INDUSTRIAL DEVELOPMENT BANK OF INDIA Vs. EMPEE SUGARS AND CHEMICALS LTD
LAWS(DR)-2003-3-6
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on March 28,2003

Appellant
VERSUS
Respondents

JUDGEMENT

A.Subbulakshmy, - (1.)THE Industrial Development Bank of India (IDBI) filed IA-1129/2000 before DRT, Chennai, to pass garnishee Order directing the garnishee TASMAC not to pay the amount to Empee Distilleries Ltd. Empee Distilleries is the guarantor for the borrower M/s. Empee Sugar and Chemicals Ltd. For the outstanding due, the IDBI filed this IA for garnishee Order Exparte Order was originally passed by the DRT, Chennai, directing the garnishee TASMAC not to pay the amount to Empee Distilleries. THE defendant Empee Distilleries filed IA-1229/2000 to vacate the garnishee Order. THE PO, DRT passed a modified Order on 30.5.2000 directing the Empee Distilleries to pay Rs. 10 lakhs every month to the Bank. Appeal was preferred by the IDBI as against that Order, in MA-54/2000 and this Appellate Tribunal disposed of that appeal on 6.10.2000 directing to PO, DRT, to pass a well considered Order. THEn, IAs 1 and 2/2000 in MA-54/ 2000 were filed by the Empee Distilleries to modify DRAT's Order dated 6.10.2000. In MA-54/2000 the matter was compromised before the DRAT and a Joint Consent Memo was filed. As per this Joint Consent Memo, the Empee Distilleries will have to pay Rs. 40 lakhs every month to the IDBI and in case of default the Order passed by the PO, ,DRT, dated 31.3.2000 will revive. Admittedly, the Empee Distilleries did not pay that amount as per the joint Consent Memo and defaulted.
(2.)Then, Contempt Application was filed by IDBI before this Appellate Tribunal and this Appellate Tribunal passed Order holding that no contempt has been committed but the applicant Bank can always invoke the default clause in case of default. Then, the Empee Distilleries filed IA-33/2002 before DRT-1, Chennai, for directing the IDBI to withdraw letter dated 2.1.2002 and to direct the garnishee not to garnish any amount till IA-1229/2000 is finally disposed of. That IA-33/2002 was disposed of and the PO, DRT-I, dismissed that petition. While disposing of IA-33/2002, IA-1129/2000 on which Joint Consent Memo Order was passed by this Appellate Tribunal, was also taken by the PO, DRT-I, and he has modified that Order. The PO, DRT-I, also passed some interim Orders on 9.1.2002 and 27.6.2002.
Counsel for the IDBI submitted that since Empee Distilleries did not act as per the Order passed by the Appellate Tribunal on the Consent Memo filed, there is default on the part of Empee Distilleries and as per the Orders passed by the DRAT, the Order passed by the PO, DRT, dated 31.3.2000 was revived and the garnishee must be directed not to pay the amount to the Empee Distilleries. Counsel for the Empee Distilleries pointed out that even though money is lying with the garnishee, the Empee Distilleries will have to meet the expenditure of wages to workers and the Sales Tax and other revenue dues and thus the amount lying with the garnishee cannot be directed to be given to the Bank in entirety and the Empee Distilleries will have to discharge the statutory obligations. He further pointed out that there is arrears of Sales Tax for a sum of Rs. 3 crores which being a statutory liability, the entire amount lying with the garnishee cannot be deposited with the IDBI and only if the wages are paid and sales tax is paid, the Empee Distilleries can further run the Company and so the entire amount lying with the garnishee cannot be deposited with the Bank.

(3.)IN MA-54/2000, this Appellate Forum has passed Order on the Consent Memo. After an Order has been passed by the Appellate Forum, it is no longer open for the PO, DRT-I, to pass any modified Order in respect of the same petition. It is significant to note that the parties agreed for the compromise and Empee Distilleries on the Consent Memo agreed to pay Rs. 40 lakhs to the IDBI every month with effect from 1.11.2000 till a settlement is arrived at between the principal debtor the Empee Sugars and Chemicals and the IDBI or until the disposal of the OA whichever is earlier. Having agreed for such Consent Memo, the Empee Distilleries must pay that amount to the Bank and in case of default, the default clause has to be invoked i.e. the Order passed by the PO, DRT, dated 31.3.2000 will revive and be in full force.


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