WP/18559/2004 of M/s.Parinika Harvest Floratech Ltd., Vs The Suptd. of police, on 29 December 2004

ORAL ORDER:

The petitioners seek a direction to the third respondent to release thedocuments offered as security to the said respondent in terms of thecompromise decree in O.A.No.288 of 2001 dated 30.04.2004 on thefile of the Debt Recovery Tribunal, Hyderabad.

The petitioner obtained a term and working capital loan from DenaBank, the third respondent-Andhra Bank and National HorticultureBoard. The petitioners borrowed Rs.1.00 crore from the thirdrespondent-Bank and furnished primary and collateral securities forthe said loan creating pari-pasu charge on the assets of the firstpetitioner-Company. Among the collateral security furnished to thethird respondent-Bank the following are properties:

1. 14 Acres 35 Guntas land belonging to Mr.V.SudheerReddy under Sy.No.Reddy under Sy.No.

a. 4.38 Ac. in Sy.No.292/ , 292/ , 292/,

b. 4.25 Ac. in Sy.No.291/ , 291/ , 291/,

c. 0.22 gts. in Sy.No.293/ ,

d. 0.35 gts. in Sy.No.289/ ,

e. 1.27 Ac. in Sy.No.322/ , f. 1.27 Ac. in Sy.No.322.

2. Def. 7 to 12 Acs.62.39 at Vavilallapally village,Narayanapuram Mandal, Nalgonda District.Narayanapuram Mandal, Nalgonda District.

3. Rs.2.00 lakhs fixed deposit in PHFL Name

4. Prime security of Ac.18.34 Guntas in Sy.Nos.321, 322,323, 325 and 329 at Pendyal village, MaheswaramMandal, R.R.District which is in Pari Passu chargebetween Dena Bank, Andhra Bank, NHB.323, 325 and 329 at Pendyal village, MaheswaramMandal, R.R.District which is in Pari Passu chargebetween Dena Bank, Andhra Bank, NHB.

In respect of two other properties namely 1506 square yards atJillalaguda village, Saroor Nagar Mandal, R.R.District in SurveyNos.8, 9 30, 31 and 32 belonging to V.Aruna Reddy, the secondpetitioner and another extent of 11.20 Acs. in the same village anddistrict situated in Survey Nos.8, 9 and 30, belonging to oneMr.V.Sudheer Reddy, the third petitioner, the third respondent-Bankfiled a complaint against the first petitioner-Company alleging that thecollaterals provided are manipulated and forged and asserting otherallegations with regard to the quality of the security of the aforesaidtwo properties. The complaint is pending investigation. It isrepresented that a charge sheet has also been filed and the CBI ispursuing the investigation and prosecution. In lieu of these twosuspect properties, as security the petitioners have provided 7 otherspecies of properties as security for the term and working capital loanalready obtained by them.

The third respondent-Bank filed O.A.No.288 of 2001 against thepetitioners for recovery of an amount of Rs.1,66,42,726/-. In the OA,the petitioners and the third respondent-Bank are stated to haveentered into a compromise which was recorded by the DebtRecovery Tribunal on 30.04.2004 in O.A.No.288 of 2001. Thepetitioners contend that in terms of the compromise in O.A.No.288 of2001, they are entitled for release of certain securities offered bythem towards the loan both at the time of obtaining loan and later, ontheir repaying the loan amount in terms of the compromise dated30.04.2004.

However, there appears to be hitch on account of theinvestigation and prosecution of the petitioners 2 and 3 as regards two of the extents of property offered as primary and collateralsecurity, already adverted to above.

In the above scenario, the respondents 1 and 2 have filed acounter-affidavit. To the extent relevant for the purposes of this writpetition, the counter reads:

“In this connection it is submitted that the property No.1mentioned in Annexure i.e., 14 acres 35 guntas land belonging toMr.V.Sudheer Reddy under Sy.Nos.289, 291, 292, 293 and 322 arenot charge sheeted and not required by CBI and CBI has noobjection for settling the bank dues by selling the above property.The property No.2 mentioned in Annexure are also not chargesheeted by the CBI and CBI has no objection for settling the bankdues by selling the above property. The property No.3 mentioned inAnnexure is fixed deposit in the name of M/s.Parinika HarvestFloratech Ltd., and CBI does not have any objection if the same arereleased for settling the bank claims. The property No.4 mentioned inthe Annexure was handed over to M/s Dena Bank on 01.08.2003and CBI has no objection for settling the bank claims by selling theabove property. It is further submitted that the documents pertainingto the Survey Nos.8, 9 and 30 of Jillalguda village, SaroornagarMandal, R.R.District are filed along with charge sheet in RCNo.9(A)/2000-CBI/Hyd CC No.1/2003.”

The third respondent has also filed a counter-affidavit, from whichthere appears to be no resistance to the petitioners’ request andclaim for release of the documents and the title deeds relating to the 4items of property initially offered as primary and collateral security bythe petitioners, excluding the 2 items which are the subject matter ofprosecution by the CBI. The learned Standing Counsel for the thirdrespondent-Bank, however, contends that the documents in respectof these 4 species of property are with the CBI to which they havebeen entrusted by the third respondent-Bank for the purposes ofinvestigation.

In the light of the averments in the counter-affidavit of the CBI, as the 4 properties are not the subject matter of the investigation orprosecution against the petitioners and are not required, there shouldbe no objection in principle or fact for the CBI to return thesedocuments to the custody of the third respondent-Bank andthereafter for the third respondent to release these documents infavour of the petitioners, on the petitioners satisfying the amount ofloan due to the third respondent-Bank in terms of the compromiserecorded by the Debt Recovery Tribunal in O.A.No.288 of 2001 byorder dated 30.04.2004.

The third respondent is accordingly directed to release the followingdocuments in favour of the petitioners after obtaining appropriatereceipts from them and after the petitioners satisfy the amounts dueto the third respondent, in respect of repayment of the loan, as perthe terms recorded in O.A.No.288 of 2001 by order dated30.04.2004;

1. 14 Acres 35 Guntas land belonging to Mr.V.Sudheer Reddyunder Sy.No.under Sy.No.

a. 4.38 Ac. in Sy.No.292/ , 292/ , 292/,

b. 4.25 Ac. in Sy.No.291/ , 291/ , 291/,

c. 0.22 gts. in Sy.No.293/ ,

d. 0.35 gts. in Sy.No.289/ ,

e. 1.27 Ac. in Sy.No.322/ ,

f. 1.27 Ac. in Sy.No.322.

2. Def. 7 to 12 Acs.62.39 at Vavilallapally village,Narayanapuram Mandal, Nalgonda District.Narayanapuram Mandal, Nalgonda District.

3. Rs.2.00 lakhs fixed deposit in PHFL Name

4. Prime security of Ac.18.34 Guntas in Sy.Nos.321, 322,323, 325 and 329 at Pendyal village, Maheswaram323, 325 and 329 at Pendyal village, Maheswaram VGB

Mandal, R.R.District which is in Pari Passu chargebetween Dena Bank, Andhra Bank, NHB.

The Writ Petition is disposed of as above.

_______________

29.12.2004

To

1 The Superintendent of Police, Central Bureau of Investigation, Kendriya Sadan, Koti, Hyderabad.

2 The Inspector of Police, Central Bureau of Investigation, Kendriya Sadan, Koti, Hyderabad. Koti, Hyderabad.

3 The Branch Manager, Andhra Bank, Agri Hi Tech Branch, Lakdi-ka-pool, Hyderabad. Hyderabad.

4 2CD copies