Allowed

Ifci Ltd. v. Rohtas Industries Ltd.

DRT29 Jul 2026TA/1273/2022

Case brief

AI extract

What is this about?

Applicant sought recovery of dues from guarantors and principal debtor. Debtor was in liquidation under Supreme Court/High Court orders. Debants argued claims were adjudicated by a Claims Committee and dues already settled. Court held Claims Committee was for revival, not debt adjudication, and dues were unpaid. Application allowed against LRs within limit of inherited assets.

What did the court decide?

Directed Legal Representatives of deceased defendant no.2 to pay jointly and severally Rs.2,02,27,850.60 with interest, limited to the extent of properties inherited by them.

Ifci Ltd. versus Rohtas Industries Ltd. — Company and Corporate | DRT (2026)

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Before SUSHIL^{KUMARRASTOGI, Presiding Officer} Debts Recovery^{Tribunal-Il,Delhi}

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TA No.1273^{OF 2022}

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IFCI LIMITED^{VS MS.ROHTASINDUSTRIESLTD & ORS}

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Reserued on =^2l,07-2026

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Pronounced on^{z 29.07 -2026}

IFCI Limited

-APPlicant FI

Vs.

Rohtas^{IndustriesLtd'}

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(now in liquidation^{represented by the Official} Liquidator attached^{to the PatnaHigh Court)}

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Shri. A.K. lain^{(since deceased)}

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Smt.^{Indu Jain (since deceased)}

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Legal Representative^and Wo^{Late Shri' A'K' lain}

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(i). Shri Sameer^{Jain(alreadyon record as} defendant^no'28)

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(ii). Shri Vineet lain^{(alreadyon record as} defendant^no.2C)

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Shri Sameer^Jain

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Legal Representative^{and S/o LateShri' A'K' Jain}

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2C. Shri^VineetJain

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Legal Representative^{and S/o Late Shri' A'K' lain}

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Industrial^{DevelopmentBank of India (IDBI)}

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Industrial^{CreditInvestment}

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Corporation^{of India Ltd} - Defendants

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Present:

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Mr. R.P. Aggarwal,^{counselalong with Mr'} Kuldeep^{Kumar, counsel and Mr' Shubham} Gupta, Counsel^{for aPPlicantFI'}

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Mr. Ashish^{Verma, counselalong with Mr'} NikhilThakur,^{counsel and Mr. Samarendra} Kumar, Counsel^{for LRs of defendant no'2'}

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None for other^defendants'

TANO. 1273^of 2022

FINAL ORDER

This original application^{has been flled by the} applicant, on^{14.05.1986 before the Hon'ble High Court} of Delhi and^{the same was transferredto DRT on} 25.04.tgg6,^{through Shri. M'V. Muthu, Manager} (Technical) of the^{applicantagainst the defendant} nos.1 and^{2 for recoveryof a sum of Rs'2,02,27,850'60} together with^{cost,charges and pendentelliteand} future interest @160lo^{from date of filing of this O'A' till} the realization^{in full.}

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The brief^{facts of the case are that at the request} of the defendant^{nos.1 and 2, the applicant agreedto} advance to^{defendant no.1 a loan of Rs'1,90,80,000/-} for the expansion^{and moderationof the paper mills of} defendant^no.1 at^{DalmiaNagar, Bihar on the} conditions -^{inter alia, that defendantno'2 shall} executed an^{irrevocableand unconditional personal} guarantee in his individual^{capacityfor the due} repayment of^{the loan. It is submitted that pending} flnalization of^{the regular agreementand other legal} formalities and^{documentation,defendant no'1 being} the urgent^{need for money, the defendant on or about} 20.10.1978^{agreed to advancedto defendant no'1 a} bridging^{loan of Rs.52,50,000/- repayableon demand} by this defendant^{inter-alia,on the guarantee of} defendant^{no.2. The defendantno'1 executedall} necessary^{loaning documents on 20'10'1978' Again, at} the request^{of defendant nos.1and 2, the applicant} sanctioned a^{bridging loan facilityof Rs'15,00,000/-'} The defendant^{no.1 executed all necessaryloaning}

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el.

