9911796707
TMI Blog2000 (7) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... s its registered office at Aluva, Kerala and a branch office at Andheri, Bombay. Vision Technology India Ltd., is a company incorporated under the provisions of the Companies Act. It is arrayed as third respondent in the petition. The fourth respondent Vasanth Color Laboratories Ltd. is also a registered company registered under the provisions of the Compa-nies Act, 1956. Respondent Nos. 5 to 7 in the writ petition were directors of both the third and fourth respondent-companies. The petitioner-co-operative bank was before this Court primarily aggrieved by the permi-ssion granted by the first respondent to the third respondent-company to the public issue of 30 lakh equity shares of Rs. 10 each for cash at par aggregating to Rs. 3 crores on the basis of the prospectus issued by the third respondent-company. The public issue was to open on 23-2-1994. In the petition, it was asserted that the third respondent-company while publishing the prospectus for issue of the equity shares, it has advertised that the third respondent-company has taken physical possession of the fourth respondent-company with the permission of respondent Nos. 4 to 7 who were all directors of the fourth respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o go ahead with the public issue of its equity shares. Insofar as the second respondent is concerned, it is stated that he is an officer of the Central Government and who is the authority vested and vast powers under the provisions of the Companies Act to prevent any fraud or deception being practised upon the members of the general public by companies by misleading them either by suppressing material facts or by giving a false picture of the true state of affairs of companies and also failed to take appropriate action against respondent Nos. 3 to 7 and effectively deal with them to safeguard the interests of the public. With these averments and allegations the petitioner in the writ petition had sought for a direction directing the first and second respondents to revoke the consent given to the public issue of 30 lakh equity shares of Rs. 10 each for cash at par aggregating to Rs. 3 crores by the third respondent-company on the basis of the prospectus produced along with the writ petition. The second prayer that was sought for is to direct respondent Nos. 1 and 2 to initiate appropriate action against respondent Nos. 3 to 7 by exercising the statutory powers vested in them for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the petitioner Sri Ramdas and Sri S.P. Shankar, counsel for R-3 to R-7 have moved the court on the ground that the matter is very urgent and they want the writ petition itself to be disposed of since some settlement has been arrived at subsequent to the interim order that was granted and now respondent Nos. 3 to 7 have filed an application mentioning certain terms which are almost in the nature of granting relief to the petitioner which is sought in the writ petition. As requested, the case is taken up today. Counsel for the petitioner requests that he may be permitted to delete R-1 and R-2. Permission granted. He is permitted to delete R-1 and R-2. Counsel for R-3 to R-7 Sri S.P. Shankar files an application seeking modification of interim order that was granted yesterday. Sri Ramdas submits that he is in receipt of the said application." The conditions imposed and reliefs sought in the applications read as follows : "2. Without going into the controversy of facts or law set out in the writ petition, it is prayed that the stay order may be modified for the following reasons : ( a )Without admitting the correctness of the claim of the petitioner-bank and without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vision Technology India Ltd., will be perfectly entitled to receive the net amounts collected in excess of the bridge loan and interest due thereon to satisfy the alleged dues. The co-operative bank was not satisfied with the reply so filed by the Federal Bank. Therefore, through their learned counsel they issued a notice dated 1-5-1994, and in that, apart from others they have stated as under : "In the above circumstances, your denial of your liability to earmark a sum of Rs. 65 lakhs out of the proceeds of the issue for payment towards the liability of Vasanth Color Laboratories Ltd., to my client as ordered by the High Court in the writ petition to which your constituent VTIL was a party and which is binding on you is untenable in law. I hereby call upon you to confirm to me or to my client within ten days from today that you have duly complied with the order of the High Court and that you have earmarked the amount to the extent of Rs. 675 lakhs and are holding the same for eventual payment to my client. My client sincerely hopes that as a sister bank you will not unnecessarily complicate the matter." This was again replied to by the petitioner-Federal Bank by its letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Vision Technology India Ltd. That loan was granted by the petitioner-Federal Bank in view of the communication it had received from the several bankers such as Bank of Baroda, State Bank of India, Punjab National Bank, Allahabad Bank, Bank of Madura Ltd., The Karur Vysya Bank Ltd., The Catholic Syrian Bank Ltd., The lead managers to the issue were Vatsa Finance Ltd., and Inter-Corporate Financiers Consultants Ltd. While granting this bridge loan, the second-respondent herein had specifically agreed for discharge of its liability within four months from the