Judgments (DRT, DRAT, SC)

Uttar Pradesh Financial Corporation and others vs Sri Bharat Paper Udyog Private Limited and others  [SUPREME COURT OF INDIA, 08 Sep 2011]


Shiv Cotex vs Tirgun Auto Plast Private Limited and others  [SUPREME COURT OF INDIA, 30 Aug 2011]

Banking & Finance – Civil Procedure – State Financial Corporations Act, 1951 – Code of Civil Procedure, 1908, s. 100, O. 17 r. 3(a) – Order of remand in second appeal by HC – Failure to formulate substantial question of law – Legality – Plaintiff company availed a term loan from defendant State Financial Corporation by mortgaging its property – Plaintiff defaulted in repaying the loan – Defendant took over the mortgaged property and put it for sale – Plaintiff filed suit for declaration and mandatory injunction against defendant – Since plaintiff failed to produce evidence on the date fixed for the same, Trial Court dismissed the suit under O. 17 r. 3(a) CPC – Defendant, in the meantime, sold the property to the appellant in the instant appeal – Plaintiff filed appeal and a petition for impleading appellant purchaser in the first appeal – First Appellate Court allowed the impleadment petition, however, dismissed the appeal – Plaintiff filed appeal before the HC – HC, by impugned judgment, allowed plaintiff’s appeal and remanded the suit for fresh disposal – Whether the impugned HC order, remanding the case to Trial Court for fresh disposal, was proper – Held, HC, while deciding the second appeal, failed to adhere to the necessary requirement of s. 100 CPC and interfered with the concurrent judgment and decree of the courts below without formulating any substantial question of law – Formulation of substantial question of law is a must before the second appeal is heard and finally disposed of by the HC – HC failed to keep in view the constraints of second appeal and overlooked the requirement of the second appellate jurisdiction as provided in s. 100 CPC and that vitiated its decision – Further, HC upset the concurrent judgment and decree of the two courts on misplaced sympathy and non-existent justification – HC observed that the stakes in the suit being very high, the plaintiff should not be non-suited on the basis of no evidence – As a matter of fact, the Trial Court had given more than sufficient opportunity to the plaintiff to produce evidence in support of its case – However, plaintiff did not let any evidence on three occasions granted by the Trial Court – If despite three opportunities, no evidence was let in by the plaintiff, it deserved no sympathy in second appeal in exercise of power u/s. 100 CPC – No justification at all for the HC in upsetting the concurrent judgment of the courts below – HC was clearly in error in giving the plaintiff an opportunity to produce evidence when no justification for that course existed – Impugned HC order was set aside – Appeal allowed.


State Bank of India and another vs Emmsons International Limited and another  [SUPREME COURT OF INDIA, 18 Aug 2011]

Civil Procedure – Contract & Commercial – Banking & Finance – Code of Civil Procedure, 1908, s. 96 – Reversal of Trial Court order by first appellate court – Failure to consider all the issues – Effect – 2nd respondent (buyer) placed a purchase order on 1st respondent (seller) for supply of rock sulphate – 1st appellant bank (issuing bank) and 2nd appellant bank (advising bank) established the letter of credit at the request of 2nd respondent in favour of 1st respondent – 1st respondent supplied the materials to 2nd respondent for acceptance and 1st appellant issuing bank got the documents from negotiating bank of seller – 1st appellant issuing bank pointed out some discrepancies in respect of documents under the letter of credit – Negotiating bank informed that the discrepancies had been rectified and the documents complied with the requirement of the credit – However, 1st appellant issuing bank continued to insist that the documents were discrepant; the documents presented were not acceptable to it and it held that the documents on collection basis at the risk and responsibility of the negotiating bank – 1st respondent seller filed a suit for recovery of money against appellant banks – Trial Court dismissed the suit holding that the issuing bank had properly dishonoured the documents relating to the letter of credit and the seller was not entitled to get any amount or interest from the issuing bank and the advising bank on the basis of that letter of credit – Respondents filed appeal – HC, by impugned judgment, allowed the respondent’s appeal and granted a decree to the seller as prayed in the suit – Appellant contended that HC had failed to consider the 5th issue framed by the Trial Court relating to acceptance of encashment of bill and document on collection basis – Held, it should not be said that issue no. 5 was immaterial or finding of the Trial Court on that issue was inconsequential – HC was hearing the first appeal and, as a first appellate court it ought to have considered and addressed itself to all the issues of fact and law before setting aside the judgment of the Trial Court – Impugned HC judgment suffered from a grave error as it ignored and overlooked the finding of the Trial Court on issue no. 5 that the seller accepted the encashment of bill and document on collection basis – HC was required to address itself to issue no. 5 which surely had bearing on the final outcome of the case – HC failed to follow the fundamental rule governing the exercise of its jurisdiction u/s. 96 of the CPC that where the first appellate court reversed the judgment of the trial court, it was required to consider all the issues of law and fact – Failure to consider all issues vitiated the entire judgment of the HC and hence, the same could not be sustained – Impugned HC judgment was set aside and the first appeal was restored for rehearing in the file of HC – Appeal allowed.


Arulmighu Dhandayudhapaniswamy Thirukoil, Palani, Tamil Nadu, thr. Its Joint Commissioner vs Director General of Post Offices, Department of Posts and others  [SUPREME COURT OF INDIA, 13 Jul 2011]

