Vs. Punjab and Sind Bank - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Judge
AppellantForntline Corporation Ltd
RespondentPunjab and Sind Bank
Excerpt:
.....relocate its branch temporarily to some other premises while the old building and structure at the suit premises could be demolished and a new building constructed thereupon. the terms provided for the cost of shifting to be borne by the plaintiff and the rent or occupation charges payable by the bank for its alternative space to also be paid by the plaintiff. the terms envisaged the new construction to be completed within a certain period of time and included penalty clauses that provided for monthly damages of rs.5 lakh being paid by the plaintiff to the bank if the project was delayed by or about 21 months and for double such amount if the project was delayed even more. it is claimed in the plaint that the bank has substantially removed itself from the suit premises, though possession.....
Judgment:

O110GA2352of 2014 WITH CS217of 2013 GA1884of 2013 IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURISDICTION FORNTLINE CORPORATION LTD Versus PUNJAB AND SIND BANK BEFORE: The Hon'ble JUSTICE SANJIB BANERJEE Date : 2nd November, 2016.

Ms.Noelle Banerjee,Advocate appeaRs.Mr.Dipak Dey,Advocate appeaRs.Mr.Dipanjan Dey,Advocate appeaRs.Ms.Jayati Chowdhury,Advocate appeaRs.Mr.Rudrajit Sarkar,Advocate appeaRs.Ms.Mandobi Chowdhury,Advocate appeaRs.Mr.Jit Ray,Advocate appeaRs.The Court : - This is a mischievous suit of the most vicious form.

These are the kinds of action that clog up courts and are shamelessly pursued.

If actions like these are not rewarded with appropriate costs, the system may collapse.

The plaintiff obtained credit facilities from the defendant bank against securities by way of immovable properties in Kolkata and elsewhere being furnished.

One of the securities was an immovable property at 8, Old Court House Street, Kolkata – 700001.

The present suit pertains to such property.

The plaintiff acquired this property from the Bharat Chamber of Commerce at a time when an eviction suit filed by the erstwhile owner against the bank was still pending.

The defendant bank is in possession of the entirety or a substantial portion of the ground floor and the last paid rent to the plaintiff was Rs.35,883/- for the month of May, 2013.

Terms of settlement were filed in the eviction suit which the plaintiff inherited, under which the bank agreed to relocate its branch temporarily to some other premises while the old building and structure at the suit premises could be demolished and a new building constructed thereupon.

The terms provided for the cost of shifting to be borne by the plaintiff and the rent or occupation charges payable by the bank for its alternative space to also be paid by the plaintiff.

The terms envisaged the new construction to be completed within a certain period of time and included penalty clauses that provided for monthly damages of Rs.5 lakh being paid by the plaintiff to the bank if the project was delayed by or about 21 months and for double such amount if the project was delayed even more.

It is claimed in the plaint that the bank has substantially removed itself from the suit premises, though possession thereof has not been made over to the plaintiff.

The plaintiff claims to have borne the bank’s expenses for shifting.

The initial part of the plaint dwells on the plaintiff’s right to the suit premises, the terms of settlement executed between the parties and the action taken in accordance therewith.

The next half of the plaint is almost unrelated to the fiRs.as it refers to the bank having issued notices to the plaintiff in respect of, inter alia, the suit premises under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

In respect of such notice issued by the bank relating to the suit premises under Section 13 of the said Act, the plaintiff has sought an injunction to thwart the bank taking appropriate steps under the said Act of 2002 in view of the plaintiff’s claim under the terms of settlement and the present suit for specific performance of such terMs.The plaintiff also refers to an order of May 17, 2013 passed by the appropriate Debts Recovery Tribunal where the plaintiff herein sought to assert the terms of settlement filed in the eviction suit to resist the claim of the bank against it.

The Tribunal observed that the Tribunal could not take cognizance of the claim of the plaintiff herein for specific performance of the terms of settlement while dealing with the bank’s claim under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

The Tribunal was perfectly justified, particularly since the plaintiff’s cause of action in respect of the terms of settlement have no nexus with the bank’s money claim against the plaintiff or the bank’s right to proceed against its securities.

That the present suit for specific performance of the terms of settlement filed in the eviction suit is maintainable, is beyond question.

As to what the fate of this suit may be is an entirely different matter altogether.

Merely because the plaintiff had the right to institute this suit to specifically enforce the terms of settlement would not entail an injunction restraining the bank from taking appropriate steps in its avatar as a secured creditor qua the security which, incidentally, is also the subject matter of the present suit.

If the plaintiff is able to pay off the bank’s dues and ward off the sale of the suit premises, the suit for specific performance will run its couRs.and will be meaningful.

In the event the bank is able to sell the suit premises for the failure of the plaintiff to discharge its dues to the bank, the suit will become infructuous as the plaintiff will no longer be the owner of the property in question or entitled to enforce the terms of settlement filed in the eviction suit.

The present action was cleverly crafted to audaciously link the claim for specific performance with the bank’s notice under Section 13 of the Act of 2002 when the bank’s dual relationship with the plaintiff was obvious and two could not be confused.

In any event, by virtue of Section 34 of the said Act of 2002, no order could have been passed in this suit creating any impediment in the way of the bank enforcing its securities or in the appropriate Debts Recovery Tribunal dealing with the bank’s claim.

GA No.1884 of 2013 is dismissed by vacating the subsisting order, if any, in view of the complete embargo under Section 34 of the said Act of 2002.

The suit will remain for whatever it may be worth.

But in the event the suit property is sold by the bank in exercise of the bank’s rights under the said Act of 2002, the claim cannot thereafter be pursued by the plaintiff herein.

In view of this order, GA2352of 2014 is disposed of without any further order.

The plaintiff will pay costs to the bank assessed at Rs.5 lakh.

Urgent website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

(SANJIB BANERJEE, J.) S.Chandra


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