BHARAT AMRUTLAL THAKRAR V. ORIENTAL BANK OF COMMERCE

SCA/20267/2015

AI Insights

The case involves Bharat Amrutlal Thakrar (petitioner) who filed a petition against Oriental Bank of Commerce and others, seeking to prevent the bank from adjusting the proceeds of Fixed Deposits (FDRs) towards a loan account of respondent No.2 Company, which he alleged was done without his consent. The bank contended that the petitioner had pledged the FDRs himself as security for the loan taken by respondent No.2 Company, which was supported by a resolution passed by the company and an application signed by the petitioner. The court found that the petitioner had misled the court by not disclosing his full involvement and consent in the matter, leading to the dismissal of his petition.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 726204 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 05-03-2019
• Assessment Year: misc
• Other Referred Cases: Anumati Vs. Punjab National Bank, Gorkha Security Services Vs. Government (NCT of Delhi), Prestige Lights Ltd. Vs. State Bank of India, Bhaskar Laxman Jadhav and Ors. Vs. Karamver Kakasaheb Wagh Education Society and Ors., Hari Narain v. Badri Das, Ramjas Foundation v. Union of India
• Laws Referred To: Article 226 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RA MISHRA; ANAL SHAH; DEVDIP BRAHMBHATT
• Assessee Lawyers: VISHWAS SHAH
• Keywords: Fixed deposits; Loan account; Pledge; Security; Suppression of Material Facts; Writ of Mandamus; Adjustment of proceeds