Consumer Protection – Banking & Finance – Consumer Protection Act, 1986, s. 2(1)(g) – Post Office Savings Bank General Rules, 1981 – Post Office Time Deposit – Refund without interest – Deficiency of service – Appellant temple deposited a huge sum with Post Office for a period of five years under the Post Office Time Deposit Scheme – Appellant received impugned letter from 3rd respondent Post Master informing that the Scheme had been discontinued for investment by institution and hence, all such accounts should be closed without interest – Consequently, amount deposited by the appellant was refunded without interest after seven months of such deposit – Appellant’s complaint before the State Consumer Commission was dismissed and their appeal was also dismissed by National Consumer Commission thereafter – Whether there was any deficiency in service on the part of the 3rd respondent Post Master and whether the appellant-complainant was entitled to any relief by way of interest – Held, impugned communication from 3rd respondent clearly revealed that even prior to the deposits made by the appellant, investment by institutions under the Scheme was not permissible and in fact discontinued from that date – It was not in dispute that the appellant temple was also an institution administered and under the control of the Hindu Religious and Charitable Endowments Department of the State – Vide impugned communication, 3rd respondent informed the appellant to close all Time Deposit accounts since the same was not permissible – Impugned communication also showed that all such accounts should be closed and the amounts so deposited were to be refunded without interest – In the instant case, the deposit accounts had been caused to be closed and the amounts deposited had been returned to the depositors without interest – Though the appellant claimed interest and insisted for the same on the ground of deficiency in service on the part of 3rd respondent, in view of r. 17, the respondents were justified in declining to pay interest for the deposited amount since the same was not permissible – In the light of r. 17 of the Rules, as rightly concluded by the State and the National Commission, it could not be held that there was deficiency in service on the part of the respondents, 3rd respondent in particular – Further, in view of impugned letter and in view of r. 17 of the Rules, failure to pay interest should not be construed as a case of deficiency in service in terms of s. 2(1)(g) of the Act – Both the State and the National Commission had concluded that the 3rd respondent was ignorant of any notification and because of that ignorance the appellant did not get any interest for the substantial amount – Hence, respondents could not be fastened for deficiency in service in terms of law or contract – Appeal dismissed.


Rasila S. Mehta vs Custodian, Nariman Bhavan, Mumbai  [SUPREME COURT OF INDIA, 06 May 2011]

(A) Practice & Procedure – Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, ss. 3 and 4 – Special Court (Trial of Offences Relating to Transactions in Securities) Rules, 1992 – In 1992, it was noticed that frauds and irregularities involving huge amounts of money running into several thousand crores were committed by certain financial brokers and financial institutions – Central Government, to combat with the situation, promulgated an ordinance known as the Special Court (Trial of Offences relating to Transactions in Securities) Ordinance, 1992 – Deceased and 28 members of his group including his family members/entities were notified under the Ordinance – Said Ordinance with certain modifications became the Act – Upon enforcement of the Act, all the properties of deceased and his family members, including the appellants apart from other corporate entities stood attached by the Custodian – As a consequence thereof, all eight residential properties/flats of the appellants continue to remain attached under the Act by the Custodian – Later, Central Bureau of Investigation (CBI) issued freeze orders u/s. 102 of the CrPC on all the bank accounts of appellants (mother and sister-in-law of deceased) on the ground that the appellants were recipients of monies diverted by Deceased from banks and financial institutions – Based on the provisions of the Act, Custodian notified 29 entities in the deceased family – Subsequently, due to the fact that joint/second holders were notified entities, the assets of the appellants have been treated as attached on and from 08.06.1992 and the same were being managed by the Custodian for the last 15 years – Custodian filed petition against appellants seeking relief of a declaration that the said appellants were benamis and fronts of late Deceased and other notified entities and, therefore, their assets should be utilized in discharge of their liabilities – Appellants also filed application seeking relief of a declaration that all the assets belonged to them and they were the first holders, namely, bank accounts and fixed deposits and the shareholdings may be declared as free from attachment – Custodian issued a notification notifying both the appellants u/s. 3(2) of the Act on the basis of the alleged complaint by Canbank Financial Services Ltd. (Canfina) – Petitions filed by appellants seeking de-notification u/s. 4(2) of the Act were dismissed – Hence, instant appeals – (A) Whether there were provisions for pre decisional hearing thereby ensuring Rules of Natural Justice? – Appellants contended that they were entitled to hearing even at the stage of s. 3(2) – Held, s. 3(2) of the Special Courts Act confer power to Custodian to notify a person in the Official Gazette on being satisfied on information received that such person was involved in any offence relating to transactions in securities during the statutory period 01.04.1991 to 06.06.1992 – S. 3(2) did not give any right of personal hearing to the person being notified – In the absence of any such right there was no pre-decisional hearing – Provisions of the Act did not provide for a pre-decisional hearing before notification – Fact that it did not provide for a pre-decisional hearing was not contrary to the rules of Natural Justice because the decision of the Custodian to notify did not ipso facto takes away any right of the person thus notified or imposed any duty on him – (B) Post decisional hearing – Held, s. 4(2) provides that any person aggrieved by the notification could file a petition objecting to the same within 30 days of the date of the issuance of the notification – Special Court independently analyses all the material while deciding the application filed by the notified party challenging the notification – This amounts to post decisional hearing satisfying the principles of natural justice – (C) Whether the appellants being not involved in offences in transactions in securities could have been proceeded against in terms of the provisions of the Act? – According to the appellants, the phrase ‘involved in the offence’ in s. 3(2) of the Act could only mean ‘accused of the offence’ and since they were not charged with any offence they could not be notified – Held, Act did not create an offence for which a particular person had to be charged or held guilty – Thus the phrase ‘involved in the offence’ would not mean ‘accused of the offence’ – Further, object of the Act was not merely to bring the offender to book but also to recover what were ultimately public funds – Even if there was a nexus between a third party, an offender and/or property the third party could also be notified – In the instant case, appellants could have been reasonably suspected to have been involved in the offence after consideration of the various reports of the Janakiraman Committee, Joint Parliamentary Committee and the Inter Disciplinary Group (IDG); and also the fact that 28 members of the deceased group including his family members/entities were notified under the Special Act Ordinance itself – Said facts were sufficient for the satisfaction of the Custodian to notify the appellants – Appeals disposed of.

(B) Banking & Finance – Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, s. 11(2)(b) – Validity of complaint – Whether Canfina was a Financial Institution and whether the complaint filed by Canfina was invalid? – Held, statement of Objects and Reasons makes it clear that the purpose and the object of the Act was to recover and return monies to those banks and financial institutions from whom the monies were siphoned out – It was thus clear that the bodies which were sought to be covered were the banks and financial institutions whose affairs were investigated into by the Reserve Bank of India – Act was intended to be applied to the workings of the banks and financial institutions into whose affairs the Janakiraman Committee had investigated – Canfina, was one such non-banking financial institution that Janakiraman Committee had investigated and thus it was meant to be covered under the Act – Thus the claim of Canfina falls u/s. 11(2)(b) of the Act – Appeals disposed of.


