BISWANATH BHUWANTA Vs. INDIAN BANK

JUDGEMENT

(1.) M/s. Anirox Pigments (hereafter the company) was extended credit facilities by the Indian Bank. The petitioners stood as guarantors to the credit facilities sanctioned to the company. By virtue of loss suffered by the company, on or about 12- 12-2006 a reference was made under Section 15 (1) of the Sick Industrial Companies (Special Provision) Ad, 1985, (hereafter SICA) before the Board for Industrial and Financial Reconstruction (hereafter BIFR) and the same was registered as BIFR Case No. 1117/2006. The company also failed to liquidate its dues and a substantial amount remained unpaid to the Bank. It is in this background that the Bank issued a letter dated 13-1-2007 which has been made the subject-matter of challenge in the present petition. By the impugned letter, the petitioners were informed of freezing of savings accounts maintained by the petitioners 1 and 3 with it in view of the fact that the company had failed to repay the amount due to the Bank resulting in the account becoming NPA and subsequently the advance having been called back. This was done by the Bank in exercise of its right of general lien.

(2.) Mr. Talukdar, learned Counsel for the petitioners submitted that the action of the Bank in freezing the personal accounts of petitioners 1 and 3 maintained with the Bank was absolutely illegal and arbitrary having regard to the fact of pendency of the reference before the BIFR. He invited the attention of this Court to Section 22 of the SICA and submitted that till such time the reference was disposed of, the Bank could not have proceed to freeze the personal accounts of the petitioners 1 and 2. In support of such submission, he relied on the decisions of the Apex Court reported in AIR 2000 SC 2553 : M/s. Patheja Bros. Forgings and Stamping v. ICICI Limited (paragraphs 1, 5, 7 to 8 and 11) and AIR 1998 SC 2064 : Real Value Appliances Limited v. Canara Bank (paragraphs 22 and 23). He, accordingly, prayed for an order from this Court for quashing of the order of freezing of accounts as contained in the letter dated 13- 1-2007.

(3.) Mr. Dutta, learned Counsel represent- ing the Bank submitted that in terms of the agreement of guarantee executed by the company as well as the petitioners, the Bank was entitled in law to pass the order impugned. He invited the attention of this Court to clause 15 of the said agreement to contend that the same empowers the Bank to freeze the personal accounts of the guarantors in exercise of its right of general lien. He has referred to the decision of the Apex Court reported in (2003) 4 SCC 305 : (AIR 2003 SC 1886) : Kailash Nath Agarwal v. Pradeshiya Industrial & Investment Corporation of U. P. Ltd. and submitted that neither the provisions of Section 22 of the SICA nor the judgment in Patheja Bros, (supra) protects the guarantors like the petitioners and, accordingly, prayed for dismissal of the writ petition.