IndusInd Bank Ltd and a recovery officer of the Debt Recovery Tribunal (DRT)
have been served with contempt notice by the ADR Arbitral Tribunal,
New Delhi, for going ahead with the auction
of the Ram Laxman Hotels' property at Pune,
on which Holiday Inn stands.
The DRT recovery officer S Ravinder Yadav
had initiated the auction proceedings on a
plea from the IndusInd Bank for recovery of the loan
amount due to it from Ram Laxman Hotels.
The ADR Tribunal subsequently held that the auction
proclamation was "illegal, void, malicious and without jurisdiction
tainted with fraudulent motives and abuse of legal process."
DRT and the bank, however, went ahead with the auction
process on the last Monday but the Pune civil court stayed it.
However, according to IndusInd Bank officials in Mumbai,
the bank has replied to the notice stating that the contempt
notice was not applicable on them.
The ADR Tribunal, an autonomous non-profit body corporate
constituted as permanent Arbitral Institution under the Arbitration
and Conciliation Act of 1996, felt that the auction process was
in "utter disregard" of the interim award given by it.
It was added that for the ADR Tribunal, the power of intervention
by judiciary has been drastically curtailed and contempt of tribunal
has been made punishable as contempt of court, legal experts point out.
The dispute between Ram Laxman Hotels and IndusInd bank
relates to a loan taken by the former. The hotel management
subsequently sought to get refinance from NRI Lead Bank (NLB)
to take advantage of reduced interest rates.
The other creditors of the hotel - Tourism Finance Corporation
of India and Industrial Finance Corporation of India - had
agreed in principle to transfer the liability of Ram Laxman Hotels to NLB.
IndusInd bank, however, did not reply to the offer from NLB,
but instead moved DRT at Pune following which the bank
approached ADR Tribunal challenging the auction bid.
NLB said that it was ready to take over the liabilities of the hotel
and pleaded that the status quo of the property should be
maintained to which the ADR Tribunal agreed on its interim order.
With the DRT and IndusInd Bank going ahead with the auction bid,
the ADR Tribunal served notices on them saying that they are guilty
of contempt of the tribunal.
DRT recovery officer Ravinder Yadav
and IndusInd bank MD Bhaskar Ghosh
failing which the Tribunal will launch contempt
of court proceedings in Delhi High Court, the notice said.
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Sir, this is not the first case of contempt against a bank ,even a prime bank of the status of State Bank Of India,Guwahati,ASSAM is also facing a CONTEMPT proeeding in Hon'ble GUWAHATI HIGH COURT, because State Bank of India has induldged in illegal confirmation of a public auction proceeding ignoring the interim order of the Hon'ble Guwahati high court for 'not to confirm the proceeding of public auction scheduled to be held on 10/02/2007'.Hon'ble Guwahati High Court in its order dated 18/01/2011 in contempt case no.385/2009 has observed that'As stated above,it appears that the respondents had already confirmed the auction sale in clear voilation of the interim order of this court dated 09/02/2007.It appears that the order for confirmation is not only voilative of this court's interim oreder dated 09/02/2007 but also the interim order dated 20.6.07.Accordingly,the order for confirmation of public auction is illegal.From the above discussion,there are enough prima facie materials for initiating contempt proceedings against the respondents.'Next date is on 28/02/2011.This is an another living example of abouse of securitization act by banks in our country. Because most of the borrower leave the battle mid way because of financial constraint and Stapulation in the act to deposit 75% or so to file an appeal before DRAT.As a result honest borrowers also become victimize of bank's apathy.
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