Bharat Steel Tubes Limited etc. vs IFCI Limited and others  [SUPREME COURT OF INDIA, 04 Apr 2011]

Corporate – Banking & Finance – Companies Act, 1956, s. 4A(2) – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, s. 2(1)(m) – Public Financial Institution – HC held that the respondent (IFCI Ltd.) was a ‘Financial Institution’ u/s. 4A(2) of 1956 Act r/w. s. 2(1)(m) of SARFAESI Act and as a consequence, the respondent would be entitled to take recourse to the provisions of the SARFAESI Act in order to enforce a ‘security interest’ which had accrued in its favour – Petitioner challenged said order contending that the proviso to sub-section (2) of s. 4A of the 1956 Act was not attracted to the facts of instant case as respondent converted itself into a company – Whether contention of the petitioner could be accepted and s. 4A(2) of the Act could not be applied to the respondent case? – Held, the conversion of the respondent into a Company did not alter its position and status as a financial institution – Hence, contentions of the petitioner could not be accepted – Impugned order upheld – Petition dismissed.


Narayan Chandra Ghosh vs UCO Bank and others  [SUPREME COURT OF INDIA, 18 Mar 2011]


Kerala Financial Corporation vs Vincent Paul and another  [SUPREME COURT OF INDIA, 14 Mar 2011]

Banking & Finance – Civil Procedure – State Financial Corporations Act, 1951, s. 29 – Agreement for sale – Conclusion – Appellant Financial Corporation invited tenders for sale of hypothecated property of a defaulter – Respondent filed tender application and appellant finalized his tender, however, civil court ordered status quo in defaulter’s petition – Respondent filed a suit for specific performance of agreement for sale against appellant – Trial Court dismissed respondent’s suit on ground that there was no concluded contract between parties – Respondent appealed to HC wherein HC allowed appeal – Hence instant appeal – Whether respondent had made out a case for discretionary relief of specific performance – Held, respondent remitted Earnest Money Deposit as per appellant’s offer letter, however, such offer letter was not absolute but subject to confirmation by respondent – Respondent, however, had not sent any reply to appellant in form of confirmation of transaction as per cl. (1) of tender condition – In such circumstance, it should not be contended that there was a concluded contract between appellant and respondent – Inasmuch as appellant had agreed to sell property in question subject to compliance of three conditions mentioned in tender documents, unless other party to contract i.e., respondent conveyed his willingness within a week with regard to terms stipulated therein, he should not take advantage of mere remittance of Earnest Money Deposit – Said aspects had been correctly appreciated by Trial Court and it rightly dismissed suit filed by respondent, however, HC, on an erroneous assumption as to appellant’s offer letter concluded that there was a valid contract and granted a decree for specific performance – Impugned HC order was set aside – Appeal disposed of.


State Bank of Travancore vs Kingston Computers (India) Private Limited  [SUPREME COURT OF INDIA, 22 Feb 2011]


Kanaiyalal Lalchand Sachdev and others vs State of Maharashtra and others  [SUPREME COURT OF INDIA, 07 Feb 2011]

Banking & Finance – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ss. 13(2), 14 and 17 – Recovery of loan amount – Respondent no. 3 (Bank) had advanced a loan of Rs. 4,50,00,000/- to appellant no. 6 on an equitable mortgage by deposit of the title deeds of certain properties – Appellant Nos.1 to 5 and ‘X’ stood as personal guarantors to the said loan – On default of re-payment of loan amount, respondent no. 3 filed petition before the Chief Metropolitan Magistrate u/s. 14 of the Act for taking possession of the secured assets – The Magistrate allowed the said application and directed the Assistant Registrar, to take possession of the mortgaged properties after issuing notice to the appellants – Being aggrieved by the said order, the appellants filed writ petition before HC – The HC dismissed said writ petition on the ground that an alternative remedy was available to the appellants u/s. 17 of the Act – The HC directed the respondents to maintain status quo in the matter for a period of 10 weeks from the date of its order, so as to enable the appellants to approach the Debts Recovery Tribunal u/s. 17 of the Act – Hence, the instant appeals – Whether HC rightly dismissed writ petition filed by the appellants on the ground that an alternative remedy was available to the appellants? – Held, an action u/s. 14 of the Act constitutes an action taken after the stage of s. 13(4) of the Act, and therefore, the same would fall within the ambit of s. 17(1) of the Act – Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action u/s. 13(4) of the Act, by providing for an appeal before the DRT – Therefore, the HC rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants u/s. 17 of the Act – Impugned order was upheld – Appeals dismissed.


Industrial Investment Bank of India Limited vs Jain Cables Private Limited and others  [SUPREME COURT OF INDIA, 05 Jan 2011]

Banking & Finance – Constitution – Industrial Reconstruction Bank of India Act, 1984, s. 3(1) and 38 – Industrial Reconstruction Bank (Transfer of Undertaking and Repeal) Act, 1997, s. 4(2) and 13(2)(b) – ‘X’ (IRBI) had sanctioned a loan of Rs. 22,00,000/- in favour of respondent no. 1 – Respondent no. 1 defaulted in repayment of the loan – Subsequently, on 27.03.1997, the Industrial Reconstruction Bank (Transfer of Undertaking and Repeal) Act, 1997 came into force and by virtue of notification dt. 25.03.1997 the undertakings of ‘X’ were transferred to and vested in the appellant w.e.f. 27.03.1997 – Appellant filed application before HC u/s. 40 of the 1984 Act for repayment of loan – HC rejected said application as not maintainable on the ground that the application was filed under the provision of a repealed Act – Hence, the present appeal – Whether HC rightly rejected the said application on the ground that it was filed under the provision of a repealed Act? – Held, no – A plain reading of s. 2(4) coupled with s. 13 (2)(b) of 1997 Act make it clear that any cause of action by ‘X’ in relation to its undertakings existing immediately before 27.03.1997 may be continued and enforced by the appellant as it might have been enforced by ‘X’ if the 1997 Act had not been enacted – It also make it clear that the provisions of Chapter 8 of the 1984 Act, that include s. 40, would continue to be applicable in respect of the arrangements entered into by ‘X’ with an industrial concern u/s. 18 of the 1984 Act and the appellant would be able to enforce the same as fully and effectually as if the 1997 Act had not been enacted – HC in the impugned judgment referred to s. 13 of the 1997 Act, but failed to notice the true import of sub-section 2(b) of s. 13of 1997 Act – Further, the HC completely overlooked the provisions of sub-section (4) of s. 4 of the 1997 Act and as a result arrived at a conclusion that is patently erroneous and cannot be sustained for a moment – Hence, impugned order of the HC set aside – Appeal allowed.


