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TMI Blog2018 (7) TMI 2055X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed the M.A filed by the petitioner company. The petitioner company had challenged the order dated 11.04.2013 passed by the Debt Recovery Tribunal in M.A.No.142 of 2012 in O.A.No.243 of 2007. 2. The case of the petitioner company is that the petitioner company is an Asset Reconstruction Company Limited (herein after referred to as ARCIL), who seems to have executed a trust deed dated 29.03.2008 for the benefit of the holders of the secured receipts issued by the trustee therein. The petitioner company further claims that it is a Securitisation Asset Reconstruction Company registered with the Reserve Bank of India as per the provisions of Section 3 of the Securitisation and Assets Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after referred to as 'SARFAESI Act'). 3. The petitioner states in its affidavit filed in support of the Writ Petition that it has entered into an Assignment Agreement dated 31.03.2008 document No.7399 of 2008 at Sub Registrar Office, Ambattur, with M/s. Bank of India, 15th respondent herein, who had unconditionally and irrevocably assigned, transferred and released in favour of the petitioner company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enter into an agreement with M/s.PPL for assignment of debt of the sixth respondent herein, upon payment of the entire consideration for assignment of debt. 7. The further contention of the petitioner company is that as if M/s.PPL failed to pay entire purchase consideration to the petitioner company, the petitioner company shall forfeit and appropriate the money received till the date of default without any reference to M/s.PPL and M/s.PPL shall loose all its right, title, interest including right to acquire financial assets pertaining to the sixth respondent. 8. The petitioner further claims that it had communicated the above said agreement with M/s.PPL during the meeting of consortium banks held on 27.07.2009 and the petitioner claimed that it had entered into an Agreement to Assign with M/s.PPL, only after duly intimating all the consortium members against which nobody raised their objection during such meeting. However, the petitioner claims that it had not assigned its dues pertaining to the sixth respondent to M/s.PPL as M/s.PPL had not kept its promise and failed to pay the entire purchase consideration, as agreed, in the terms of agreement to assign and consequently, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under a contract, B owes C 1,000 rupees, B orders A to credit C with 1,000 rupees in his books, but C does not assent to the agreement. B still owes C 1,000 rupees, and no new contract has been entered into." 11. While that being the scenario, since the sixth respondent has committed default in repayment of the outstanding dues, the respondent banks 3, 4, 5, 15 and 16 together filed O.A.No.243 of 2007 before the Debt Recovery Tribunal-I, Chennai for recovery of Rs. 87,72,82,921/- (Rupees eighty seven crores seventy two lakhs eighty two thousand nine hundred and twenty one only) in the year 2007 and further interest thereon. During the pendency of the above O.A, the 15th and 16th respondent banks had assigned their share of debt to the petitioner company in the year 2008. When that being so, the petitioner company has taken over the Agreement of Assignment of debts of the sixth respondent towards 15th and 16th respondent bank, whereas the petitioner company had filed a Substitution Application in M.A.No.142 of 2012 in O.A.No.243 of 2007, in order to substitute itself in the place of the 15th and 16th respondent banks in the O.A. 12. The petitioner company further claims that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Debt Recovery Appellate Tribunal and Debt Recovery Tribunal have failed to appreciate that the petitioner company, being an assignment holder of the debts due by the sixth respondent towards 15th and 16th respondent banks, had every right to be substituted by virtue of the Assignment Agreement entered into between the petitioner company and the 15th and 16th respondent banks. 17. The fifth respondent has also filed a counter affidavit, on behalf of the respondents 3, 4 and 5, in which it is submitted that the sixth respondent company had availed credit facilities from the consortium of banks, consisting of respondents 3, 4, 5, 15 and 16. In view of the default committed by the borrower company in repaying the loan, the consortium of banks initiated legal proceedings in O.A.No.243 of 2007 on the file of Debt Recovery Tribunal, at Chennai, for recovery of the above dues. 18. The fifth respondent further claimed that during the year 2008, both the 15th and 16th respondent banks had assigned their debts in favour of the petitioner company and in view of the said assignment, 15th and 16th respondent banks went out of the consortium of banks. Though the petitioner being the assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Intending Assignee has to complete the entire transaction within a period of 36 months from the date of this agreement. (III) In case, the Intending Assignee fails to remit the Purchase Consideration on or before the stipulated date as mentioned in Schedule I and / or in terms of clause II above, the Intending Assignor shall be entitled to forfeit and appropriate all the monies paid till the date of default without any reference to the Intending Assignee and the Intending Assignee shall lose all the rights, interest and title on the Financing Documents and the Financial Assets as well as the right to acquire and all whatsoever assignable rights the Intending Assignor had agreed to assign and transfer to the Intending Assignee by virtue of this agreement. Before exercising the right contained in this clause, the Intending Assignor shall give to the Intending Assignee a 30 days notice in writing for making the payment in default. IV. The parties agree that the Intending Assignor shall also have the right to proceed legally against the Intending Assignee for specific performance of this contract including for all costs, damages and compensation and to pay all liquidated da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with such bank or financial institution for the transfer of such financial assets to such company on such terms and conditions as may be agreed upon between them. (2) If the bank or financial institution is a lender in relation to any financial assets acquired under sub-section (1) by the securitisation company or the reconstruction company, such securitisation company or reconstruction company shall, on such acquisition, be deemed to be the lender and all the rights of such bank or financial institution shall vest in such company in relation to such financial assets. (3) Unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powers-of-attorney, grants of legal representation, permissions, approvals, consents or no-objections under any law or otherwise and other instruments of whatever nature which relate to the said financial asset and which are subsisting or having effect immediately before the acquisition of financial asset under sub-section (1) and to which the concerned bank or financial institution is a party or which are in favour of such bank or financial institution shall, after the acquisition of the financial assets, be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n July 2010, but had not whispered anywhere in the affidavit about the association with M/s.PPL, to which the petitioner company had entered into an agreement on 29.07.2009 itself for assigning the dues pertaining to the 6th respondent company towards 15th and 16th respondents herein. Only it came to light from the counter filed by the banks before the Tribunal that the petitioner company had further assigned the secured debts in favour of the third party ie., M/s.PPL. The Debt Recovery Tribunal dismissed the said application on the ground that the petitioner company, which had assigned the debts to M/s.PPL, cannot maintain the application before the Tribunal as the said M/s.PPL will not come under the provision of Banking and Financial Institutions and held that the application filed by the proposed applicant in M.A.No.142 of 2012 is not maintainable in view of the further assignment made in favour of the company and the petitioner company has to pursue its remedy and rights elsewhere and accordingly, the applicants 2,4 and 5 will contest the matter. 28. The learned counsel for the petitioner urged upon this Court that only with the concurrence of the consortium of banks held on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot fulfil the terms and conditions, the petitioner company till date, has not assigned its dues pertaining to the sixth respondent, as M/s.PPL failed to pay the entire purchase consideration, as agreed in terms of the agreement as stated supra in clause 6 (c) of Agreement to Assign and consequently, the petitioner had terminated and revoked the said Agreement to Assign dated 13.03.2013. 31. The learned counsel for the petitioner company also would contend that it is not an Assignment, but it is simply an Agreement for Assignment. 32. On the aspect as to whether the further assignment made in favour of M/s.PPL by the petitioner company, whether the same was in force or not, it is clear from the records that at the time of pendency of M.A.No.142 of 2012, the same assignment was in force. Suppressing the same, without informing the respondents 3, 4, 5, 15 and 16, petitioner company has filed the case before the Tribunal, which cannot be accepted. We do not find any infirmity to set aside the order passed by the Debt Recovery Appellate Tribunal, who had confirmed the order passed by Debt Recovery Tribunal as early as on 11.04.2013. The petitioner company cannot blow hot and cold, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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