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TANO.¹²⁷³ of2022³

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documents^{on 30.03'1979 and 02'04'1979' Again' at} the request^{of defendant nos'1 and 2, the applicant} agreed to or^{about 07.04.L982to grant a fufther} bridging^{loan of Rs.42,50,000/-'The defendant no'1} executed^{a deedof pledge dated 07'04'1982 whereby} defendant^{no.1 agreed that the aforesaid debentures} of the aggregate^{face value of Rs'105'25Lakhsshall be} considered^{as pledge for the said bridging loan of} Rs.42,50,000/-^{and further pledgeddebentures of the} face value of^{Rs.6.98Lakhs so as to form security for} the said bridging^{loan as also for the two earlierfurther} debentures^{of Rs'6,98,000/-are given in scheduleto} the said deed^{of pledge. The defendant no'l also} executed a^{hypothecation agreementdated} 07.04.1982^{hypothecatingthe whole of the movable} assets of the^{paper expansionp@ect at Dalmianagar'} Bihar of defendant^{no.1 save and expect books debts'} to the defendant^{by way of security for the said} bridging^{loan of Rs'42,50,000/-'Out of the said} bridging^{loan an amount of Rs'35,50,000/-was} disbursed^{by applicantto defendant no'l by cheque} dated 12.04.1982.^{The said chequewas encashedby} defendant^{no.1. Subsequently, on 14'10'1982 a regular} common loan^{agreementwas executed betweenthe} applicant^{and defendantnos'3/ IndustrialDevelopment} Bank of India^{(IDBI) & 4/ Industrial CreditInvestment} Corporation^{of IndiaLtd on the one hand and defendant} no.1 on the^{other whereby the applicant and defendant} nos.3/ Industrial^{DevelopmentBank of India (IDBI) & 4/} Industrial Credit^{InvestmentCorporationof IndiaLtd} agreed to^{lend to defendantno'1 Rs'190'80Lakhs'} Rs.330^{Lakhsand Rs.189.20Lakhsrespectively'By way} of security^{for the said loan of Rs'1,90,80,000/- and the}

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g.l

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aforesaid^{loans grantedby defendant nos'3/ Industrial} Development^{Bankof India (IDBI)and 4l IndustrialCredit} Investment^{Corporationof India Ltd, the defendantno'1} by a common^{deed of hypothecationdated 14'10'1982} executed^{by defendantno'1 in favourof the applicant} and defendant^{nos'3/ Industrial DevelopmentBank of} India^{(IDBI) and 4t IndustrialCredit Investment} Corporation^{of India Ltd, hypothecatedthe whole of the} moveable^{plant and machinery, machine spares' tolls} and accessories^{and other moveableboth present and} future but^{excludingJaipur assets containing of} vanaspati^{plant whether installed or not and whether} lying loose^{or in case or lying in the stores on or about} or shall^{thereafter from time to time during the} continuance^{of the security of these presents be} brought^{into upon or stores or be in or about the} defendant^{no.l's factories, premisesand godowns or} wherever^{else the same way be or be held by any party} to the order^{or dispositionof defendant no'1 in the} course of^{transit or on high sead or on order or delivery} however^{and wheresoever in the possession of} defendant^{no.l and either by way of substitution or} addition'^{The said security by way of hypothecation} ranks^{pari-passu betweenthe applicant and defendant} nos.3/ Industrial^{DevelopmentBank of India (IDBI)and 4l} Industrial^{CreditInvestmentCorporationof India Ltd' The} defendant^{no.1 was order to be wound up by an order} dated^{24.10.1988of the Patna High Court and the} official^{liquidatorwasappointedas the liquidator of the} defendantno.l,whoisthenowrepresentingthesaid defendant^{no.1. It is submitted that duringthe} pendency of the^{O'A, the defendant no'2l Shri' A'K'} Jain was^{died on 03'02'1999and the LRs of defendant}

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no.2/ Shri.^{A'K' Jain were impleadedin the present} OA. Thereafter^{one of the LR of the defendant no'2} i.e. defendant^{no.2(A)Smt' Indu Jain (w/o Late Shri} A.K. Jain)^{was also died on t3'07'202L and herLRs} were already^{on record as defendant no'2 B & 2C'}

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It^{is fufthersubmitted that the defendants} enjoyed^{and utilized the Loan facility'but failed to} maintain^{the financial discipline and failed to repaythe} due amounts.^{The applicantbank requested the} defendantstoregularizetheloanaccountbyvisitsand lefters,^{but there was no response from the} defendants'Therefore,theapplicantbankserueda notice dated^{09'08'1984and 16'04'1985 to the} defendants,^{demandingthe amountdue as on that} date,^{butJailedto recover the same Thus' the present} O.A.ff.A'^{is preferred by the applicant bank to recover} its dues.