Raju @ Sheikha Mohamed Sharif vs State of Maharashtra and another  [SUPREME COURT OF INDIA, 05 Jan 2011]

Criminal – Banking & Finance – Negotiable Instrument Act, 1881, s. 138 – Code of Criminal Procedure, 1973, s. 357(3) – Bouncing of Cheque – Appellant gave a cheque for Rs.4,00,000/- to the complainant in repayment of a loan of the same amount taken earlier by him – Said cheque on presentation before the bank was returned with the endorsement, ‘account closed’ – Complainant gave a notice to the appellant asking for payment of the cheque amount but the appellant did not make the payment – Complainant filed a complaint against the appellant u/s. 138 of the 1881 Act – Special Metropolitan Magistrate convicted appellant u/s. 138 of 1881 Act and sentenced him to undergo imprisonment for 6 months – The court also directed the appellant to pay compensation of Rs.8,00,000/- u/s. 357(3) of the CrPC – Trial Court dismissed appeal filed against said order – HC also sustained the conviction of the appellant – Hence, the present appeal – Whether order of the HC could be upheld? – Held, during the pendency of the criminal revision, the appellant had deposited Rs.4,00,000/- in court which was withdrawn by the complainant – There was no specific loss caused to the State and, therefore, there was no justification for payment of the large sum of Rs.4,00,000/- as compensation to the State – Hence, compensation amount reduced from Rs.8,00,000/- to Rs.4,00,000/- – Moreover, appellant has faced the rigours of a criminal prosecution for the past 6 years and is said to have served out the substantive sentence of imprisonment for 39 days – Hence, ends of justice would be satisfied by reducing the substantive sentence of the appellant to the period already undergone by him on the condition of payment of Rs.1,00,000/- as additional amount of compensation to the complainant – Sentence modified – Appeal dismissed.


State of Maharashtra and others vs Sarangdharsingh Shivdassingh Chavan and another  [SUPREME COURT OF INDIA, 14 Dec 2010]

Parliament & Legislature – Constitution – Banking & Finance – Bombay Money Lenders Act, 1946 – Illegal money lending business – Propriety of directions given by the then Chief Minister of Maharashtra – Complaints were filed against the second respondent alleging that second respondent and his family members, engaged in illegal money lending business, were harassing him and other farmers – It was also alleged nearly 300 farmers have committed suicide in Vidarbha region of Maharashtra as victims of such illegal money lending business and the torture perpetrated in the recovery of such money – However, Collector issued direction as to not to register any crime against second respondent, without obtaining clearance from the District Anti Money Lending Committee and also without obtaining legal opinion of the District Government Pleader – Said order was passed by the Collector in view of the instructions given to him by the then Chief Minister of Maharashtra – Therefore, it was alleged in the petition that despite there being several complaints against second respondent and his family members, cases were not registered against them in view of the instructions given by the then Chief Minister – HC held that the instruction of the Chief Minister to the Collector was unconstitutional – Hence, present appeal – Held, police officer in charge of a police station, on the basis of information received or otherwise, can start investigation if he has reasons to suspect the commission of any cognizable offence – This legal framework is a very vital component of the Rule of Law in order to ensure prompt investigation in cognizable cases and to maintain law and order – Law does not accord any special treatment to any person in respect of any complaint having been filed against him when it discloses the commission of any cognizable offence – In the present case, the direction of the then Chief Minister to give a special treatment to a particular family about registering of complaint filed against them was totally unwarranted in law – As the Chief Minister of State of Maharashtra he was expected to know that the farmers of the State specially those in the Vidarbha region were going through a great deal of suffering and hardship in the hands of money lenders – This being the ground reality, as the Chief Minister of the State and as holding a position of great responsibility as a high constitutional functionary, he acted beyond all legal norms by giving the impugned directions to the Collector to protect members of a particular family who are dealing in money lending business from the normal process of law – Action of the Chief Minister was completely contrary to and inconsistent with the constitutional promise of equality and also the preambular resolve of social and economic justice – Therefore, the instructions of the Chief Minister have completely subverted the Rule of Law – Order of the HC affirmed and direction issued that the instruction of the Chief Minister to the Collector had no warrant in law and was unconstitutional and therefore quashed – Appeal dismissed.


Bharat Steel Tubes Limited vs (1) IFCI Limited; (2) Manoranjan Sharma and another  [SUPREME COURT OF INDIA, 30 Nov 2010]

Banking & Finance – Corporate – Recovery of Debts Due to Banks and Financial Institutions Act, 1993, s. 17 – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Recovery proceedings under 2002 Act – Stay – Entitlement -1st respondent/Financial Institution initiated recovery proceedings against the petitioner/Company under the provisions of 2002 Act by obtaining possession certificate from Debt Recovery Tribunal (DRT) for auctioning the property of petitioner – Petitioner filed an application u/s. 17 of the 1993 Act before the DRT to stay the proceedings – DRT stayed the proceedings – 1st respondent filed appeal before the Appellate Tribunal, however, Appellate Tribunal stayed all the proceedings pending before the DRT – Respondent, hence, challenged the Appellate Tribunal order before the HC – HC directed the respondent to proceed in pursuance of the public notice of auction without finalising the bid – Petitioner filed a Special Leave Petition before the SC challenging the HC order – Petitioner contended that petitioner/Company had been recommended for winding up by Board for Industrial and Financial Reconstruction (BIFR) and the Official Liquidator had been appointed and finalization of those proceedings was still pending before the Company Court – SC stayed the operation of HC order, however, respondent allegedly continued with the auction process in violation of the interim order of the SC – Hence the present petition – (A) Whether initiation of action under the provisions of 2002 Act was justifiable in the present case – Held, although the petitioner/Company satisfied with the earlier debts of other creditors, petitioner/Company created a new liability in favour of its new reconstruction entity which assigned its rights to 1st respondent – Therefore, 1st respondent, being a financial institution, which is an assignee of the interest of the reconstruction company of the petitioner, is entitled to recover its dues from petitioner under the provisions of 2002 Act, however, new reconstruction company would be entitled to carry its business of securitization – (B) Whether respondent entitled to proceed with the auction process further – Held, question regarding the auction of the assets of the petitioner/Company is still the subject matter of the proceedings pending before the Appellate Tribunal which had stayed the proceedings before the DRT directing stay of the auction sale proceedings – HC, in the meantime, took note of the fact that the matter was still pending before the Appellate Tribunal and that judgment in the Special Leave Petition before the SC was yet to be passed – HC, therefore, held that nothing survived in the writ petition of the respondent as the parties had to abide by the directions passed by the SC and, accordingly, the writ petition and the applications were disposed of – However, matter before the HC may have come to an end but the issues involved regarding steps taken under the 2002 Act are yet to be determined by the Appellate Tribunal – Therefore, direction issued to the Appellate Tribunal to consider all the questions raised in the appeals pending before it since the HC order impugned in the present proceedings had ceased to exist – Further, till a decision is arrived at by the Appellate Tribunal in the matter, the auction proceedings being conducted under the 2002 Act should remain stayed – Petition disposed of.


