Bombay HC Imposes Cost Of Rs 50K On Petitioner Firm For Abuse of Law By Filing Multiple Proceedings On Similar Grounds [Read Judgment]

The Bombay High Court on Friday imposed a cost of Rs 50,000 on Vibagyor Texotech for filing multiple proceedings before different forums on similar grounds, thereby, abusing the process of law. The company owes Rs 53.46 crores to the State Bank of India.

A division bench of Justice KK Tated and Justice SK Shinde was hearing a writ petition filed by Vibagyor challenging a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, wherein possession of its property in Vasai, Palghar district, was scheduled to be taken by the bank.

The court cautioned the petitioner company that if the cost is not deposited within a month, then it would be recovered as arrears of land revenue under the Maharashtra Land Revenue Code, 1966.

Case Background

Vibagyor Texotech filed the said writ petition seeking a declaration that “no amount is due to the respondent bank (SBI); that the bank has no more enforceable right against the petitioner, since on account of breach of contract, culpable negligence, customer-unfriendly attitude and malicious actions on the part of the bank has resulted in huge loss to the petitioner”.

The petitioner company contended that it is entitled to a judicial forum for adjudication of its inter-se disputes with the respondent-bank and till then is entitled to be protected against the powers vested in the bank/secured creditor.

On June 5, 2018, the petitioner company had sought interim relief. However, when petitioner’s lawyer Mathew Nedumpara was asked by the high court whether his client was willing to deposit 50 per cent of the sum total owed, the company’s representative who was giving instructions to Nedumpara was not traceable. As a result, interim relief was denied.

Judgment

The court observed that the Executive Magistrate passed an order under Section 14 of the SARFAESI Act on  March 16, 2017, and further directed Tehsildar, Vasai, to take possession of the said building owned by the petitioner company. Thereafter, impugned notice scheduling possession of the property was issued.

“It appears from pleadings and compilation of documents filed by respondents (of multiple proceedings) that the Petitioner herein made each and every attempt to stall the recovery of dues by adopting multiple proceedings.

He has filed Securitisation Appeal No.4 of 2012 and challenged the notice dated 3.8.2011 issued under Section 13(2) and notice dated 4.11.2011 issued under Section 13(4) of the said Act on several grounds. Admittedly, the said appeal is still pending before the DRT. It may be stated that in the said appeal, the Petitioner has claimed compensation and damages in sum of Rs.100 Crores from the bank for breach of contract and malicious act at the hands of the Respondent­ bank.“

Appearing on behalf of the SBI, Rohit Gupta submitted that the company had filed a similar petition before the high court with similar prayers challenging notice under the SARFAESI Act in 2015. Another bench had imposed a cost of Rs 50,000 on the company for abuse of process of court.

The bench concluded that the petitioner company had filed multiple proceedings which were not bona fide in nature. The court said:

“Multiple proceedings would also show that the Petitioner had set up M/s. Pravin Wipers and Ancilliaries Pvt. Ltd. to obstruct the proceedings by claiming tenancy qua secured assets. However, all suit proceedings filed by so-called tenant were dismissed throughout. We, therefore, hold and conclude that the Petitioner has filed and initiated various proceedings itself or through some other persons, are/were not bonafide in nature. Though the Petitioner has exhausted alternative remedy by filing Securitisation Appeal No.4 of 2012, he has chosen to file this Writ Petition before this Court invoking the extra­ordinary jurisdiction of this Court under Article 226 of the Constitution of India. Thus, in our considered view, instant Writ Petition is nothing but abuse of process of law.”