Judgement Text

"C/SCA/20267/2015 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 20267 of 2015 ========================================================== BHARAT AMRUTLAL THAKRAR Versus ORIENTAL BANK OF COMMERCE & 3 other(s) ========================================================== Appearance: MR VISHWAS K SHAH(5364) for the Petitioner(s) No. 1 MR ANAL S SHAH(3988) for the Respondent(s) No. 4 MR DEVDIP BRAHMBHATT(3490) for the Respondent(s) No. 2,3 MR RA MISHRA(481) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS.JUSTICE BELA M. TRIVEDI Date : 05/03/2019 ORAL ORDER 1. The petitioner has filed the present petition under Article 226 of the Constitution of India, praying for the following main reliefs:- “9.(a) Be pleased to issue a writ of mandamus and/or any other writ, order or direction that respondent Bank is injuncted/prohibited/restrained to adjust/appropriate Fixed Deposits (9) in the joint name of petitioner and his wife for the loan account of respondent No.2 company and be pleased to further issue mandamus to respondent No.1 Bank to remit the proceeds of Fixed Deposits along with accrued interest in favour of petitioner and his wife. (b) Be pleased to quash and set aside the adjustment/appropriation of proceeds of Fixed Deposit with account No.05563471000993 in joint name of petitioner and his wife on Page 1 of 10 C/SCA/20267/2015 ORDER 7.12.2015 towards loan account of respondent No.2 company. (c) Be pleased to issue mandamus or any other writ order or direction that respondent Bank may pay the amount of proceeds of Fixed Deposit with account No. 05563471000993 to the petitioner and his wife. (d) Be pleased to quash and set aside impugned communication dated 1.10.2015 issued by respondent Bank. (dd) Be pleased to direct respondent No.1 Bank to restore the status quo ante and not to adjust the proceeds of Fixed Deposits (9) without order of Hon’ble Court.” 2. As per the case of the petitioner, the respondent No.2 Company of which the petitioner was a former Director, had taken loan from the respondent No.1 Bank in the year 2007. The loan was sanctioned by the respondent No.1 Bank on security of Fixed Deposits, on the strength of illegal alleged pledge created by his wife the respondent No.4 herein in favour of the respondent No.1 Bank. On the basis of the alleged pledge of the said FDRs of Rs.99,00,000/-, the respondent No.2 Company had availed loan of Rs.93,00,000/- during the period from 24.9.2007 to 3.11.2007. According to the petitioner, he was the joint holder of the said FDRs pledged by his wife before the respondent No.1 Bank, however, he was neither borrower nor guarantor of the respondent No.2 Company. However, the respondent No.1 Bank had Page 2 of 10 C/SCA/20267/2015 ORDER appropriated/adjusted the amount of Rs.9,00,000/- of one of the FDRs towards the outstanding amount of the respondent No.2 Company and had informed the petitioner by the communication dated 1.10.2015 refusing to release the FDRs of the petitioner. Hence, the petition has been filed. 3. The respondent No.1 Bank has resisted the petition by filing the affidavit-in-reply contending inter alia that the petition was not maintainable as the petitioner had mischievously concealed and suppressed the material facts from the Court. It is further stated that pursuant to the Resolution dated 11.2.2007 passed by the respondent No.2 Company, authorising the petitioner as the Director of the respondent No.2 Company, to take the loan from the respondent No.1 Bank against the security of the FDRs of the respondent No.4 i.e. wife of the petitioner, and further authorising the petitioner to make, enter into, execute and deliver to the Bank all the documents and papers required for the said loan, the petitioner himself along with the respondent No.4 had approached the respondent No.1 Bank with duly filled in LTR-I application form for the purpose of granting financial assistance against the FDRs to the respondent No.2 Company. On the basis of the said application, the loan was granted to the respondent No.2 Company. The petitioner himself had signed the said Page 3 of 10 C/SCA/20267/2015 ORDER application and had with full knowledge given the FDRs which were in the joint names of the petitioner and the wife i.e. respondent No.4 to the respondent No.1 Bank. Thereafter the respondent No.1 Bank had intimated the respondent No.4 that the over-drawn financial assistance by the respondent No.2 Company should be adjusted before 31.3.2013, to which the petitioner and the respondent No.4 had entered into some correspondence with the respondent No.1 Bank. The respondent No.4 had also written a letter to the respondent Bank on 8.4.2013 clearly showing that the FDRs were pledged to the Bank at the request of her husband i.e. the petitioner. Hence, the petitioner with full knowledge and consent had applied for the loan on behalf of the respondent No.2 Company and thus, the petitioner had not stated correct facts in the petition. 4. Learned Advocate Mr.Masoom Shah for the petitioner vehemently submitted that the petitioner was neither the borrower nor the guarantor in respect of the loan granted to the respondent No.2 Company. He also relied upon the decision of the Supreme Court in case of Anumati Vs. Punjab National Bank, reported in (2004) 8 SCC 498 to submit that when joint FDRs are pledged with “either or survival” clause, the said deposits on the maturity may be paid to either of the account holders by the bank in order to obtain valid discharge. According to Page 4 of 10 C/SCA/20267/2015 ORDER him, the wife of the petitioner i.e. respondent No.4 having created illegal pledge in favour of the respondent Bank, and the petitioner being the joint holder with either or survival clause in the said deposits, the bank could not have adjusted the amount of FDRs against the outstanding amount of loan. Mr.Shah has also relied upon the decision of the Supreme Court in case of Gorkha Security Services Vs. Government (NCT of Delhi) and Ors., reported in (2014) 9 SCC 105 to submit that it was incumbent on the part of the respondent No.1 Bank to issue a notice to the petitioner before adjusting the amount of FDRS. 5. However, the