Partly allowed

M/S. Bengal Waterproof Ltd. v. Union of India & Ors.

Delhi HC18 Mar 2016W.P.(C)/2291/2016

Case brief

AI extract

What is this about?

Petitioner challenged demand for interest recovery and sought No Due Certificate citing One Time Settlement and BIFR non-functioning. Court held dispute is contractual/accounting, not writ jurisdiction, and Section 22 SICA plea misplaced when claim not admitted. Dismissed.

What did the court decide?

Exemption applications allowed; main petition for mandamus and declaration dismissed; No Due Certificate denied.

M/S. Bengal Waterproof Ltd. Vs Union of India… — Civil Procedure and Limitation | Delhi HC (2016)

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$~20

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 2291/2016

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M/S. BENGAL WATERPROOF LTD. ..... Petitioner

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Through: Ms. Purti Marwaha & Ms. Henna George, Advs.

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Versus

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UNION OF INDIA & ORS. ..... Respondents Through: Ms. S. Ojha & Mr. Subham Saini, Advs.

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Mr. Sanjay Bhatt & Ms. Vidushi Shubham, Advs. for IDBI.

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CORAM:

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HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

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O R D E R

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% 18.03.2016

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CM Nos.9874/2016 & 9928/2016 (both for exemptions)

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Allowed, subject to just exceptions.

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The applications are disposed of.

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W.P.(C) 2291/2016 & CM No.9873/2016 (for directions)

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The petition seeks mandamus to the respondent no.3 IDBI to i) withdraw its e-mail dated 2^nd February, 2016 communicating to the petitioner the computation of interest as per which a sum of Rs.60,11,121.99 is due from the petitioner to the respondent no.3 IDBI; ii) withdraw the demands dated 6^th February, 2016, 15^th February, 2016 and 25^th February, 2016 for the said amount; iii) adhere to the Reserve Bank of India (RBI) Guidelines in regard to One Time Settlement (OTS); and, iv) to issue No Due Certificate (NDC) to the petitioner.

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W.P.(C) 2291/2016

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Page 1 of 3

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It is the case of the petitioner that the petitioner has paid the entire amount as per the OTS sanctioned by the respondent no.3 IDBI and that the claim of respondent no.3 IDBI of the aforesaid amount of Rs. 60,11,121.99 being still due is erroneous.

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It is further the claim of the petitioner that it has been registered with the Board for Industrial and Financial Reconstruction (BIFR) and though applied to BIFR under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) but the said application could not be taken up owing to the BIFR being non functional.

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What the petitioner in effect is wanting in this petition is to restrain the respondent no.3 IDBI from taking any steps for recovery of the amount which according to the respondent no.3 IDBI are due from the petitioner.

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Though a vague reference is made to RBI Guidelines but without any particulars and no RBI Guidelines which may have relevance or in violation whereof the respondent no.3 IDBI may be acting is also annexed to the petition.

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The counsel for the petitioner during the hearing also has not referred to any.

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The dispute if any of the petitioner with respect to respondent no.3 IDBI is a contractual and accounting dispute and which cannot be the subject matter of writ jurisdiction. If the respondent no.3 IDBI takes any measures for recovery of the amount from the petitioner, it will be open to the petitioner to in that proceeding contest the same on all grounds. No injunction restraining the respondent no.3 IDBI from making recoveries from the petitioner can be granted.

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W.P.(C) 2291/2016

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Page 2 of 3

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As far as the plea, of Section 22 of SICA and of BIFR being non functional is concerned, in my view the same is only a bogey to prevent the respondent no.3 IDBI from taking appropriate measures if any.

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I have repeatedly enquired from the counsel for the petitioner what difference does non functionality of BIFR make. If the respondent no.3 IDBI initiates any proceedings and the petitioner has the protection of Section 22 of SICA, the petitioner can always before that fora take the said plea and seek dropping / stay of that proceedings. As far as seeking a declaration from BIFR with respect to the contract with the IDBI is concerned, once according to the petitioner the contract has come to an end, with the petitioner paying the entire OTS amount, the petitioner cannot claim such a declaration also.

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The petitioner here is disputing the claim of the respondent no.3 IDBI and thus cannot plead Section 22 supra. The Division Bench of this Court in Saketh India Ltd. Vs. W. Diamond India Ltd. MANU/DE/0904/2010 on a consideration of a host of case law, has held that for protection of Section 22 to be available, the claim has to be admitted, either because it is reflected in the Scheme or because it stands favourably adjudicated in a Court of law. To the same effect is Haryana Steel & Alloys Ltd. Vs. Transport Corporation of India 193 (2012) DLT 312.

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There is thus no merit in the petition.

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Dismissed.

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No costs.

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RAJIV SAHAI ENDLAW, J

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MARCH 18, 2016 ‘gsr’.. W.P.(C) 2291/2016

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Page 3 of 3

M/S. Bengal Waterproof Ltd. v. Union of India & Ors.

Case brief

What is this about?

What did the court decide?

M/S. Bengal Waterproof Ltd. v. Union of India & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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