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4 On notice^{by this Tribunal'defendantnos' 3/} of^India (IDBI) and Industrial DeveloPment^Bank no.4l^Industrial Credit Investment defendant Corporation^{of India Ltd put appearancethrough} counsel^{but failed to file written statement' Thereafter'} thedefendantnos'3/IndustrialDevelopmentBankof India^{(IDBI) & defendant no'4/ Industrial Credit} Investment^{Corporationof India Ltd failed to put} appearance^{in the matter' Accordingly' the defendant} nos.3i^{IndustrialDevelopment Bank of India (IDBI) &} 4/ Industrial^{CreditInvestmentCorporation of IndiaLtd} were^{proceeded againstexparte on 06'11'2001' The} and defendant^no'2(A)i'e', LR's of^{defendantno'2} defendantno.(2B)/Shrisameer]ain&(2C)/ShriVineet s,\

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lain Put appearance^{through counseland filed} written^{statement and evidence'}

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5.^{In the written statement of the LRs of defendant} no.2 and^{defendant no'2 (A) have denied the fact} mentioned^{in the O.A' It is submitted that the original} application^{as filedby the applicantis not maintainable} as the^{same is not filed, signed and verified by an} authorizedperson.Itissubmiftedthattheapplicanthas not furnished^{the particularsof the guidelines and the} notification^{on the basis of which the applicanthas} alleged^{charged the interest' In the absence of the} details^{as to the said notiflcationsand guidelines the} original^{applicationcannot be entertained' The} applicant^{is bound to make specificaverments and give} specific^{details in its original application whichhas got} material^{bearing on the subject matter' However' the} applicant^{has failed to do so, therefore' the original} application^{is liable to be dismissed' It is submittedthat} the applicant^{has not given a correct statementof} account'^{The applicant has chargeda highly excessive} rate of^{interest, in contraventionand violation of the} guidelines and^{circulars issued by the ReserveBank of} India which^{the defendants are not liable to pay' It is} submittedthatthepresentoriginalapplication,flledby the applicant,^{is barred by the period of limitationand} the original^{application is silent on the cause of action} and does^{not explain as to when the causeof action} lastaroseforfillingthepresentoriginalapplicationand hence^{the original applicationis hopelesslytime barred} and is^{liable to be dismissed' It is furthersubmittedthat} defendant^{nos'2, 3 (now defendant no'28) and 4 (now} defendantno.2C)arenotnecessarilypartyinthe <A

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present suit^{in as much as they are neither the} borrowersnortheguarantors.Hence,nothingcanbe recoverd^{from the defendant nos'2' 3 (now defendant} no.2B)^{and 4 (now defendant no' 2C) in their personal} capacity.^{The said defendantswere neitherthe} borrowersnortheguarantorsinthepresentcase.Itis submitted^{that the afore said matter was previously} fited before^{the Hon'ble High Court of Dethi sometimes} in May,^{1986 and was registeredas Suit No'1199 of} 1986.^{It is further submittedthat a Winding Up Petition} for winding^{up of M/s Rohtas Industries Ltd' the} defendantno.l(PrincipalDebtor)waspendingbefore the^{Patna High Court being the Company Application} No.3 of^{1984. Vide orders dated 22'5'1985'the Hon'ble} PatnaHighcourtpassedorderforappointmentof Provisional^{Liquidator for the said defendant no'1' In} the^{mean while a Public Interest Litigation was} commenced^{before the Hon'ble SupremeCourt and the} same^{was registeredas CivilWrit Petition No'5222/85'} The^{Hon'ble Supreme Couft was pleased to stay the} Winding^{Up proceedings'The Hon'ble Supreme Court} also^{referredthe matter to the BIFR twice and the BIFR} ultimately^{repoftedthat the various undertakings of Mis} Rohtas^{IndustriesLtd were not viable for various} reasons.Duringthecourseoftheproceedingsthe Hon'ble^{Supreme Courtwith a view to make an attempt} to rehabilitate^{the various IAS officer aforesaid} undertakings,^{appointed as the Rehabilitation} Commissioner^{and directedthe Governmentof Indiaas} well as^{the State Governmentto pay a sum of Rs'40} Crores^{for that purpose out of whichRs'15 Crores were} directedtobeheldseparatelyformeetingtheliabilities of the^{various securedcreditors includingthe financial}

