Partly allowed

Asset Reconstruction Company India Limited v. Vijayakumar Mills Limited

DRT18 Oct 2023TA/12/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal partially allowed the application filed by an Asset Reconstruction Company. The court held that the claim against the primary borrower company was valid but ruled that claims against individual guarantors were time-barred. Additionally, sufficient evidence for secured charges was lacking.

What did the court decide?

Recovery certificate issued against Defendant 1 (Vijayakumar Mills Limited) for Rs.102.71 Crore with 9% interest; claim against guarantors dismissed.

Asset Reconstruction Company India Limited versus Vijayakumar… — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL –I AT CHENNAI

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Dated this 18^th Day of October, 2023

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PRESENT: SHRI A.S.JAYACHANDRA

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Presiding Officer

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T.A. No.12 of 2023

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M/s. Asset Reconstruction Company (India) Limited Represented by its Authorised Signatory, Mrs. K. Manjula Balaji, The Ruby, 10^th Floor, 29, Senapati Bapat Marg. Dadar (West) Mumbai- 400 028

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Also at:-

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I-G. 1^st Floor, Century Plaza, No. 560-562. Anna Salai, Teynampet, Chennai - 600 018. [The Original Applicant M/s.Canara Bank substituted Vide Orders dated 08.10.2018.] . . . Applicant

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Versus

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M/s. Vijayakumar Mills Limited, Chinnakalayamputhur Post, Palani 624 615 Dindigul District.

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[Now represented by Official Liquidator, Defendant No.14 – impleaded As per orders of Hon’ble High Court in CP No.115/2014 dt.10.01.2021.]

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G. Venkatraman. Chairman cum Managing Director. 1/8. Udumalpet Raod, Palani-624 615.

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Now residing at:27/D. Vasanthanagar Road, Sowripalayam. Coimbatore - 641 028

¶14

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3. Smt. Sumathy Venkatraman, Chinnakalayamputhur Post, Palani - 624 615 Dindigul District.

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Now residing at:27/D. Vasanthanagar Road, Sowripalayam. Coimbatore - 641 028.

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4. R. Balasubramaniam.. Chinnakalayamputhur Post, Palani 624 615 Dindigul District.

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5. D. Selvaraj.. 163, Gandhi Nagar, Tekkupalayam Post. Coimbatore – 641020.

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M/s. Kongarar Holdings Private Limited, Rep. by its Director Smt. Sumathy Venkatraman

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112, Dhali Road, Udumalpet-624 126 Coimbatore District. 7. M/s. Kongarar Investments Private Limited, Rep. by its Director Smt. Sumathy Venkatraman 112, Dhali Road, Udumalpet - 624 126, Coimbatore District.

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8. Indian Overseas bank, Udumalpet, Coimbatore District.

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9. Bank of India, Ottanchatram Branch. No.1512. Palani Road, Ottanchatram-624 619 Dindigul District.

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10.	Industrial Credit Investment Corporation of India Bank Limited. (ICICI Bank Ltd..) 'Cheran Plaza' 1090. Trichy Road, Coimbatore-641 018.
11.	Industrial Development Bank of India, Stock Exchange Building, 683-686. Trichy Road, Coimbatore 641 005.
12.	The State Industries Promotion Corporation of Tamilnadu (SIPCOT) No. 19-A, Marshal Road, Post Box. No. 7223. Egmore, Chennai - 600 008.
13.	Standard Chartered Bank, Alternate Investment Group, 19, Rajaji Salai, Chennai - 600 001
14.	The Official Liquidator, O/o The Official Liquidator, 'Corporate Bhavan', 2nd Floor, 29, Rajaji Salai, Chennai - 600 001 . . . Defendants

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: - O R D E R - :

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Originally the Applicant namely M/s.Canara Bank had filed OA No.90/2008 before the DRT, Madurai. The Original Applicant had assigned its debt in favour of the present Applicant and consequent to the order of the Tribunal dated 08.10.2018, the present applicant is substituted in its place.

