TMI Blog2017 (1) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... we do not find any error in the directions issued by Division Bench of the High Court, directing 1st and 2nd Respondent, i.e., erstwhile owner and 8th Respondent Robust Hotels to deposit the sum of ₹ 15.12 Crores. We, however, are of the view that it was not necessary for the High Court to presume that the conditions of deposit, as ordered by the court shall not be complied with. Orders of the court are issued to be complied with and a court does not lack power to ensure the compliance by appropriate proceedings. Thus, further directions of the High Court that 'if the condition of deposit as ordered by this court has not complied with by either of the parties', interim injunction, restraining the 8th Respondent' was uncalled for. The interim order passed by the High Court, directing for deposit of ₹ 15.12 Crores has done substantial justice between parties, which need no interference by this Court in exercise of its jurisdiction under Article 136. It goes without saying that the trial judge has to expeditiously proceed to decide the suit. The deposit was to be made under the order of the High Court till 31st August, 2011. This Court passed an interim order on 29th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -in-interest of the 3rd Respondent Balaji Hotels Enterprises Ltd. (for short, BHEL). The agreement provided that EIH would provide its technical knowledge and skill required for operation of hotel, which was being constructed by BHEL. Another agreement on January 12, 2000 was entered between BHEL and EIH, where it was recorded that on the request of BHEL, EIH paid ₹ 9 Crores to the BHEL by way of financial accommodation which was used for construction of hotel. By supplemental agreement dated June 10, 2000, it was recorded that in total ₹ 15 Crores 12 Lacs have been received by BHEL, repayment of which is to be made within 24 months from the date of the principal agreement dated 12th June, 2000. It appears that amount could not be repaid hence another agreement was entered between EIH and BHEL on 4th February, 2002. The agreement recorded that, it has now been mutually agreed by the BHEL and EIH that EIH will no longer participate in the hotel operations hence the Technical Service Agreement will be terminated. EIH, further stipulated that NoObjection to BHEL shall be given for selling, leasing or otherwise transferring the hotel unit to any other company whether subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 2000 and 4th February 2002 are valid, legal and subsisting and are binding and enforceable on the Defendant No. 3 to 7 and /or its assigns . (b) Permanent injunction restraining the Defendant Nos. 3 to 7 whether by itself, its servants, agents and /or assigns or otherwise howsoever from selling, encumbering and/or disposing of in any manner howsoever, the schedule property of the Defendant No. 1 situated at Mount Road, Chennai, in favour of any persons without disclosing and/or recognizing the rights of the plaintiff to operate and manage the hotel as provided for under the technical services agreement dated 26th October, 1988 and the Project Consultancy Agreement and Royalty Agreement both dated 26th October, 1988 and the agreements dated 12th January, 2000, 10th June, 2000 and 4th February 2002. (c) Costs (d) Such further and other reliefs. 8. An application was also filed by the EIH and Oberoi Hotels (P) Ltd. who were Plaintiff Nos. 1 and 2, for grant of temporary injunction. The learned Single Judge had issued temporary injunction on 18.03.2005. 9. After the grant of temporary injunction, it appears that in the year 2007 proceedings were initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been filed by EIH Ltd. and Oberoi Hotels against judgment and final order dated 13th March, 2012 passed by the High Court of Madras in O.S.A. No. 419 of 2011 and M.P. No. 1 of 2011. While noticing the facts in the appeals filed by Robust Hotels, we in the proceedings paragraphs have noted the facts which are also relevant for understanding the issues raised in present appeals. The appellants EIH and Oberoi Hotels filed a suit, being C.S. No. 164 of 2011 before the High Court of Madras praying for a declaration that Deed of Transfer dated 5th July, 2007 entered into between IFCI Ltd. and TFCI on one part and the Robust Hotels (P.) Ltd. on another part, and the certificate of sale of immovable property dated 6th July, 2007 are illegal and null void and of no effect and not binding. A perpetual injunction was also prayed for, restraining the defendants whether by themselves, their servants, agents or otherwise howsoever from purporting to act, to give effect to or taking any steps in furtherance of the purported deed of transfer dated July 5, 2007 and the certificate of sale of movable and immovable property also dated July 5, 2007 or from enforcing the same in any manner whatsoe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o EIH and the order passed by the Division Bench issuing such direction is unsustainable. It is submitted that Robust Hotels cannot be held liable for any breach of Order dated 18.03.2005 and in view of the subject matter, order dated 18.03.2005 was also hit by Section 34 of Sarfaesi Act, 2002. Shri Venugopal further submitted that C.A.Nos....of 2016 (arising out of Special Leave Petition (C) Nos. 1774243 of 2012) filed by EIH deserved to be dismissed since both learned Single Judge and Division Bench have rightly held that the transfer on 5th July 2007 made in favour of Robust Hotels could not have been challenged in C.S. No. 164 of 2011 in view of Section 34 of Sarfaesi Act, 2002. 17. Shri Jaideep Gupta and Siddharth Mitra learned senior counsel, appearing for EIH have vehemently opposed the submissions raised by Shri K. K. Venugopal. It is contended by learned senior counsel appearing for EIH and Another that the order passed by the Division Bench on 26th July, 2011 is perfectly in accordance with law, which need no interference by this Court in exercise of jurisdiction under Article 136 of the Constitution. It is submitted that interim order has been issued by Division Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submissions in detail. 23. First, we take up the appeal of Robust Hotels, the appeal has been filed against an interim order passed by the High Court, disposing of the CMA No. 798 of 2011. 