e..\

TANO.^{1273 of 2022}

institutions^{and banksincluding the applicantin} the OA. It^{is furthersubmittedthat while appointingthe} Rehabilitation^{Commissioner,the Hon'ble Supreme} Couft, with^{a view to assess the liabilities of M/s Rohtas} Industries^{Ltd', towardsthe securedand unsecured} creditors^{made further directions to appoint a Claims} Commiftee^{to be headedby a retired judge of a High} Court and^{accordingly a Claims Committeewas} appointed^{which considered the claims of various} financial^{institutions and banks, includingthe applicant} in the^{O.A., and preciselyassessedthe liabilities' It is} submittedthattheapplicantintheo.A.dulyplacedits claim^{before the Claims Committee'The Hon'ble} Supreme^{Courtvide its flnal orders dated 18'10'1995} referred^{the matter to the Patna High Court to resume} the winding^{up of M/s RohtasIndustriesLtd'' and also} issued directions^{to consider the claims of various} creditors^{with referenceto the report of the Claims} Committee^{including that of the applicantin the present} O.A. It^{is submittedthat the report of the Claims} Committee^{thus stands merged in the orders of the} Hon.bleSupremeCourtoflndiaandtheapplicantinthe O.A., who^{has acquiesced to the recommendationof} the Claims^{Committeeand is bound by the orders of the} Hon'ble^{Supreme Court to the effect that the claims be} consideredbytheCompanyJudge'PatnaHighCoutt' has no^{right or locus standi to file/pursuethe present} O.A. in^{view of the aforesaid ordersdated 18'10'1995} of the^{Hon'ble Supreme Court of India and thus this} Hon'ble^{Tribunal has no occasion and ought not to} reconsider^{the present OA' The applicantin the O'A'} cannotbeallowedtoruntwoparallelproceedingsfor the same^{claim in two different forum' It is further}

TA NO. 1273 of2022

submitted that^{duringthe course ofproceedings} before the^{Hon'ble SupremeC-ourt of India was pleased} to direct the^{Claims Committee to get a valuation of the} total assets of^{M/s RohtasIndustriesLtd', by an} approved and^{authorisedvaluer and accordinglyM/s} Price Waterhouse^{of Calcutta was appointedto value} the assets.^{The said valuers reported to the Clams} Committee^{that the value of the assets of M/s Rohtas} Industries^{Ltd was aboutRs'250 Crores and the} Rehabilitation^{Commissioner accordingly reported to} the Hon'ble^{Supreme C-ourt the aforesaidvaluation} which finds^{a reference in the aforesaid ordersdated} 18.10.1995^{of the Hon'ble SupremeCourt of India'} The^{presentmatter was, previouslyflled before the} Hon'ble Delhi^{HighCourt and was registeredas Suit} No.1 1199/86'^{It is submitted that the Provisional} Liquidator^{had been appointed in the WindingUp} Petition^{by the Hon'ble Patna High Court the said suit} could not^{be proceeded with in law withoutthe} permission of^{the said company court in view of the} provisions of^{Section446 of the CompaniesAct' 1956'} Fufther^{since the provisions of the Sick Industrial} Companies^{(Special Provisions)Act' 1985 had also been} invoked^{thereforeeven the consentof the BIFR is also} required^{even for continuing with the proceedings in} thesuit.Itissubmiftedthatcontrarytotheaforesaid thesaidsuitwaswronglytransferredbytheregistryof Delhi High^{Court to this Honble Tribunal'It is fufther} submitted^{that the applicanthas already put up its claim} before the^{Claims Committeeappointedby the} Rehabilitation^{Commissioner pursuantto the orders of} the Hon'ble^{Supreme Couft aforesaid' As per the} provisions of the^{said orders.dated18'10'1995the} g,^