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The Original Applicant had filed the OA for recovery of Rs.102,71,07,884.58p and sought recovery against Defendants 1 to 7 along with interest. In default they have also prayed for an order to sell the properties in Schedule A to the Petition and

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attachment and sale of Schedule B properties and all mortgaged immovable properties. Further reliefs are prayed for recovery.

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The case of the applicant is that the Defendant No.1 Company had approached the Bank for various credit facilities simultaneously from 10.03.1983. Defendants 2 & 3 are the promoters. The Defendant No.1 was enjoying credit facilities from 10.03.1983. Other facilities like working capital enhancement were granted thereafter in consortium with Indian Overseas Bank and Bank of India, which are Defendants 8 & 9 herein. This Company had also availed term loans from other financial institutions, which are Defendants 10 to 13 in the OA.

¶31

Defendant No.1 having suffered losses had approached BFIR as on 31.03.1997. To avoid the closure of the manufacturing activity of the 1^st Defendant the Original Applicant Bank had granted further credit facilities on the basis of holding on operation. However, the 1^st Defendant could not liquidate the liabilities.

¶32

The applicant pleads the following loan facilities accorded.

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I (a) Open Cash Credit on 10.03.1983 for which pro-note was executed for Rs.30 Lakhs and supplementary agreement along with letter of renewal was executed by D1.

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(b) On 29.10.1986 D2 & D4 executed guarantees.

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II Packing Credit

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(a) Defendant No.1 executed letter of renewal on 03.05.1994

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(b) Enhancement of Rs.37,50,000/- was given, for which pro-note and supplementary agreement was executed 0n 30.05.1994.

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(d) Adhoc Packing Credit Limit sanctioned for Rs.5 Crores on 19.05.1995, pro-note executed along with PC agreement.

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(e) Further enhancement sanctioned on 14.12.1995, letter of renewal and pro-note was executed for Rs.4.75 Crores.

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III Devolved LC

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(a) It is pleaded that apart from the above facilities the Defendant was also enjoying inland letter of credit and foreign letter of credit, for which Defendant executed the following documents.

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(b) 18.03.1989 and 02.05.1989 agreement and pro-note dated 02.05.1989 for Rs.5 Lakhs

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(d) 30.04.1994 Defendants 6 & 7 executed gurantees and covering letters.

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(e) 31.05.1994 and 01.10.1994, Defendants 2 to 4 executed guarantees.

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(f) Defendant No.1 executed letter of renewal and counter indemnity and hypothecation and agreement for Open Letter of Credit, all dated 14.12.1995.

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IV Over Draft to Foreign Bills of Exchange :-

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It is pleaded that 1^st Defendant was enjoying the credit limits on the discount of foreign bills of exchange. A total eleven bills of exchange were discounted were still outstanding in the accounts of the applicant. It is also pleaded that all the liabilities were bifurcated into Cash Credit component and working capital demand loan as per the directions of RBI, during July 1996.

¶52

As per the guidelines of RBI, same bank account being disabled to hold credit facilities to a single borrower over and above the stipulated limit, a consortium agreement was mandatory and accordingly, D1 Company passed a resolution on 16.07.1997. The D8 & D9 had executed a letter in favour of the Applicant Bank as a

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leader of consortium on 25.09.1997. Accordingly, the D1 Company had executed working capital consortium agreement and joint deed of hypothecation to all the consortium Banks and there is an inter-se agreement dated 25.09.1997 between the lending banks.

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It is alleged that the D1 created second charge in favour of the applicant bank on the schedule B properties and further created mortgage in schedule C properties. There is a hypothecation executed by 1^st Defendant on the movable assets as per Schedule A. It is also pleaded that D1 had requested the Applicant Bank on 04.11.1998 to cede the second charge over the fixed assets. First charge is created in favour of Defendants 10 to 12. D1 created a second charge on the machineries on 22.12.1998, which was confirmed by the letter dated 30.12.1998.

