HONOURABLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION NO.14564 OF 2014 Date: 14.11.2014 Between :
M/s. Marg Limited a company registered under the Indian Companies Act, 1956, having its office at Marg Axis, No.4/318, Rajeev Gandhi Salai, Kottivakkam, Chennai, rep.by its authorized Signatory and Manager (Civil), K.thirukumar, s/o.late A.Krishnaswamy, Aged 30 years, O/c Service.
….. Petitioner And State Bank of Hyderabad Trade Finance CPC, 2nd Floor, Surya Towers, S.P.Road, Secunderabad, rep.by its Chief Manager and Others.
….. Respondents This Court made the following:-
HONOURABLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION NO.14564 OF 2014 ORDER:
This writ petition is instituted for the following reliefs:
a) to issue an appropriate order or direction more particularly one in the nature of mandamus declaring that the action of respondents 1 and 2 in not complying with the obligation of making payment of Rs.10.00 crores covered by the four bank guarantees of Rs.2.50 crores each viz., 1) Bank Guarantee No.2102413BG0000616, dated 06.05.2013 of first respondent herein, 2) Bank Guarantee bearing No.2102413 BG0000610 dated 06.05.2013 of first respondent herein, 3) Bank Guarantee bearing No.2102413BG0000615 dated 06.05.2013 of first respondent herein and 4) Bank Guarantee bearing No.2119/12- 13, dated 30.03.2013 of second respondent herein, to the petitioner as illegal, malafide, fraudulent, bias mala fide and not in accordance with law and issue consequential direction to the respondents to make the payment of the same in terms of the Bank Guarantees; and
b) to direct the respondents to pay sum of Rs.10.00 crores to the petitioner or in the alternative to deposit the said amount to credit of the account of the petitioner bearing Account No.60165003358 in Bank of Maharashtra, Valmiki Nagar Branch, Valmiki Nagar, Chennai, Tamil Nadu.
2. The case of the petitioner is that petitioner stood as guarantor when the loan obtained by M/s.New Chennai Township Private Limited (NCPTL) from the State Bank of Hyderabad for an amount of Rs.42.00 crores. Petitioner entered into an agreement with M/s. Servomax India Limited with reference to some other issue. M/s. Servomax India Limited has given performance Bank Guarantees (for each of Rs.2.5 crores ) for an amount Rs.10.00 crores. On account of failure of terms and conditions of the contract with M/s.Servomax India Limited, the petitioner invoked of the Bank Guarantees. At this stage, State Bank of Hyderabad refused to pay money on account of invoking of Bank Guarantees and informed the petitioner that the said amount adjusted towards the liability of NCPTL. Aggrieved thereby, this writ petition is instituted.
3. When the matter is taken up for consideration, learned counsel for the petitioner and learned counsel for the respondent-bank stated that subsequently, the State Bank of Hyderabad has assigned all the rights, title and interests in financial assistance granted by them to NCPTL in favour of Edelweiss Asset Reconstruction Company Limited (EARC) and Assignment Agreement was executed in favour of EARC on 25.09.2014. As a consequence, EARC has become the secured lender and is entitled to recover the amounts.
4. Learned standing counsel, on instructions, submits that at the most the amount of Rs.10.00 crores, which was subject matter of the Bank Guarantees lying with the State Bank of Hyderabad, would be transferred to the EARC in terms of the Assignment Agreement with EARC and cannot be given to petitioner, which suggestion of the standing counsel is agreed by the counsel for the petitioner.
5. Recording the same, the writ petition is disposed of leaving it open to the respondent-bank to transfer the proceeds of the four Bank Guarantees (each Rs.2.50 crores), viz., 1) Bank Guarantee bearing No.2102413BG0000616, dated 06.05.2013 of first respondent herein, 2) Bank Guarantee bearing No.2102413BG0000610 dated 06.05.2013 of first respondent herein, 3) Bank Guarantee bearing No.2102413BG0000615 dated 06.05.2013 of first respondent herein; and 4) Bank Guarantee bearing No.119/12-13, dated 30.03.2013 to the credit of ERAC and if the bank intend to transfer take steps accordingly as expeditiously as possible. There shall be no order as to costs.
6. Miscellaneous petitions if any pending in this writ petition shall stand closed.
JUSTICE P.NAVEEN RAO Date: 14.11.2014 Kkm HONOURABLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION NO.14564 OF 2014 Date: 14.11.2014 Kkm