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TA NO. 1273 of 2022

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report of the said Claims^{Committeeis toOe} decided by the Company^{Court at Patna High Court' The} present Original Application by^{the applicantbank} therefore is not^{maintainable and cannot be proceeded} with. The^{present OriginalApplication by the applicant} bank cannot be^{allowed to pursue two independent} proceedings for the same^{set of facts. Besidesthis in} view of the^{pendency of the proceedings before the} Honble Patna^{High Couft pursuant to the ordersof the} Hon'ble Supreme^{Court in relationto the subject} matters involved^{in the present Original Applicationthis} Hon'ble Tribunal^{has no jurisdiction to entertainand try} the^{present O.A. It is furthersubmittedthat present O'A} is even otherwise^{not maintainableand this Hon'ble} Tribunal has^{no jurisdiction to entertain the same in} view of the^{provisions of Section446 of the Companies} Act, 1956,^{withoutleave/permission/ consent of the} Company^{Court. it is submittedthat the presentO'A' is} even otherwise^{not maintainableand this Hon'ble} Tribunal has^{no jurisdiction to enteftainthe same in} view of the^{fact that in law there is no application as} contemplated^{underRDB Act, 1993 and the Debt} Recovery^{Tribunal (Procedure) Rules, 1993made} thereunder^{as there has been no compliance of the} provisions thereof^{by the applicant and even the} Registrar has^{not passed any orders confirmingthe} compliance^{thereof. It is further submittedthat the} present O.A. is^{even otherwise not maintainableand} this Hon'ble^{Tribunal has no jurisdiction to entertain the} same in view^{of the fact that the provisions of the RDB} Act, 1993^{and the Debt Recovery Tribunal (Procedure)} Rules, 1993^{made thereunder do not apply to a} guarantor. The defendant^{no'2 is alleged to be a} s^

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I I

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guarantor. The^present O.A'^{is therefore,not} maintainable and^{hence is liable to be dismissed' It is} submitted that^{the present O.A. is evenotherwise not} maintainable^{as againstthe defendantno'2 in view of} the fact that^{the applicant bank has already approached} the Claims^{Committeeand is conductingits case for} recovery therein^{and has waived its right, if any, against} Late Shri^{A.K. Jain' It is further submitted that the} defendants^{wereable to procurea copy of the Report} of the Claims^{Committee(which had earlier been} appointed^{under the directionsof the Hon'bleSupreme} Court of^{India, for determining,among others' the} amounts^{due by the PrincipalDebtor RohtasIndustries} Limited to^{the Banks and Financial Institutions)} submitted^{by the said Committeebefore the Hon'ble} Supreme^{Couft of India in the Writ PetitionCivil No'} 5222 of^{1985 titled as "Workmen of M/s Rohtas} Industries^{LimitedVs. M/s Rohtas Industries Limited"'} It is apparent^{from the said Claims Committee's Report} that the^{applicant had indeed submitted a claim before} the said^{Claims Committee' The said Claims Committee} hadrecommendedforpaymenttotheapplicantonlyof an amount^{of Rs.81.12 lacs, after deducting an amount} of Rs.65.07^{lacs that had alreadybeen realizedby the} applicant^{from the PrincipalDebtor RohtasIndustries} Limited and^{the saidrecommendedamount was also} subject to^{further reductionon accountof waiver of} interest,^{reduction in the rate of interest'etc' It is} further submitted^{that the policy of the Financial} Institutions^{not only to substantially reduce the rate of} interestbutalsotowaivethecompleteoutstanding interestinadditiontosacrificingasubstantialpartof the^{principal amount itself while seftlingtheir account} 9'\

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TA NO. 1273^{of 2022}

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with Sick^{Industries. Whereas the condition of} the Principal^{Debtor RohtasIndustriesLtd' in this case} is worse than^{that of a SickCompany,the same having} already been^{wound up/ liquidatedeven after the} efforts for its^{revival under the supervision of the} Hon'ble Supreme^{Court of India,and infusion of huge} amounts of^{money by the State Govt' of Bihar at the} instance of^{the Hon'ble Supreme Court of India in} pursuance of the^{directions issued under the above} mentioned^{WP (Civil) No' 5222 of 1985, did not bear} fruit even^{after the appointmentof a full time} Rehabilitation^{Cornmissioner from the Bihar State IAS} Cadre to^{Rehabilitate the Company' It is submitted that} vide Orders^{dated 22nd May, 1986' the Official} Liquidator attached^{to the Hon'ble PatnaHigh Court} was appointed^{as the ProvisionalLiquidator of the} defendant^{no. 1 i.e. M/s. Rohtas Industries Limitedand} was directed^{to take chargeof the propefties of the said} Company.^{Thereafter, the Ld/ Official Liquidator started} selling the^{various assets and properties of the Principal} Debtor M/s^{RohtasIndustries Ltd' from time to time} and realized^{substantial funds from such sale'For} example,^{vide Order dated 11'01'2007the Hon'ble High} Court of^{Patna was pleasedto direct the sale of some} properties of^{M/s RohtasIndustriesLimited'the} Company^{under Liquidation,to the Indian Railwaysfor} a sum of^{Rs'140 Crores' Similarly, videOrders dated} 31.05.2007,^{sale of dry wood was ordered in favour of} one Shri Sajid^{Parwez for Rs'1,95,000/-' There have} been many^{similarsales in the past and this processis} an ongoing^{process and the current status of the} Winding up^{proceedingsof Rohtas Industries Ltd'' to} the best^{of the information of the defendantsis that the}