learned Advocate Mr.Mishra for the respondent No.1 Bank drew the attention of the Court to the affidavit-in-reply and the documents annexed thereto to submit that the petitioner had suppressed material facts from the Court and had not disclosed correct facts. According to him, the petitioner himself had applied for the loan on the basis of the Resolution passed by the respondent No.2, pledging the FDRs in the joint names of the petitioner and his wife respondent No.4, however, the said fact has not been stated by him in the petition. He also submitted that the wife of the petitioner had also entered into correspondence with the Bank clearly stating that the said pledge of FDRs was with the consent and knowledge of the petitioner. Page 5 of 10 C/SCA/20267/2015 ORDER 6. Having regard to the submissions made by the learned Advocates for the parties and to the documents on record, more particularly the averments made in the petition, it appears that the petitioner had not disclosed the correct facts, and on the contrary, had made misleading and vague averments in the petition. As clearly transpiring from the documents produced by the respondent No.1 Bank along with the affidavit- in-reply, which have remained unchallenged, the petitioner himself had applied for the loan on behalf of the respondent No.2 Company, pledging the FDRs of his wife by way security of the said loan pursuant to the Resolution passed by the respondent No.2 Company. The petitioner has made misleading statements in the petition with a view to give an impression that the said loan was obtained by the respondent No.2 Company and the FDRs in question were pledged by his wife – the respondent No.4 without his knowledge, whereas the record shows that he himself had applied for the loan on behalf of th respondent No.2 Company on the basis of the resolution passed by the Company and that the respondent No.4 had pledged the said FDRs by way of security towards the said loan with the full consent and knowledge of the petitioner. The said facts though very material, having not been disclosed in the petition, the Court is of the opinion that the petitioner is guilty of suppression of material facts, and his petition Page 6 of 10 C/SCA/20267/2015 ORDER under Article 226 of the Constitution deserves to be to be dismissed on that ground alone. The Supreme Court in case of Prestige Lights Ltd. Vs. State Bank of India, reported in (2007) 8 SCC 449 has held in paragraphs 33 and 34 as under:- “33. It is thus clear that though the appellant­Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136], in the following words: \"It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts ­ facts, not law. He must not misstate the law if he can help it. The Court is supposed to know the law. But it knows nothing about the facts, and the Page 7 of 10 C/SCA/20267/2015 ORDER applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement\". 7. In case of Bhaskar Laxman Jadhav and Ors. Vs. Karamver Kakasaheb Wagh Education Society and Ors., reported in (2013) 11 SCC 531 also the Supreme Court has held that- 44. It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litigant to disclose all the facts of a case and leave the decision making to the Court. True, there is a mention of the order dated 2nd May 2003 in the order dated 24th July 2006 passed by the JCC, but that is not enough disclosure. The petitioners have not clearly disclosed the facts and circumstances in which the order dated 2nd May 2003 was passed or that it has attained finality. 45.We may only refer to two cases on this subject. In Hari Narain v. Badri Das, AIR 1963 SC 1558 stress was laid on litigants eschewing inaccurate, untrue or misleading statements, otherwise leave granted to an appellant may be revoked. It was observed as follows: “9. ...It is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading. In dealing with applications for special leave, the Court naturally takes Page 8 of 10 C/SCA/20267/2015 ORDER statements of fact and grounds of fact contained in the petitions at their face value and it would be unfair to betray the confidence of the Court by making statements which are untrue and misleading. That is why we have come to the conclusion that in the present case, special leave granted to the appellant S.L.P. (C) No. 30469 of 2009 ought to be revoked. Accordingly, special leave is revoked and the appeal is dismissed. The appellant will pay the costs of the respondent.” 46. More recently, in Ramjas Foundation v. Union of India, (2010) 14 SCC 38 the case law on the subject was discussed. It was held that if a litigant does not come to the Court with clean hands, he is not entitled to be heard and indeed, such a person is not entitled to any relief from any judicial forum. It was said: “21. The principle that a person who does not come to the court with clean hands is not entitled to be heard on the merits of his grievance and, in any case, such person is not entitled to any relief is applicable not only to the petitions filed under Articles 32, 226 and 136 of the Constitution but also to the cases instituted in others courts and judicial forums. The object underlying the principle is that every court is not only entitled but is duty bound to protect itself from unscrupulous litigants who do not have any respect for truth and who try to pollute the stream of justice by resorting to falsehood or by making misstatement or by suppressing facts which have a bearing on adjudication of the issue(s) arising in the case.” 8. Even otherwise, the disputes raised by the Page 9 of 10 C/SCA/20267/2015 ORDER petitioner being of civil nature and number of disputed questions of facts being involved in the petition, the Court without expressing any opinion on the merits of the petition, is not inclined to entertain the petition under Article 226 of the Constitution of India. 9. In that view of the matter, the petition being devoid of merit is dismissed. The interim relief granted stands vacated forthwith. The request for extension of interim relief is rejected in view of the fact that the petitioner has suppressed material facts. (BELA M. TRIVEDI, J) V.V.P. PODUVAL Page 10 of 10 "