(1) Amina Beevi; (2) State Bank of Travancore, Alwaye Branch, Represented by its Branch Manager vs Thachi and others  [SUPREME COURT OF INDIA, 27 Oct 2010]

Land & Property – Banking & Finance – Kerala Land Reforms Act, 1963 – Kerala Land Reforms (Amendment) Act, 1969, s. 13A – Lease hold right – Recovery of possession – Limitation – Original title holder executed an oral lease in favour of erstwhile tenant with respect to the suit property – After the death of original title holder, his wife and children sold the suit property to 1st petitioner – 1st petitioners obtained a loan from 2nd petitioner/Bank by mortgaging the suit property – 1st petitioner failed to repay the loan and as a result, 2nd petitioner/Bank filed a suit and obtained decree for sale of the mortgaged property (suit property) – In the meantime, predecessor-in-interest died and subsequently, his legal heirs (respondent) filed a suit for recovery of possession against petitioners and against the wife and children of original title holder – Trial Court decreed the suit in favour of respondents by holding that the respondents had leasehold right over the suit property and were entitled to recover possession of the suit property from petitioners and were also entitled to mesne profit thereof – Petitioners filed appeals – First Appellate Court dismissed the appeals – Petitioners filed second appeal – HC dismissed second appeals also – Hence the present petition – Whether respondents suit was barred by limitation – Held, any person who has been dispossessed of land under his occupation on or after 1-4-1964 and such person would have been a tenant under the Act as amended by the Kerala Land Reforms (Amendment) Act, 1969 has been provided with a special remedy of restoration of possession of land u/s. 13A of the Act – None of the sub-sections of s. 13A expressly state that a suit by a tenant for recovery of possession of land which was under his occupation was barred – Hence a suit for recovery of possession by respondent is not ‘expressly’ barred – In an earlier proceedings before the Land Tribunal, Land Tribunal also came to the conclusion that the father of the respondents and after him the respondents had leasehold rights over the suit property in the light of the available evidence – Trial Court accepted the findings of the Land Tribunal upholding the leasehold right of respondents – Finding of the Land Tribunal and the Trial Court was based on oral and documentary evidence, therefore, there is no interference called for – No merit – Petition dismissed.


S. N. Prasad vs Monnet Finance Limited and others  [SUPREME COURT OF INDIA, 22 Oct 2010]

Arbitration & ADR – Banking & Finance – Arbitration and Conciliation Act, 1996 – Arbitration agreement – Existence of – (A) Whether a guarantor for a loan, who is not a party to the loan agreement containing the arbitration agreement executed between the lender and borrower, can be made a party to a reference to arbitration in regard to a dispute relating to repayment of such loan and subjected to the arbitration award? – Held, if there is a dispute between a party to an arbitration agreement, with other parties to the arbitration agreement as also non-parties to the arbitration agreement, reference to arbitration or appointment of arbitrator can be only with respect to the parties to the arbitration agreement and not the non-parties – Further, to constitute an arbitration agreement u/s. 7(4)(c) of the Act, a statement of claim containing a specific allegation about the existence of an arbitration agreement by the applicant and ‘non- denial’ thereof by the other party is required – Thus, an arbitration agreement between the lender on the one hand and the borrower and one of the guarantors on the other, cannot be deemed or construed to be an arbitration agreement in respect of another guarantor who was not a party to the arbitration agreement – (B) Words, ‘statements of claim and defence’ occurring in s. 7(4)(c) of the Act – Meaning of – Held, these words are not restricted to the statement of claim and defence filed before the arbitrator – An ‘allegation’ is an assertion or declaration about a fact and also refers to the narration of a transaction – If there is an assertion of existence of an arbitration agreement in any suit, petition or application filed before any court, and if there is no denial thereof in the defence/counter/written statement thereto filed by the other party to such suit, petition or application, then it can be said that there is an “exchange of statements of claim and defence” for the purposes of s. 7(4)(c) of the Act – Further, if in the application filed u/s. 11 of the Act, the applicant asserts the existence of an arbitration agreement with each of the respondents and if the respondents do not deny the said assertion, in their statement of defence, the court can proceed on the basis that there is an arbitration agreement in writing between the parties – Appeals allowed.


(1) Punjab and Sind Bank; (2) Allied Beverage Company Private Limited and others vs (1) Allied Beverage Company Private Limited and others; (2) Punjab and Sind Bank and others  [SUPREME COURT OF INDIA, 01 Oct 2010]

