M/s Kut Energy Pvt. Ltd. & Ors. vs The Authorized Officer, Punjab National Bank, Large Corporate Branch, Ludhiana & Ors.

Court

Supreme Court of India

Date

20 August 2019

Case No.

Civil Appeal Nos. 6016-6017 of 2019

Result

Allowed

Bench

Uday Umesh Lalit, Vineet Saran

Citation

[2019] 10 S.C.R. 736 : 2019 INSC 928

Headnote

Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002: s. 13(2) – Security interest – Enforcement of, in favour of secured creditor – Held: ‘Secured creditor’ would be entitled to proceed only against the ‘secured assets’ mentioned in the notice u/s. 13(2) – On facts, in loan settlement, debtor deposited Rs.40 crores in terms of the order of the High Court only to show his bona fides when a revised offer was made by them – Deposit was not towards satisfaction of the debt in question and that is why the High Court had directed that the deposit would be treated to be a deposit in the Registry of the High Court – Thus, the debtor entitled to withdraw the sum deposited by them in terms of said order – Claim of the debtor cannot be negated by any direction that the money may continue to be in deposit with the Bank – Thus, the amount deposited by debtor to be returned to them.

Allowing the appeals, the Court

HELD: 1.1 In the instant case the deposit of Rs.40 crores in terms of the order of the High Court on 11.10.2017 was only to show the bona fides of the appellants when a revised offer was made by them. The deposit was not towards satisfaction of the debt in question and that is precisely why the High Court had directed that the deposit would be treated to be a deposit in the Registry of the High Court. [Para 11] [744-H; 745-A]

1.2 Going by the law laid down by this Court in Axis Bank’s case, the ‘secured creditor’ would be entitled to proceed only against the ‘secured assets’ mentioned in the notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets LARGE CORP. BRANCH, LUDHIANA

and Enforcement of Securities Interest Act, 2002. On the strength of the law laid down, the appellants are entitled to withdraw the sum deposited by them in terms of said order dated 11.10.2017. Their entitlement having been established, the claim of the appellants cannot be negated by any direction that the money may continue to be in deposit with the Bank. The judgment and order passed by the High Court is set aside, and CMP No.5386 of 2018 preferred by the appellants is allowed and the amount deposited by the appellants in terms of the order dated 11.10.2017 is directed be returned to them within two weeks along with interest, if any, accrued thereon. [Para 11, 12] [745-B; D-E]

The Judgment of the Court was delivered by UDAY UMESH LALIT, J. 1. These appeals arise out of the judgment and order dated 19.03.2019 passed by the High Court of Himachal Pradesh at Shimla in CMP Nos.4761 and 5386 of 2018 in CWP No.2274 of 2017. 2. An agreement was entered into between the appellants and the Government of Himachal Pradesh on 26.05.2008 for setting up 24 MW “Kut Hydro Electric Project” in District Shimla. For commissioning said Project, the appellants availed loan from the consortium of Punjab National Bank (‘the Bank’, for short), Corporation Bank and Central Bank of India.

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