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1^st Defendant deposited the title deeds of the immovable properties mentioned in schedule C. The 1^st Defendant had failed to liquidate the liability despite several reminders and demand notice was issued on 20.05.2004 under Section 13(2) of the SARFAESI Act. There has been no response hence the present Application.

¶57

The applicant submits that the 1^st Defendant has a liability, which is jointly and severally borne by Defendants 1 to 7 towards the following:

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Loan A/c	Nature of Loan	Limit	Liability as on 27.04.2004
OCC 5037	Open Cash Credit	Rs.300.00 Lakh	Rs.3,33,26,111.33(a)
PC	PackingCredit	Rs.326.24 Lakh	Rs.3,24,82,708.00(b)
WCDL 5216	Working Capital Demand Loan	Rs.615.00 Lakhs	Rs.6,15,00,000.00 (c)
ODBFE	Foreign Bills Discount – Over Due		Rs.3,05,83,721.00 (d)
OCC 5356	Open Cash Credit-II	Rs.62.67 Lakh	Rs.18,45,824.13(e)
ILC	Inland Letter of Credit Crystalised Liability		Rs.1,64,86,460.00 (f)

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The Applicant prays for RC against the Defendants 1 to 7 for a sum of Rs.102,71,07,884.58p along with the interest @18.25% p.a. with monthly rests from 19.06.2008. In the event of default, it is prayed as follows:-

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‚(b) In the event of default in payment of debts due from the defendants 1 to 7 as aforesaid the properties mentioned in ‘A’ (c) Schedule be sold simultaneously and sale proceeds after defraying the expenses incurred in conduct of the sale be shared amount the applicant and the defendant 8 & 9 (Consortium Banks).

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(c) For attachment and sale of all movable properties, stocks, book debts and current assets morefully described in Schedule B(A) hereunder and charged by way of 1^st hypothecation pari passu charge and all mortgaged immovable properties and fixed/block assets, land and buildings and plant and machineries charged by way of 2^nd mortgage charge, morefully described in the ‘B’ Schedule hereunder charged by way of second charge to the applicant/bank pari-passu with Defendants 8 & 9 and are liable without prejudice to other modes of recovery/enforcement. To be sold/realized for the recovery of the said amount and the net proceeds thereon liable to be distributed pro-rate basis between the applicant and the 10^th defendant and 11^th defendant (Consortium Banks).

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(d) For attachment and sale of the shares held by the 1^st Defendant in its sister concerns and subsidiary units namely 6^th and 7^th Defendants.

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(e) For attachment of the excess sale proceeds of C Schedule properties, after full realization of the dues of the first charge holders viz defendants 11, 12 and 13.

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(f) That in the event of there being any shortfall in the net sale proceeds and or net recoveries and or net realization from the sale of the immovable / movable, hypothecated stocks/goods, machineries, etc. then personal decree may be passed against the defendants 1 to 7 jointly and severally to the extent of the said shortfall in favour of the applicant / bank, directing the defendants to pay to the Applicant cost of this Application Charges, expenses incurred by the Applicant/Bank.

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(g) For a Certificate of Recovery as per prayer (a) above under the Provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (The Act 51/1993) and

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(h) Pass such further orders as this Hon’ble Tribunal may deem fit and proper in the circumstances of the case.‛

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It is also pleaded that the D8 had filed OA No.205 / 2005 before DRT, Coimbatore and D9 had filed OA No.156/2003 before DRT, Coimbatore, now transferred to DRT, Madurai in TA No.218/2007. D11 filed TA No.74/2008 at DRT, Madurai, D13 filed OA 39/2003 before DRT, Coimbatore independently and the applicant is a proforma Defendant in which the OA 39/2003 is decreed on 21.02.2008.

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Contours of the Case :- The Ld. Predecessor by an order dated 27.01.2009, had placed D1 to D7, D10 to D12 exparte.