Banking & Finance – Code of Civil Procedure, 1908, s. 34 – Recovery of Debts due to Banks and Financial Institutions Act, 1993, s. 19(20) – Banking Regulation Act, 1949, s. 21A – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Rate of interest – Company approached the Bank and requested for grant of financial facilities in its name – Bank acceded to the request of the company and granted the loan/credit facilities to the Company – Thereafter, the business of the Company suffered a set back and its account with the Bank was declared as Non- performing Assets (NPA) on 31.03.1999 – Bank sent a legal notice to the Directors of the Company, calling them to regularize the account by paying the outstanding dues payable to the Bank along with interest due thereon – Company approached the bank for settlement of accounts, however, the settlement did not materialized – Bank filed an application before the Debt Recovery Tribunal (DRT) for recovery of Rs.1,47,42,616.77 along with pendente lite and future interest – Presiding Officer allowed said application and directed the Company to pay the outstanding amount with pendente lite and future interest @ 18% p.a. with monthly rests – Debt Recovery Appellate Tribunal (DRAT) dismissed appeal filed against said order – Company filed writ petition against said order before HC – HC disposed said writ petition modifying the order in respect of interest to the extent by reducing the pendente lite and future interest to 14% p.a. with annual rests, which would be the simple interest, against the rate of interest @ 18% p.a. with monthly rests, awarded by the DRT – Bank filed appeal against said order submitting that in view of proviso to s. 34(1) CPC, if the liability in relation to the sum adjudged had arisen out of commercial transaction, the rate of such further interest may exceed 6% p.a. but shall not exceed the contractual rate of interest and the bank is entitled to claim interest as per the contract – Whether the HC is justified in reducing the interest @ 18% p.a. with monthly rests to 14% p.a. with 12 monthly rests without appreciating the contractual rate of interest? – Held, In the present case, even the Company agreed for settlement but it was not successful due to financial difficulties and all other circumstances, hence, HC has fairly neutralized the claim of the Bank as well as the sufferings of the Company and passed a workable order by reducing the rate of interest to 14% p.a., which would be simple interest, in respect of period pendente lite and future interest w.e.f. 04.07.2003, the day on which the Bank filed an application before the DRT – Though request was made by the Company for further reduction upto 12% p.a., since it was a commercial transaction and the Bank being a nationalized bank, Court not inclined to accede to their request – Impugned order of the HC upheld – Appeals dismissed.


ICICI Bank Limited vs Official Liquidator of APS Star Industries Limited and others  [SUPREME COURT OF INDIA, 30 Sep 2010]

Banking & Finance – Banking Regulation Act, 1949, ss. 6(1)(a), 6(1)(n), 21 and 35A – Assignment of debts by bank inter se – Whether inter se transfer of Non Performing Assets (NPA) by banks is illegal under 1949 Act? – HC held that assignment of debts by banks inter se is not an activity which is permissible under the 1949 Act and consequently all executed contracts of assignment of debts were illegal – HC also held that the assignee banks were not entitled to substitution in place of original lender (assignor) in proceedings relatable to companies in liquidation pending in the Company Court – Held, 1949 Act basically seeks to regulate banking business – 1949 Act empowers RBI (regulator and policy farmer in mailer of advances and capital adequacy norms) to develop a healthy secondary market, by allowing banks inter se to deal in NPAs in order to clean the balance sheets of the banks which guideline/policy falls u/s. 6(1)(a) r/w s. 6(1)(n) – Therefore, it cannot be said that assignment of debts/NPAs is not an activity permissible under the 1949 Act – Further, when a delegate is empowered by the Parliament to enact a Policy and to issue directions which have a statutory force and when the delegatee (RBI) issues such guidelines (Policy) having statutory force, such guidelines have got to be read as supplement to the provisions of the 1949 Act – Hence, “Banking policy” enunciated by RBI cannot be said to be ultra vires the 1949 Act – Furthermore, test to be applied is whether trading NPAs has the characteristics of a bona fide banking business – Guidelines issued by RBI dated 13.7.2005 itself authorizes banks to deal inter se in NPAs – Impugned guidelines show that RBI considers inter se NPA assignment between banks to be a tool for resolving the issue of NPAs and in the interest of banking policy u/s. 21 of the 1949 Act – Object is to minimize the problem of credit risk – Dealing in NPAs as part of the Credit Appraisal Mechanism and as a part of Restructuring Mechanism falls within s. 21 r/w s. 35A of the 1949 Act – Hence, it cannot be said that “transfer of debts/NPAs” inter se between banks is an activity which is impermissible under the 1949 Act – Impugned judgment set aside on the question of assignment of debts as an activity permissible under the 1949 Act – However, matter remitted back to the HC for consideration of other issues – Appeals allowed.


Common Cause (A Regd. Society) vs Union of India and another  [SUPREME COURT OF INDIA, 18 Aug 2010]

Banking & Finance – Constitution – Constitution of India, art. 32 – Non Performing Assets (NPAs) of nationalised Banks – Failure to recover bad debts – Public Interest Litigation – Petitioner, a Society engaged in taking up various common problems of the people for redressal, alleged that non-recovery of huge amount of NPAs had resulted in substantial funds of banks not being available for development of the country’s economy and that, in turn, had affected the citizens – Petitioner contended that the steps taken by the 1st respondent/Union Government to recover the NPAs had not yielded positive results and the Finance Ministry was reported to have admitted that 27 nationalised banks had written off a staggering amount of crores of rupees as bad debts – Held, petitioner did not make out a case that for enforcement of any right guaranteed under Part-III of the Constitution, writs or directions were required to be issued by SC u/art. 32 of the Constitution – Union Government had already taken some administrative measures such as setting up of ‘Serious Fraud Investigation Office’ (SFIO) and legislative measures such as the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Credit Information Companies (Regulation) Act, 2005 etc. – Respondents affirmed in its affidavit that they would try to reduce the number and amount of NPAs and to detect and check bank frauds in future – Further, whether legislative and administrative measures taken by the 1st respondent are effective or not, is not for the Court but for the 1st respondent and Parliament to consider because reduction and control of NPAs are not within the domain of judiciary but within the domain of the Executive and Legislature under the Constitution of India – Union Government, however, must ensure that SFIO is effective in detecting and preventing bank frauds by influential people – Further, Central Government has constituted a Committee of Experts and such Committee will consider the suggestion to make the SFIO (or any similar body) a statutory authority having sufficient powers and having the required autonomy to be able to effectively deal with the problems of bank frauds and NPAs – Petition disposed of.