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same is still^going on. The^{defendantshavelearnt} from a newspaper^{report that the Gow' of India,} Railway Board^{(Ministry of Railways), New Delhi has} invited request for Qualification^{vide a Public Noticefor} setting up a new^{factory at Dalmianagar where the} industrial complex of^{the PrincipalDebtor Rohtas} Industries Ltd.^{is situated' This is after havingsecured} the above-mentioned^{propertiesof RohtasIndustries} Ltd., through the^{Hon'ble Patna High Court for} Rs.140.00^{crores.The said amount of Rs'140Crores} and various^{other amounts which would have been} realized by^{the sale of the various assets and properties} of the said^{PrincipalDebtor Companyunder Liquidation'} over a^{number of years, are lying with the Ld' Official} Liquidator attached^{with the Hon'bleHigh Court of} Patna and the^{same is more than sufficient and} available^{for the applicant to satisfy its claim, as may} be finally^{and legally determined' The claims before the} Claims Committee^{were filed by the applicant directly} before the^{said Committee.This fact findsspecific} mention in the^{report of the Claims Committee'} Similarly, the^{objectionsto the Repoft of the Claims} Committee^{submittedbefore the Hon'bleSupreme} Court of^{India werealso filed by the applicant directly} before the^{Claims Committee' The Order dated} 18.10.1995^{of the Hon'ble Supreme Court of India takes} full cognizance^{of the fact of the claimsof the applicant} having been^{submitted and also of the objections filed} by the applicant^{to the Repolt of the ClaimsC'ommittee'} Hence, neither^{of these facts can be disputed or} controverted^{by the applicant' All these records were} remitted by the^{Hon'ble Supreme Court of India to the} Hon'ble Patna^{High Court an( form part of the Winding} c\

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up proceedings of the^{Principal Debtor Rohtas} Industries Ltd.^{which are currently pending beforethe} Hon'ble Patna High Court.^{It is submitted that after} selling all the assets^{and propertiesof the Principal} Debtor Rohtas Industries^{Ltd. and realizingthe sale} proceeds thereof, the Official^{Liquidator would in due} course of time^{and process distributethe same to the} various claimants,^{includingthe applicantas maybe} determined by^{the Official Liquidator and the Hon'ble} Patna High Court^{and after considering the} recommendations^{of the Claims Committee' The} defendants^{beg to submitthat even though the} applicant had^{submitted a claim of Rs'383'88 lacs} before the^{Claims Committee, the said Claims} Committee^{had recommendedonly Rs'81'12 lacs and} that too subject^{to further waiver/ reductionof interest} etc. It is submitted^{that the observationsof the Claims} Committee^{in relation to the conduct of the applicant} about the^{claims submitted by it to the said Claims} Committee^{that despite havingreceived a sum of} Rs.65,07,000/-^{from the PrincipalDebtor Rohtas} Industries^{Ltd',IFCI i.e. the applicanthad failed to give} credit of this^{amount in their claims'The defendants} were able to^{procure various orders of the Hon'bleHigh} Court of Judicature^{at Patna passed in Company} Petition No.^{3 of 1984, beingthe Winding up Petition of} the Principal^{DebtorRohtas Industries Ltd' from time to} time after^{the year 2004 which would have a direct} bearing on^{the present O.A. No' 701 of 1996' While the} Winding Up^{proceedings of the PrincipalDebtor Rohtas} Industries^{Ltd. werepending beforethe Hon'blePatna} High Court,^{various developmentsof great signiflcance} in support^{of the case of the defendants took place'The}