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However, the D1 Company, which went under liquidation by the orders of Hon’ble Madras High Court in CP No.115/2004 dated 10.01.2011 had passed the following order:-

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Para 5 & 6 of the Order :

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‚5. Since the company petition has been filed for winding up of the company in question on the reference made by BIFR, I am of the view that appointing the Official Liquidator as a Provisional Liquidator would not cause any prejudice to anyone. Therefore, I hereby appoint the Official Liquidator as a Provisional Liquidator of the first respondent company in CP No.115 of 2004 and do the needful as per law.

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Consequent upon this appointment of Official Liquidator as a Provisional Liqudiator, the secured creditor / bank shall take steps to implead the official liquidator as a party in all the proceedings pending before the DRT both in Chennai and Coimbatore, as in all these proceedings the Official Liquidator is a necessary party to be heard.‛

¶75

As earlier noted, the applicant bank had assigned its debt in favour of the ARC and the substitution was allowed by the Ld. Predecessor by an order dated 08.10.2018 consequent to which the amended OA is filed.

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This matter is transferred to this Tribunal when it was reserved for orders by the Ld. DRT, Madurai. The transfer is as per the Gazette Notification of the DFS dated 04.10.2022 in SO No.4717(E).

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Upon transfer, one counsel appear for D2 and the Registry was directed to send notices to the applicant ARC and the Liquidator appointed who is made D14 in the amended OA. In spite of notice to the applicant bank none appeared. However the Ld. Counsel appeared for D2 & D5 and D12 on 02.05.2023. It is on 13.06.2023 the defendants 2 & 12 appeared. This Tribunal noted that this is a matter of 15 year old, it directed the parties to file their written arguments for disposal of the case on merits o 13.07.2023. But none responded. In the circumstances this Tribunal is not benefited by the current status of recovery, the fate of D1 Company and the actual claim [upon deducting such recoveries if any] by the Applicant Bank or by the ARC. However considering the long pendency of the case, the matter is being disposed on merits, since the OA filed is to be disposed to its logical end.

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Written Statements found on record :- From the record it is seen that the D8 & D9 who are the members of the consortium pleaded that they are governed under the inter-se agreement dated 25.09.1997. 8^th Defendant contends that it has second charge over the immovable properties and fixed assets of the company and the 1^st charge over the immovable property of the D1 Company measuring 24.1 Cents situated at Tiruppur for which the rights are already decided by the Ld. DRT, Coimbatore in OA No.205/2005. It is also pleaded that the parties are governed under pari passu agreement inter-se among the consortium.

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D9 contends that it has filed TA No.218/2007 and that the rights of the parties are governed under the pari passu agreement.

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In the WS filed by the D13, Standard Chartered Bank, it is reported that D10, ICICI Bank had assigned its interest and thus steps into the shoes of the 10^th Defendant. According to the WS of 13^th Defendant, the Defendant No.10 had

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sanctioned certain loans and security is created by way of 1^st charge, for which OA 39/2003 is filed for recovery of Rs.34,35,99,419/- as on 18.02.2002. Schedule A property is under the charge of this Defendant prior to the earlier charges if any created. Schedule B property is charged to the interest of this Defendant. This Defendant is having 1^st charge in Schedule C property.

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It is also seen from the record that the D14 had furnished a report dated 26.12.2012 to the Tribunal, in which it is contended that following the orders of the Hon’ble High Court at Madras, were passed.