Indian Bank vs Blue Jaggers Estates Limited and others  [SUPREME COURT OF INDIA, 09 Aug 2010]

Banking & Finance – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Recovery of Debts Due to Banks and Financial Institutions Act, 1993, s. 19 – Appellant-Bank sanctioned loan to a partnership firm – Respondent No.1 took over the assets and liabilities of said firm – Since the respondents failed to clear the outstanding dues, appellant filed an application u/s. 19 of the DRT Act for recovery which is still pending before Debts Recovery Tribunal – Meanwhile, parties signed Joint Memo of Compromise whereby the appellant agreed to accept an amount of Rs.153.50 lakhs towards full and final settlement of its claim as against the outstanding dues of Rs.661.30 lakhs – Parties also agreed that in case of non-compliance of any of the conditions, O.A. No. 1098 of 1998 shall stand decreed – Although, the respondents did not pay full amount in terms of compromise and as a result of that, the appellant acquired the right to recover all the dues, it signed another compromise with the respondents who undertook to pay the balance amount – Meanwhile, appellant issued two notices u/ss. 13(2) of the Act – Thereafter, Appellant issued notice u/s. 13(4) of the Act for taking possession of the mortgaged properties – Respondents filed an application u/s. 17 of the Act for quashing the proceedings initiated by the appellant u/s. 13 of the Act – Application was dismissed and it was held that the appellant had taken action under the Act because the respondent did not pay the outstanding dues – Tribunal took cognizance of the compromise deeds signed by the parties and observed that the appellant was entitled to recover the outstanding dues because the borrower failed to fulfil its commitment in accordance with the terms of compromise – On appeal, Appellate Tribunal granted interim stay subject to the condition of deposit of Rs.3 crores – Respondents filed Writ Petition for an absolute and unconditional stay of the recovery proceedings, which was dismissed – Special Leave Petition filed thereagainst was also dismissed by SC – Since the respondents did not comply with the order passed by the Appellate Tribunal, the authorised officer of the appellant auctioned some of the mortgaged properties for which bids of Rs.5 crores were received – Thereafter, respondents filed three applications before the Appellate Tribunal for waiver of the requirement of pre-deposit – While dealing with those applications, the Appellate Tribunal suo motu took cognizance of the fact that the notice had been issued to the respondents for recovery of amount required to be deposited in terms of the mandate of second proviso to s. 18(1) and directed them to deposit Rs.4.50 crores – Respondent filed writ petition for quashing said order and another writ Petition for issue of a mandamus to the Tribunal to dispose of application pending with Debts Recovery Tribunal – DB of the HC set aside the second interim order passed by the Appellate Tribunal and also nullified the earlier conditional interim order by declaring that as a result of sale of the property worth Rs.5 crores, the requirement of deposit of Rs.3 crores stands satisfied – Hence, present appeal – Held, interlocutory conditional order passed by the Appellate Tribunal had become final because the respondents’ challenge to that order was negatived by the HC and SC – Therefore, respondents cannot be allowed to indirectly question correctness of that order in the appeal preferred by the appellant against the order passed by the HC in the subsequent writ petition – Further, a reading of earlier order passed Appellate Tribunal makes it clear that the Appellate Tribunal had recorded a specific finding that the appellant was entitled to claim the entire amount, which was due – Reasons assigned by HC for declaring that the requirement of pre-deposit will be deemed to have been satisfied do not stand scrutiny – Impugned order of the HC set aside insofar as it declares that the direction given by the Appellate Tribunal to the respondents to deposit Rs.3 crores stands complied – Appeals disposed of.


K. R. Subbaiah and another vs Indian Bank, Madurai  [SUPREME COURT OF INDIA, 03 Aug 2010]

Banking & Finance – Practice & Procedure – Code of Civil Procedure, 1908, O. 34 r. 11 – Respondent/Bank sued appellant for recovery of a loan advanced to the appellants – Since appellants were absent in the proceedings, Trial Court passed ex-parte decree against appellants – Execution proceedings were transferred to Debt Recovery Tribunal (DRT) – DRT issued recovery certificate in favour of respondent – Appellant filed appeal before the Appellate Tribunal – Appellate Tribunal dismissed appellant’s appeal on the ground of delay – Appellant filed revision before the HC – HC dismissed the revision – Appellant challenged the HC order before SC and in the meantime, paid off a substantial part of due amount to the respondent – Respondent contended that appellant had to pay an interest of 18% p.a. for the rest of outstanding amount – Whether respondent/Bank is entitled to 18% of interest – Held, as per the final decree of the Trial Court, respondent/Bank was entitled to interest prescribed u/O. 34 r. 11 of the CPC – Although recovery certificate issued by the DRT showed that respondent was entitled to 18% interest, statement submitted by the respondent before the SC showed that the interest until the date of the final decree was payable by the appellants at the rate of 18% p.a. and thereafter at the rate of 6% p.a. on due amount – Since the respondent had prepared the statement as per their banking records, they cannot contend that there was an error in the statement with regard to the interest – Therefore, recovery certificate issued by the DRT is set aside and direction issued to the appellant to discharge the outstanding amount to respondent within 15 days as per the statement – Appeal disposed of.


Zonal Manager, Central Bank of India vs Devi Ispat Limited and others  [SUPREME COURT OF INDIA, 30 Jul 2010]

Constitution – Banking & Finance – Contract & Commercial – Constitution of India, 1950, arts. 12 and 226 – Maintainability of writ petition – Respondent-Company was banking with the appellant-Bank – Due to various irregularities in the account of the respondent-Company, the appellant-Bank advised the respondent-Company to shift its loan account to some other Bank – Respondent-Company requested appellant-Bank to handover the original title deeds of its factory premises and all the collateral securities held by it as against the respondent-Company to another Nationalized Bank to whom they had transferred their account – As per contract settlement, the Nationalized Bank issued a Banker’s cheque of Rs. 15 crores to the respondent-Company which the appellant-Bank had encashed and appropriated in lieu of the outstanding balances lying against the respondent-Company – Thereafter, respondent-Company requested appellant-Bank to return Security documents – Respondent-Company filed writ petition which was allowed and appellant-Bank was directed to release the security documents – Appeal filed thereagainst was dismissed – Hence, present appeal – It was submitted that the direction of the Single Judge affirmed by the DB for return of the title deeds deposited by the respondent-Company as a security cannot be a subject-matter of art. 226 of the Constitution – Held, (a) in the contract if there is a clause for arbitration, normally, writ court should not invoke its jurisdiction; (b) the existence of effective alternative remedy provided in the contract itself is a good ground to decline to exercise its extraordinary jurisdiction u/art. 226; and (c) if the instrumentality of the State acts contrary to the public good, public interest, unfairly, unjustly, unreasonably discriminatory and violative of art. 14 of the Constitution in its contractual or statutory obligation, writ petition would be maintainable – However, a legal right must exist and corresponding legal duty on the part of the State and if any action on the part of the State is wholly unfair or arbitrary, writ courts can exercise their power – In present case, appellant-Bank, being a public sector Bank, discharging public functions is “State” u/art. 12 – In view of the settlement of the dues on the date of filing of the writ petition by arrangement made through another Nationalized Bank and the statement of accounts furnished by the appellant-Bank subsequent to the same is nil outstanding, HC was fully justified in issuing a writ of mandamus for return of its title deeds – Appeal dismissed.


