The Madras High Court has dismissed a petition by public sector Indian Bank seeking permission to conduct a public auction to sell granite blocks of Madurai based PRP Exports, which the exporter had pledged as collateral towards credits and loans granted to it.
When the petition came up recently, a bench of justices T S Sivagnanam and G Jayachandran held that the sale cannot be permitted when granite worth Rs 132 crore had already been seized by respective Investigating Officers probing over 52 criminal cases pending against the exporter.
The bank submitted that the materials pledged with them are granite blocks, slabs, finished goods and others, which could be identified and valuation could be done.
The properties could be photographed and brought for sale to recover the loan provided to the exporter, it said.
It argued that if the goods were left exposed to sun and rain, its value was bound to deplete, which would ultimately cause loss to the state exchequer.
To this, the Additional Advocate-General submitted that there are 52 cases registered against PRP Exports and their associates in Madurai, on charges of illegally quarrying granites.
Besides, during investigating, the IO had already seized those granite blocks, which were presently under the custody of the criminal courts concerned.
"Therefore, the bank has no lien (right) over such properties and cannot claim themselves as a secured creditor as the articles (granite slabs) are the case properties relating to various criminal investigation," he added.
He also submitted that it was the duty of PRP Export to repay the loan borrowed. For that reason, the sale, at the instance of the bank, cannot be permitted as it would cause irrecoverable loss to the state government.
Recording the submissions, the bench dismissed the plea.
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