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‚D14 has been appointed as the Official Liquidator as per the order passed in Company Application Nos.1912/20 and 30/2011 in Company Petition No.115/2014 by the Hon’ble High Court of Madras dated 10.01.2010. After the issuance of necessary notices to the Ex-Directors and to the Secured Creditors, the actual possession of the movable and immovable assets of the company has been taken on 01.03.2011 and 02.03.2011. Further, on 07.09.2011, the Hon’ble High Court passed an order in CA No.584 in CP No.115/2004 directing the Official Liquidator to value the aforesaid properties viz. Lot A, B, C and D through M/s. ITCOT Consultancy and Services Ltd., Chennai – 6. In compliance of the order, D14 engaged the above said valuer and submitted the valuation reports in the month of November, 2011 and January, 2012. In order to bring the above said properties for sale an Application was filed by D14 before the Hon’ble High Court of Madras in CA No.136/2012 in CP No.115/2004 on 25.01.2012. The said Sale Application is pending before the Hon’ble High Court of Madras at the stage of service of ‘Notice Hearing’ to the Respondents. As such, all the averments in the Application in OA No.90/08 are denied except those that are specifically admitted herein. The Applicant Bank (Consortium Bank) has not filed any proof by filing Form 66 as required under Rule 151 of Companies (Court) Rules, 1959 so as to prove that the machineries and equipment were leased to them. Therefore, this Tribunal may pass order as it may deem fit and proper.‛

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This report is dated 26.12.2012 and thereafter the correct status is not reported neither by the Applicant nor by the Official Liquidator despite notices and this Tribunal is not given to knowledge of the subsequent developments. Despite opportunities, the parties have not shown any interest to report the status as on date

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with regard to the said proceedings, the recoveries made and the properties sold if any.

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19. Evidence on record :-

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It is seen from the record that on 10.02.2011 the Ld. Predecessor had noted that the affidavit towards evidence is filed and Exhibits A1 to A116 were taken on record and that the matter was posted for CPA if any.

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The CPA is not filed by any of the Defendants except D8 & D9. These Defendants have not marked any documents except stating on the oath that the D8 had filed OA No.205/2005 before the DRT, Coimbatore and that the D8 is having 1^st charge over the immovable properties of D1 Company. In the CPA of D9, it is submitted that D9 is one of the members of the consortium Bank and the rights and liabilities are governed under the inter-se agreement dated 25.09.2007. The D9 also deposed that it had already filed TA No.218/2007. No specific prayers are sought in the CPA nor the evidence adduced to deny the claim of the applicant against D1 to D7.

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In the above background the only point that arises for consideration in this OA is:-

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‚Whether the applicant is eligible for reliefs sought in the OA? If so what relief?‛

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To answer the above issue this Tribunal has perused the evidence adduced on behalf of the Original Applicant Canara Bank. One Mr. V.A.Sequeria, the Manager of the Bank deposed that the Defendant No.1 Company was incorporated in the year 1946 and commencement of the business started in the year 1949. The D1 Company was into the manufacture of Cotton and Polyester Yarn. It is also deposed that this Company was enjoying the credit facilities from the applicant and was availing various credit facilities to meet their working capital. The Defendant No.1 Company

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had also obtained credit facilities from the other consortium banks namely the Defendants 8 & 9. Apart from that Defendants 10 to 13 have also lent the D1 Company. It is also deposed that Defendants 2 to 7 are the guarantors to the various credit facilities. The deponent had marked Exh. A1 to A116.

¶97

The D1 to D7 have not filed their written statement nor did they choose to contest. The averments of the Applicant’s Witness goes unchallenged.

¶98

(A) As per the documents filed in this Tribunal, the one document at Exh. A102 at (Page No.379) is relied by the Applicant Witness. This document dated 09.07.2005 is a revival letter. As per the said document at Exh. A102, it is the revival letter for the purposes of limitation. The same is signed by the Chairman and Managing Director on behalf of the D1 Company. Except this document there are no other documents, which would meet out the purposes of limitation. The same is described as the revival letter by the 1^st Defendant Company duly signed by the 2^nd Defendant. It is made clear in the said letter that the Working Capital consortium agreement dated 25.09.1997 had consisted of hypothecation created by the company on the current assets and all such documents would subsist valid and effective to be enforced against the Company. It is also made clear that the D1 Company acknowledges for the purposes of Limitation Act, the liability of the Company as on 09.07.2005.