TANO. 1273^of 2022

said developments^{also contradicted the stand} that had been^{taken by the applicant hereinbefore not} only this^{Hon'bleTribunalbut also before the Hon'ble} Appellate^{Tribunalin the said Appeal No' 320 of 2004'} It is submitted^{that the applicant appearedbefore the} Hon'ble Patna^{High Couft in the liquidation proceedings} of M/s^{Rohtas Industries Limited (the principal debtor} of IFCI)^{and filed an Applicationbeing IA No' 1428 of} 2009 on^{or around 02.03.2009 under Sections 529 and} 529 A of^{the Companies Act, 1956 and underSection} 151 of the^{C.P.C. as a secured creditor wherein and} whereby^{it admitted various facts whichhad so far been} denied by^{the applicant in the current proceedings} before this^{Hon'bleTribunal'In the said application} sought an^{interim order for paymentof at least the} alleged admitted^{principal amount to the tune of} Rs.37.93^{Lakhs as well as for another sum of Rs'1'65} Crores to^{be paid to another financial institutionviz'} IDBI who^{is not a party in these proceedings'It is} fufther submitted^{that the applicantIFCI has always} submitted^{and maintainedits stand before this Hon'ble} Tribunal^{that it was not pursuing remediesin different} (i.e. more^{than one) forumsfor the same dues owed to} it. However,^{the various eventsthat have taken place} and the^{various additional documents now sought to be} brought on^{record by the defendants clearly prove} beyond^{doubt that the actualfacts are to the contrary} and the^{applicantIFCI is indeed pursuingtwo} independent^{proceedings in two different forums for} the recovery^{of the same alleged dues and with the} same set of^{facts. Further, by participatingin the} proceedings before^{the Hon'ble PatnaHigh Coutt'} extension of^the only an which Proceedings^are s^

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proceedings initiated by the High Powered Claims Committee constituted by the^{Hon'bleSupreme Court,} which has already fully and substantially^{quantified and} recommended the^proper and final dues owed^{by the} Principal Debtor Rohtas Industries^{limited (save &} except the objections filed thereto by^{the financial} institutions, and save & except further^{reduction to be} made by the claimants) to all creditors^includingthe applicant IFCI, and having in fact^{even receivedthe} payment of its dues from the Official Liquidator in terms of the adjudication by the Claims^{Committee, the} applicant IFCI has bound^{itself to pursue its remedy} before the Hon'ble Patna^{High Couft only. Further, it is} evident that the applicant IFCI^{has elected its remedy} and the same is reaffirmed by^{its actionsin filing the} impugned application before the^{Hon'ble Patna High} Court, which has also accepted^{the sameon record and} made further directions to the^{applicant IFCI to file its} claim before the Official Liquidator of^{M/s Rohtas} Industries limited by 30.06.2009^{and by its actionof} actually receiving the^{payment from the Official} Liquidator and undeftaken to^refund the^excess payment received, if any. It is submitted that the applicant IFCI had even earlier^{also so electedby} participating in the proceedings before the Hon'ble Claims Committee set up by the^{Rehabilitation} Commissioner under the directives of^{the Hon'ble} Supreme Court of India.^{Therefore, it is prayed that this} Hontle Tribunal may dismiss the^presentO.A.

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The applicant bank as^well as the^{LRs of} defendant nos.2 have filed their^{respective evidence.}

TA NO. 1273 of 2022

Heard the Ld. Counsels of the applicant bank and LRs ofdefendant no. 2 and also perused the record.

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The first contention of the Ld. counsel of the applicant is that in 1984 a company petition CP No.3/1984 was filed at Honble Patna High Court against the defendant no.1. On 16.04.1985 the applicant issued letter to defendant no.2 invoking guarantee and calling upon defendant no.2 to make a payment of Rs.1,52,69 ,0691- in terms of the guarantee deed dated 10.11.1982. In the above case the defendant no.1 has denied all the claims of the applicant and filed the reply. The defendant no.2 has also filed the reply on 06.06.2025 denying the liability to pay any dues. The workmen of defendant no.l approached the Hon'ble Supreme Court of India by way of Writ Petition C(52221t985) seeking inteference to revive the defendant no.1 and rehabilitate the workman. The Hontle Patna High Couft ordered the winding up of defendant no.1 on 22.05.1986 and appointed a Provisional Liquidator in winding up company petition. The claim of the defendant is that the Hon'ble Supreme Couft in the Writ Petition has directed the State of Bihar to appoint an Authorised Officer from the senior IAS Cadre to be Rehabilitation Commissioner and Provisional Liquidator to administer all assets of defendant no.1 which has been taken over under the orders of the Hon'ble Patna High Court. The officer was entrusted with the^power to take over the assets and further directions were passed that the assets of defendant no.1 incumbered with the financial institution cannot be proceeded against for a period of one year and there shall be a moratorium for the same and the limitation perio{ w;p also suspended. The sl'