date of receipt of the amounts. An agreement to that effect had been entered into by the second-respondent with the petitioner-Federal Bank and that document is produced by the petitioner-Federal Bank before this Court as Annexure B to the writ petition. The bankers to the issue, namely, the State Bank of India, Bank of Baroda and others had informed the petitioner-Federal Bank that they are all principal bankers to the issue and they will reimburse the bridge loan and interest, if any, due thereon to the petitioner-bank immediately on receipt of the intimation of allotment of shares and that they would not wait for any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the said order. In support of these contentions, the learned counsel firstly invites my attention to the observations made by the Supreme Court in the case of Shivdeo Singh v. State of Punjab AIR 1963 SC 1909, to contend that this Court in exercise of its inherent powers can review an order made by this Court under article 226. The learned counsel also invites my attention to the observations made by the Apex Court in the case of United India Insurance Co. Ltd. v. Rajendra Singh [2000] 100 Comp. Cas. 705. 10. Per contra , Shri Ramdas, the learned counsel appearing for the respondents submits that since the relationship of the petitioner-Federal Bank with that of the third respondent-company is that of creditor and debtor and also the agent of the respondent-company, it cannot be heard to say that they should have been impleaded as one of the parties to the lis and they should have been heard in the matter. Secondly, the learned counsel would submit that, if for any reason, the petitioner-Federal Bank is aggrieved by the orders made by this Court on 23-2-1994, they should agitate the matter by filing an appeal for appropriate reliefs and not by way of a writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when circumstances of a substantial and compelling character make it necessary to do so." (p. 216) The court was further pleased to observe : "But whatever be the nature of the proceeding, it is beyond dispute that a review proceeding cannot be equated with the original hearing of the case, and the finality of the judgment delivered by the court will not be reconsidered except where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility ." [Emphasis Supplied] (p.217) 13. The Supreme Court in the case of A.R. Antulay v. R.S. Nayak AIR 1988 SC 1531, was pleased to observe as under : "... that the fundamentals of administration of justice demand that no man should suffer because of the mistake of the court, and if this had been done, the wrong must be remedied so long as it is within the human machinery of administration of justice. So once it is realised that a mistake had been committed, it would not only be appropriate but also the duty of the court to rectify the mistake ." [Emphasis Supplied]. 14. The Apex Court in the case of United India Insurance Co. Ltd. ( supra ) was pleased to observe as under : Fraud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner-co-operative bank was as stated earlier, the co-operative bank becomes wiser after service of notice on the respondents and to suit its convenience the petitioner-co-operative bank deletes respondent Nos. 1 and 2 against whom the main prayers were sought in the writ petition. The understanding between the petitioner-co-operative bank and respondent Nos. 3 to 7 is in the nature of a consent order for attachment before judgment of the liabilities of the third respondent-company to the petitioner-bank. A plain reading of the order made by this Court gives a clear indication to that effect. This Court while disposing of the writ petition, on the memo filed by respondent Nos. 3 to 7 to which memo the petitioner was also a party, clearly indicates that respondent Nos. 3 to 7 therein have no objection earmarking a sum of Rs. 65 lakhs for payment of the exact amount due to the petitioner-co-operative bank immediately after the closure of the issue. Further, they had agreed for issue of appropriate directions to the lead managers of the third respondent-company to pay subject to proof of accuracy of the claim of the petitioner-co-operative bank out of the amounts earmarked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he asserts that the Federal Bank Ltd., was not a necessary party at least for the disposal of the application filed by respondent Nos. 3 to 7. The learned counsel submits that the petitioner has an alternate remedy by way of an appeal before this Court against the order made by this Court. Therefore, this Court should decline to exercise its writ jurisdiction under article 226. In my opinion, in view of the observations made by the Supreme Court in the case of Shivdeo Singh ( supra ), Northern India Caterers (India) Ltd. ( supra ) and A.R. Antulay ( supra ), as well as in United India Insurance Co. Ltd. s case ( supra ) that contention of the learned counsel for the respondents has no merit whatsoever. Therefore, once it realizes that a mistake has been committed and a grave error has crept in, in an earlier order by judicial fallibility, this Court in my opinion can entertain a writ petition and review its earlier order to prevent miscarriage of justice and correct palpable errors committed by it. Therefore, the said contention is rejected. 19. The learned counsel also contends that there is delay and laches on the part of the petitioner-Federal Bank in approachi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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