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(B) Though in the pleadings in the OA it is submitted that for the purposes of limitation, the BIFR Proceedings initiated upon the audited balance sheet of 31.03.1997 be excluded which is still subsisting as on the date of filing of the OA (since in WP No.(c) 2207 of 2007 was pending as on the date of filing of the OA - before the Hon’ble Delhi High Court against the order of the appellate authority in AAIFR Appeal No.143/2004 disposed on 21.02.2007), the Tribunal notes that the applicant or the ARC had not cared to argue the matter on the point of limitation.

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(C) From the documentary evidence, except the document at Exh.A102, there are no other documents executed by the guarantors acknowledging the debt within the period of limitation. The only documentary evidence worth considering for the purpose of limitation is Exh. A102 which is dated 09.07.2005 executed by D1 Company signed by the 2^nd Defendant, which is discussed supra.

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(D) The other documents allegedly executed by the guarantee revival letters ended by 17.10.2002 at Exh.A93 executed by D1, A94 executed by D3, A95 executed by D5, A96 executed by D6 and A97 executed by D7 which are all dated 17.10.2002. The OA is filed on 19.06.2008. There is no document worth considering making the other defendants liable for the purposes of limitation or to the guarantees they have allegedly executed assuring the repayment by the guarantor in default by the borrower. The guarantee renewal letter at Exhs. A93 to A97 speaks of reaffirmation of the guarantee deed dated 07.03.1995 and these are all dated 17.10.2002. These renewal letters of the guarantee are hit by limitation and the OA is not filed against them within three years of the prescribed period of limitation. These guarantee letters acknowledge the limited liability to the extent of Rs.25.00 Crore each as per the guarantee deed dated 07.03.1995 executed after seven years as could be seen from the document itself which are all cyclostyled letters.

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(E) It is common prudence that to constitute the acknowledgment of liability there must of acknowledgement of the same made in writing and signed and that too must be before the expiry of the prescribed period of limitation. It must be noted that no demand notice was issued to the guarantors prior to filing the OA for recovery of the sums against them. In the circumstances, the prayer of the Applicant Bank seeking recovery of the sums sought to be

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recovered jointly and severally against Defendants 2 to 7 cannot be allowed since barred by limitation for the following reasons.

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(i) The pleadings show that it is D1 who had hypothecated movables described in Schedule A to the plaint.

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(ii) It is Defendant No.1 who had created second charge in favour of the applicant on Schedule B Properties.

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(iii) It is Defendant No.1 who had created mortgage of its property described in Schedule C in favour of the Applicant.

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(iv) It is the 1^st Defendant which issued letter creating second charge on the immovable properties.

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(v) Though it is pleaded that the 1^st Defendant deposited the title deeds concerning the properties morefully described in Schedule C Properties, the documentary evidence adduced at Exh. A1 to A116 does not have any title deeds produced and proved. Therefore the pleadings under the caption ‚Securities‛ is not proved to the fact that Defendant No.1 had created first charge. The Applicant had not produced any documentary evidence like the mortgage by way of deposit of title deeds and there is no instrument proving such deposit of title deeds.

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(vi) After perusal of the documentary evidence adduced, the applicant had relied on the guarantee confirmation letters executed by the defendants as follows:-

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Second Defendant executes the guarantee and covering letters Exh.A66 dated 29.10.1986, Exh.A68 dated 02.11.1991, Exh.A73 dated 15.05.1992, Exh.A80 dated 31.05.1984, Exh.A83 dated 01.10.1984 and Exh.A87 dated 07.03.1995, Exh.A93 is dated 17.10.2002, which is the latest one produced concerning D2.

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The latest guarantee letter is dated 17.10.2002 and the same is barred under limitation.

¶115

The said document at Exh.A93 is a guarantee renewal letter. The name and address of the author from where it emanates or originates is not found. The same is not properly stamped. It is a cyclostyled letter on the letter head of the applicant bank addressed to the Manager of the applicant bank and the blanks are filled up. It only contains the signature of the author and the name is also not revealed from the letter. The same is dated 17.10.2002.

