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TMI Blog2008 (3) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank, by preferring writ petition and the said writ petition was dismissed, against which the LPA was preferred, and the same was also dismissed being SCA No. 2004 of 2006 with 1995 of 2005, and the LPA Nos. 903 with 904 of 2006. However, as the liberty was given to the petitioner to offer buyer, for the higher amount by approaching before the bank, the petitioner had submitted the offer through that buyer of the higher amount, and it is an admitted position that the money has been realised by the bank as offered. The bank, in view of its security interest in the property, has recovered the full amount, and it is also not in dispute that the surplus amount of Rs. 16,75,890.75 ps. remained as balance with the bank, towards action taken under the Securitisation Act. 4. The grievance of the petitioner is that it was required for the respondent-bank to return the amount of Rs. 16,75,890.75 ps. to the petitioner, but the bank did not return the amount, and communicated to the petitioner that the amount is kept in sundry deposit account, and the matter is referred to the higher authority. Therefore, under these circumstance, the petitioner has preferred the present petitions. 5. Hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent-bank to seek appropriate orders from the DRT, as may be permissible in law. 8. The scope of the exercise of power under article 226 of the Constitution, against the action of bank under the Securitisation Act, is covered by the decision of this court in case of Apex Electricals Ltd. v. ICICI Bank Ltd. [2003] 57 CLA 278 (Gau.). In the said decision after considering various contentions including on the aspect of maintainability of the petition, this court, inter alia, concluded at para 65.6, as under : "65.6 All financial institutions covered by the Act exercising statutory rights and the measures as provided under the present Act are amenable to jurisdiction of this court under article 226 of the Constitution of India, but as the present Act itself provides for efficacious alternative remedy by way of self-imposed restrictions, this court would not entertain a petition challenging the action of the secured creditors of contemplating to undertake the measures as per the section 13(4) of the Act unless the action is perverse on the face of it or it creates absurd result or situation which cannot be remedied by the forum provided under sections 17, 18 read with the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed creditor shall, in the absence of any contract to the contrary, be held by him in trust, to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the persons entitled thereto in accordance with his rights and interests." 13. It deserves to be recorded that when the bank enforces its security interest under the Securitisation Act, it is clothed with the statutory power under the Securitisation Act. Therefore, the power so vested with the bank under the Securitisation Act can be construed within the scope of ambit of such power only, and it cannot be mixed up with the rights, if any, with the bank pertaining to the different loan transaction, in different capacity based on separate agreement entered into for such purpose. If the language of section 13(7) of the Act is considered, it provides that the secured creditor shall hold the amount in trust, to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received is required to be paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount is to be held by the secured creditors in trust, therefore, capacity to hold the amount is like the trustees, and the second is that it is mandated by the Legislature by using word "shall be paid to the person entitled thereto" for payment of the residue of the amount. Therefore, in view of the specific word used by the Legislature in the later part of the section 13(7) so far as return of the money is concerned, the strict interpretation is called for and it cannot be inter-mixed with the other rights of the secured creditors, pertaining to other contract of different loan transaction. It is hardly required to be stated that the person holding money in fiduciary capacity owes more responsibility and accountability, and he cannot inter-mix his personal rights to the money held by him in fiduciary capacity. Therefore, if the secured creditor who is holding the position of the trustee is required to retain money of the surplus amount, he cannot be permitted to retain money or appropriate money or permitted to exercise any so-called right based on separate transaction of loan of separate property, which is not concerned with the loan transaction in question for which the securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable to it under the Securitisation Act. The inbuilt mechanism of Securitisation Act, cannot be fully equated with the provisions under the Contract Act. Therefore, when in view of the aforesaid observations, it is found by this court that bank could not rely upon or inter-mixed the other contract pertaining to separate loan transaction, while acting under section 13(7) of the Act, it may not be required for this court to record findings and conclusion on the aspect of right of lien under the Contract Act. 20. The attempt was made by the learned counsel for the petitioner to contend that the Securitisation Act is an Act of 2002 and when the transaction of the loan was entered into by bank with the company and also deed of guarantee, the Securitisation Act, was not even on the statute book and, therefore, even the bank might not have conceived the right under Securitisation Act, and amount available under the Securitisation Act. Therefore, it was submitted that the attempt on the part of the bank to retain the amount, is only by way of afterthought and not bona fide. It was also submitted by the learned counsel for the petitioner that in view of section 35 of the Securitisation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, on reconciliation provisions of section 35 read with section 37 of the Securitisation Act, read with the observations made by this court for obligation created with the secured creditor to return the money under section 13(7) of the Act, the contention of learned counsel for the respondent-bank cannot be accepted for maintaining right of lien under the Contract Act, as against the provisions for obligation created under the Securitisation Act. 24. Learned counsel for the respondent-bank did submit that interest may not be awarded by this court, since bank had only retained amount, and had not invested the amount in any FDR. It was also submitted that petition was pending and if the bank was so directed earlier, it could have deposited the amount. Therefore, the interest may not be awarded by this court. 25. Whereas Mr. Unwala learned counsel for the petitioner submitted that petitioner has claimed interest at the rate of 24 per cent per annum. 26. In my view the action of the bank is found without authority, more particularly when the money held by it was as the trustees. The lawful obligation was created to return money, but if not returned, the interest by way of compensato ..... X X X X Extracts X X X X X X X X Extracts X X X X
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