SAMRAT SPINNERS LIMITED Vs. ANDHRA BANK
LAWS(DR)-2003-7-4
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on July 08,2003

Appellant
VERSUS
Respondents

JUDGEMENT

Mrs. Justice A. Subbulakshmy, Chairperson - (1.)AGGRIEVED against the order passed by the PO, DRT, Hyderabad, appointing Shri M.R.S. Appa Rao, Recovery Officer of the Tribunal and Mr. Mohd. Ubedullah, Advocate, as joint Receivers and directing them to take possession of the properties of the appellant Unit and sell the same by way of public auction and remit the sale proceeds into the Tribunal to the credit of the OA, the appellant has come forward with this appeal.
(2.)Counsel for the appellant submits that the appellant is now willing to run the factory and the appellant may be permitted to run the Mill and the order passed by the PO, DRT, is liable to be set aside. He further submitted that the matter is also pending before the BIFR. The Company made reference to the BIFR on 27.9.2002 after passing of the order by PO, DRT. Counsel for the respondent Bank submits that it is not the case of the appellant that only after the Spinning Mill was taken over possession by the Receiver the Spinning Mill is not working, even prior to the appointment of Receivers the Spinning Mill was not working and the appellant was not at all running the Spinning Mill. Counsel for the respondent Bank relies upon the letter written by the appellant dated 11.3.2002. The appointment of Receivers was made by Order dated 13.8.2002. Even prior to that in March, 2002 the appellant has written to the Bank stating that the Unit is not functioning for the last couple of months due to non-availability of advances in the market and the Company could not pay salaries, staff and officers are not reporting for duties and even the Company could not pay salaries to the security staff and the bills of security agency and so it is becoming very difficult to safeguard the property of the Company located at Shabhashpally, Medak District, Andhra Pradesh, i.e. the subject matter of the property in this appeal. It is further stated by the appellant in the above said letter that moreover the said property is charged to the financial institution and Bank and as the Andhra Bank is one of the major charge holders and approached the Court for recovery of advances made to the Company, the appellant requests the Andhra Bank to take charge of the security of the Unit at Shabhashpally, Medak District, immediately to safeguard the property. It is also written in that letter requesting the Andhra Bank to depute security personnel immediately to safeguard the property.
The appellant again wrote another letter dated 28.3.2002 to the Andhra Bank stating that the Industrial Development Bank of India (IDBI) has also granted loan to that Mill and the IDBI is holding first charge and the balance outstanding in their account is about Rs. 75 lakhs and the outstanding balance due to the Andhra Bank is about Rs. 733 lakhs and as the amount due to the Andhra Bank is greater than that of IDBI in many folds, the appellant again requests the Andhra Bank to look into the matter and take charge of the security of the Spinning Mill. The appellant on his own accord wrote those two letters to the Andhra Bank to take possession of the secured property stating that the appellant is unable to run the factory. The explanation given by the Counsel for the appellant for these letters is that at that time there was some strike in the factory and due to unrest of the labourers the factory could not run and at this juncture those letters were written to the Andhra Bank. The explanation is not an acceptable one. The appellant has clearly written to the Bank stating that the appellant is not in a position to run the factory and it is also not in a position to pay the salaries to staff and practically it is impossible for the appellant to run the factory and he has asked the Andhra Bank to take charge of the security of this Unit namely, the Spinning Mill involved in this appeal.

(3.)COUNSEL for the appellant further submitted that the Andhra Bank itself wrote letter to the appellant expressing their inability to take possession of that Spinning Mill. The Andhra Bank sent reply on 15.3.2002 to the appellant stating that the Unit was originally charged to the IDBI and the Andhra Bank is holding a second charge and as such they expressed their inability to take any action in that matter and advised the appellant to approach the IDBI for further course of action, Again the Andhra Bank wrote letter dated 8.4.2002 to the appellant stating that they already advised the appellant to contact IDBI by letter dated 15.3.2002 as they are the 1st charge holders over the said property. It is further stated in that letter that as owners of the property the appellant is primarily and solely responsible for the preservation and protection of the property and if any loss is caused or the value of the property secured to the Bank is diminished by any commission or omission on the part of the appellant, the appellant is fully responsible for the same.


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