¶116

The only documentary evidence relied by the applicant bank to press the relief against the D2 for a limited amount of 25 Crores as per Exh.A93 is hopelessly barred by limitation and does not conform to the standards of the deed of acknowledgement of debt. Further, such documents cannot be enforced beyond the period of limitation.

¶117

After perusal of the documentary evidence at Exh. A66 to A97 similar documents of different dates are relied allegedly executed by the Defendants 3 to 7. All the latest guarantee letters dated 17.10.2002 allegedly executed by the Defendants 2, 3 5, 6 & 7 at Exh. A93 to A97 are of the similar cyclostyle formats having no name and address of the author, unstamped and all filled up in cyclostyled formats. They are barred by limitation.

¶118

The guarantee deed by D4 is not furnished in the documentary evidence.

¶119

Though these defendants 2 to 7 did not contest the case, applicant which has an onus to prove that the claim against

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them is not barred by limitation, did not choose to substantiate their case. The guarantee letters allegedly executed by the Defendants 2 to 7 discussed above do not bind the liability on these defendants.

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(vii) This Tribunal perused the pleadings and the documentary evidence. In the pleadings under the caption of ‚Securities‛, it is pleaded that D1 had created mortgage of its properties in Schedule C. Such creation of mortgage is not proved by documentary evidence. Not even the date of such creation of mortgage is pleaded, but only an agreement creating second charge over the machineries by D1 is produced at Exh.108 is sworn in the affidavit.

¶123

(viii) At Para-22 of the affidavit though the deponent deposed that Defendant No.1 had mortgaged B Schedule properties, no document is produced. It is seen from the deposition that the mortgage is in favour of the term lending institutions, only the creation of second mortgage is in favour of the applicant that is only an intimation letter at Exh.A109 dated 30.12.1998. Suffice it to say that the pleading in the OA concerning the 1^st Defendant having created mortgage of its properties in Schedule C is not supported by any documentary evidence. There is no deed of mortgage.

¶124

The only documentary evidence by which the liability to be fastened is Exh.A102, which is discussed already. At the cost of repetition it must be noted that the D1 Company had written in unequivocal terms that ‚We do hereby confirm that all the security documents executed by us in favour of you and the member banks in respect of such facilities are subsisting, valid and effective and are fully enforceable against us.‛ This part of the evidence goes un-rebutted. In view of the above documentary evidence and the say of deponent who adduced the evidence, the

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liability of the Defendant No.1 Company to the suit claim cannot be rejected. Thus there shall be an order in favour of the applicant as against the Defendant No.1 only. The claim of the applicant on the amount sought to be recovered against the D2 to D7 cannot be entertained for the reasons aforesaid. Consequently, the following Order.

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: - O R D E R - :

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(a) The TA No.12 of 2023 is partly allowed with costs.

¶129

(b) The D1 Company (which is under liquidation as per the report of the Official Liquidator dated 26.12.2012) is directed to pay Rs.102,71,07,884.58p to the applicant along with the interest @9% p.a. from the date of filing till the realization.

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(c) Due deductions be given to any amounts realized by the applicant either through the Official Liquidator or otherwise, after the filing of this case.

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(d) The Recovery Certificate be issued accordingly and the claim thereof be pursued before the Official Liquidator as per the provisions of Companies Act and the Rules there under since the report of the Official Liquidator dated 26.12.2012 shows that the applicant has not filed form 66 as required under Rule 151 of the Companies (Court) Rules 1959 and such other forms. Consequent to the present order the same be also filed before the Official Liquidator where the remedies of recovery to be worked out, if the proceedings are not closed.

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(e) A copy of this final order be communicated to the parties as required under the rules.

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Sd/-

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(A.S.JAYACHANDRA) PRESIDING OFFICER DRT-I, CHENNAI

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me on this 18^th Day of 2023)

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Asset Reconstruction Company India Limited v. Vijayakumar Mills Limited

Case brief

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Asset Reconstruction Company India Limited v. Vijayakumar Mills Limited

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