24. The interim directions issued by Division Bench are in following three parts: (i). This Court without prejudice, directs the 1st and 2nd respondents / erstwhile owners / BH and EL and another or the 8th respondent / the present owner / Robust Hotels Private Limited to deposit a sum of ₹ 15.12 Crores into the credit of O.S. No. 12159 of 2010 on or before 31st August 2011. (ii). After such deposit has been made the learned trial judge shall dispose the case within a period of three months on merits, without being influenced by this Court's findings. (iii) If the Condition of deposit as ordered by this Court, is not complied with by either of the parties, the interim injunction, restraining the 8th respondent/Robust Hotels Private Limited, from acting or taking any steps contrary to and/or in derogation of the rights of the petitioners under the technical service agreement, the projects consultancy agreement and the Royalty agreement all dated October 26, 1988, entere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncumbering in any manner howsoever the hotel unit of Balaji Hotels Enterprises Ltd.(BHEL), in favour of any person without disclosing the rights of the applicants to operate and manage the hotel in terms of the Technical Services, Project Consultancy Royalty Agreement dated 26th October, 1988 and the Agreements dated 12th January 2000, 10th June, 2000 and 4th February, 2002. 29 . Thus, the injunction ordained that while dealing with the hotel unit the rights of the applicant be disclosed. The subsequent facts, as noted above indicate that even after the aforesaid injunction the IFCI Ltd. and Tourism Finance Corporation of India Ltd. by deed of transfer dated 5th July, 2007 transferred the hotel unit to Robust Hotels without disclosing the rights of the applicant as provided by the Agreement mentioned therein. The Agreement dated 4th July, 2002 clearly provided that the BHEL was required to repay the amount of ₹ 15.21 Crores to the EIH by 31st December, 2002 whereafter, EIH had nothing to do with the operation of the hotel. 19. Learned senior counsel for the appellants have placed much reliance on the Section 34 of the Sarfaesi Act, 2002 . Section 34 of the Sarfaesi A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is express bar of jurisdiction of the Civil Court to the following effect: (i) Any suit or proceeding in respect of any matter in which Debt Recovery Tribunal or Appellate Tribunal is empowered by or under this Act to determine. (ii) Further, no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Thus the bar of jurisdiction of Civil Court has to correlate to the above mentioned conditions. For purposes of this case, we are of the view that this Court need not express any opinion as to whether suits filed by EIH were barred by Section 34 or not, since the issue are yet to be decided on merits and the appeal by Robust Hotels have been filed only against an interim order. 33. The submissions, which have been much pressed by learned senior counsel for EIH is on the effect and consequence of acting in breach of injunction order dated 18th March, 2005. At the time, when injunction order was issued by learned Single Judge, Robust Hotels was not in picture, however, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Development Authority Versus Skipper Construction Co. (P) Ltd. and Another (1996) 4 SCC 622 . 37. Another judgment relied upon is Anita International Versus Tungabadra Sugar Works Mazdoor Sangh and Others (2016) 9 SCC 44 . In the aforesaid case, in a Company Petition, filed in the Madras High Court for winding up of Deve Sugars Ltd., an order of winding up was passed. An Official Liquidator was directed to take possession of the property of the company. State Bank of Mysore had extended some loan to the Deve Sugar Ltd. and on default having been committed, an O.A. was filed before the Debt Recovery Tribunal by the Bank for the recovery of the amount. The Recovery Certificate was issued for a sum of ₹ 8.40 Crores. State Bank of Mysore filed a Company Application in the pending Company Petition before the High Court of Madras, seeking leave to proceed before Debt Recovery Tribunal (DRT), Bangalore. 38. The High Court, while granting the leave to the State Bank of Mysore passed an order that no coercive steps are to be taken against the assets of the company during or after concluding all the proceeding before the tribunal. The order passed by Madras High Court has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re whom recovery proceedings are initiated, have exclusive jurisdiction in the matter. It was also pointed out that this Court has clearly declared that even the jurisdiction of Recovery Officers in matters of execution of recovery certificates was likewise exclusive. It was the pointed contention of the learned counsel for the appellants that in matter wherein banks and financial institutions approach a Debts Recovery Tribunal, which on due consideration issues a recovery certificate, the same can be executed only through a Recovery Officer. It was submitted that a Company Court has no jurisdiction in the matter. The learned counsel for the appellants substantiated the above assertion on the basis of the decisions rendered by this Court in Allahabad Bank, M.V. Janardhan Reddy, Andhra Bank, Rajasthan State Financial Corpn. and Official Liquidator cases. (51.) It is not possible for us to accept the contentions advanced on behalf of the appellants. In this behalf it would be relevant to mention that in M.V. Janardhan Reddy case the Company Court by an order dated 13.8.1999 required that its permission should be obtained before the Recovery Officer finalised the sale. Thereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Division Bench of the High Court and we do not find any error in the directions issued by Division Bench of the High Court, directing 1st and 2nd Respondent, i.e., erstwhile owner and 8th Respondent Robust Hotels to deposit the sum of ₹ 15.12 Crores. 43. We, however, are of the view that it was not necessary for the High Court to presume that the conditions of deposit, as ordered by the court shall not be complied with. Orders of the court are issued to be complied with and a court does not lack power to ensure the compliance by appropriate proceedings. Thus, further directions of the High Court that 'if the condition of deposit as ordered by this court has not complied with by either of the parties....', interim injunction, restraining the 8th Respondent' was uncalled for. The interim order passed by the High Court, directing for deposit of ₹ 15.12 Crores has done substantial justice between parties, which need no interference by this Court in exercise of its jurisdiction under Article 136. We, however, are of the view that the directions issued by the Division Bench in para 38 need to be affirmed only to the following extent: (a) (i). This Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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