United Bank of India vs Satyawati Tondon and others  [SUPREME COURT OF INDIA, 26 Jul 2010]

Banking & Finance – Constitution of India, 1950, art. 226 – Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ss. 13, 14 and 17 – Appellant sanctioned a term loan in favour of respondent No.2 – Respondent No.1 gave guarantee for repayment of the loan and mortgaged her property and executed agreement of guarantee making herself liable for repayment of the loan amount with interest – However, respondent did not repay the amount – Appellant issued notice to respondent Nos.1 and 2 u/s. 13(2) of the SARFAESI Act requiring them to pay – Thereafter, appellant filed an application u/s. 14 of the SARFAESI Act, which was allowed by District Magistrate – Thereafter, the appellant issued notice to respondent Nos.1 and 2 u/s. 13(4) of the SARFAESI Act – Respondent No.1 filed writ petition and prayed that the appellant may be restrained from taking coercive action in pursuance of the notices issued u/s. 13(2) and (4) – Appellant contended that writ petition was liable to be dismissed because an alternative remedy is available to the respondent u/s. 17 of the SARFAESI Act – HC passed the impugned order restraining the appellant from taking action in furtherance of notice issued u/s. 13(4) of the SARFAESI Act – Present appeal – Whether HC was justified in restraining the appellant from proceeding u/s. 13(4) of the SARFAESI Act against the property of respondent No.1? – Held, in view of law laid down by SC in State Bank of India v. M/s. Indexport Registered and others 1992 INDLAW SC 1185, wherein it was held that the decree-holder bank can execute the decree against the guarantor without proceeding against the principal borrower, HC completely misdirected itself in assuming that the appellant could not have initiated action against respondent No.1 without making efforts for recovery of its dues from the respondent No.2 (borrower) – Further, remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective – HC overlooked the settled law that the HC will ordinarily not entertain a petition u/art. 226 of the Constitution if an effective remedy is available to the aggrieved person – HC erred by entertaining writ petition of respondent No.1 – Impugned order set aside – Appeal allowed.


Managing Director, Maharashtra State Financial Corporation and others vs Sanjay Shankarsa Mamarde  [SUPREME COURT OF INDIA, 09 Jul 2010]

Consumer Protection – Banking & Finance – Consumer Protection Act, 1986, s. 2 and 23 – Deficiency of service – Complainant approached the Corporation for sanction of loan for his hotel project – Loan proposal was approved and accordingly, a sanction letter along with terms and conditions of the loan was issued to the complainant – It was also agreed that Corporation would disburse to the complainant a loan of Rs.30 lakhs in instalments on complainant’s furnishing the progress report of the project – First instalment of the loan was released by the Corporation to the complainant – Complainant issued a cheque towards up-front fees to the Corporation which was dishonoured – Despite the fact that the complainant had failed to submit complete documents, second instalment was released to him – However, as complainant failed to furnish the progress report and also failed to discharge his liability towards interest, as demanded from him from time to time, the corporation did not release further instalments of the loan sanctioned to the complainant and informed the complainant that the entire balance unavailed term loan had been treated as cancelled – Complainant approached National Consumer Disputes Redressal Commission (Commission) – Commission accepted the complaint and concluded that there was no justifiable ground for the Corporation to deny disbursement of loan to the complainant – According to the Commission, having sanctioned the loan and then stopping its disbursement without any cause amounted to deficiency in service on the part of the Corporation – Being aggrieved by the award of compensation, present appeal – Whether the Commission was correct in holding that there has been deficiency in service provided by the Corporation to the complainant on account of their failure to release the balance loan amount? – Held Corporation was constrained not to release the balance instalments and recall the loan on account of stated defaults on the part of the complainant himself – Non release of loan amount was not because of any deficiency on the part of the Corporation but due to complainant’s conduct and therefore, the failure of the Corporation to render ‘service’ could not be held to give rise to claim for recovery of any amount under the Act – There was no deficiency in the service the Corporation was required to provide to the complainant – Order passed by the Commission set aside – Appeal allowed.


Central Bank of India vs Asian Global Limited and others  [SUPREME COURT OF INDIA, 06 Jul 2010]

Banking & Finance – Criminal – Practice & Procedure – Negotiable Instruments Act, 1881, ss. 138, 139 – Code of Criminal Procedure, 1973, ss. 245(2), 482 – Discharge petition – Sustainability – 1st respondent/Company availed packing credit facility and overdraft facility from petitioner/bank on the basis of the corporate guarantee offered by the 3rd respondent/Company – Petitioner called upon the 1st respondent/Company to regularize the due amount – 3rd respondent issued three cheques in favour of 1st respondent which was deposited by the 1st respondent with the petitioner/Bank towards the outstanding dues of 1st respondent – Cheques were dishonoured due to insufficient funds in the accounts – Petitioner filed a criminal complaint against the Directors of the 1st and 3rd respondent/Companies u/s. 138 of the Act – Trial Court issued summons to respondents, however, respondents moved an application u/s. 245(2) of the CrPC to recall the summons – Trial Court dismissed respondents petition – Respondents filed discharge petition u/s. 482 of CrPC before the HC for quashing the criminal proceedings – HC allowed respondents’ petition and quashed the criminal proceedings against the respondents – Held, for launching a prosecution against the Directors of a Company u/s. 138 r/w s. 141 of the Act, there had to be a specific allegation in the complaint in regard to the part played by them in the transaction in question – No specific allegation has been made against the respondent/Directors that they were responsible and liable for the acts of the 1st and 3rd respondent/Companies – HC, therefore, rightly held that in the absence of any specific charge against the Respondents, the complaint was liable to be quashed and the respondents were liable to be discharged – No interference called for – Petition dismissed.

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