BS Reporter / New Delhi August 22, 2007
The Supreme Court today dismissed the appeal of Prestige Lights Ltd challenging the attempt of the State Bank of India to take over the residential houses of the company’s directors for defaulting in refunding Rs 85 lakh taken as loan.
The company submitted that it had suffered heavy losses due to the arrival of cheap Chinese products in the market and therefore it mortgaged its properties, including the houses given to its directors.
When the company could not comply with the terms of repayment, the bank issued notice to it under Section 13(4) of the Securitisation Act threatening to take over possession of the directors’ houses.
The company moved the Uttarakhand High Court which dismissed its petition. It then moved the Supreme Court without any success.
Last year, the Supreme Court had stayed the dispossession of the houses, given by the company to the directors, but the stay order has now been vacated. According to the judgment delivered by Justice CK Thakker, the company has not approached the court with “clean hands”. It had suppressed several relevant facts.
The court said the company had taken collusive action to deprive the bank from realising its dues. It did not disclose to the court that it had created third party interests in the property mortaged with the bank. It had also shifted machinery and materials without informing the bank.
“The court is supposed to know the law; but it knows nothing about the facts and the petitioner must state fully and fairly the facts,” the judgment emphasised while dismissing the appeal of the company.