¶88

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TANO. 1273 of2022

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moratorium was kept extending by various orders of the Honble Supreme Court until 31.12.1995. It is further submitted that the State Government undertook to deposit Rs.15 Crores and Union of^India was directed to deposit Rs.15 Crores with^the Administrator which may be utilized for^{payment of} wages and disbursement of secured^loans of^financial institution from which defendant no.1^has taken^loan and mortgaged its assets. Out of^{Rs.300 Crores,Rs.6} Crores was given by the State Government as^grant and Rs.24 Crores was to be^paid by^{the defendant no.1.} The defendant no.1 could not be^{reviveddespitebest} efforts and therefore, the Hontle Supreme^Court constituted a Claims Committee. The^Claims Commiftee filed its report on^{09.10.1991.Itis} submitted that by the Claims Committee it^was recommended that an amount of Rs.1,46,18,9321- & paid to the applicant out of which Rs.65,07,000/- was already realized and therefore, only a balance^of Rs.81,11,932/- was left. It is submitted^{that the} Honble Supreme Court has again directed that efforts may be made to revive the defendant^{no.1 and it was} directed that the defendant no.1^{may be sold through} public auction. The defendant no.1 was^put for auction but could not be sold as the no bid^{wasreceived as per} valuation report. Therefore, the Hontle^Supreme Court on 18.10.1995 has came to conclusion that revival of defendant no.1 is not feasible and further directed that^proceedings before the Hontle^Patna High Court shall be resumed. It is submitted that the applicant has already submitted his claim before^the Claims Committee and in the winding up^proceedings before the Honble Patna High Court,^therefore, applicant cannot be^permitted to^proceed with the^OA

TA NO. 1273 of 2022

and therefore, the OA is liable to be dismissed.^On the other hand the Ld. counsel of the applicant FI has submitted that the claim of the applicant^{has not been} paid by the defendants and no order has been^passed against the applicant that the applicant^{cannot pursue} this OA against the defendant and therefore,^the proceedings initiated under the Companies Act and proceedings before the Honble Supreme Court cannot restrict the applicant from claiming the amount against the defendants. In this regard I have^{perused the} entire record. From^perusal of the^{record it is clear that} a Writ Petition has been filed before^{the Hontle} Supreme Court for rehabilitation of the^workmenand revival of the defendant no.l. Despite being taken^so much efforts and appointing^{Rehabilitation} Commissioner, the defendant^{no.1 could not be revived} and therefore, ultimately the Hon'ble^{Supreme Coutt} has resumed the^proceedings before the Honble^Patna High Couft under the Company Petition.^{Therefore,the} order^passed by the Hon'ble Supreme Court^cannot debar the applicant FI from taking action under^the provisions of the RDB Act for recovery of their legitimate dues. So far as the company^{petitionbefore} the Honble Patna High Court is concerned,^{I havegone} through the record. From^perusal of the record^{it is} clear that the claim of the applicant has not been^finally decided by the Hon'ble Patna High Coutt.^Therefore, the applicant has every right to^proceed under^{RDB Act} for recovery of their legitimate dues. Therefore, the contention of the defendants that the^{present OA is} liable to be dismissed on the^ground that the Claims Committee has adjudicated the amount to be^{paid and} the amount has been^paid cannot be accepted.^The Claims Committee has been constituted for^revival of

¶95

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TANO. 1273of2022 20

¶97

the defendant no.1 and has nothing to do to quantify the dues of the applicant. From perusal of the entire record it is clear that the claim of the applicant has not been adjudicated either by the Hontle Supreme Couft or by the Honble Patna High Court. Therefore, the contention of the defendants has no force.

¶98

The next contention of the defendant is that all amount has already been paid to the applicant and therefore, the defendants are not liable to pay any dues. In this regard I have^perused the record and also gone through the statement of account filed by the applicant FI. From^perusal of the entire record it is clear that the dues ofthe applicant has not been paid by the defendants and therefore, the contention of the defendant has no force.

¶99

The next contention of the defendant is that the defendants have never executed the deed of guarantee and therefore, the applicant bank cannot proceed against the defendants. In this regard I have perused the record. From perusal of the record it is clear that the applicant has duly proved the execution of the guarantee and has filed the evidence in this regard. The evidence filed by the applicant can be duly accepted as per Banker's Book Evidence Act. Therefore, the contention of the defendant has no force.

¶100

The next contention of the defendant is that the applicant is charging exorbitant rate of interest. It is submitted that the applicant is charging an interest @l7o/o^p.a. and^liquidated damages @2olo. It^is submitted that such a high rate of interest cannot be g.)

¶101

TANO. 1273 of2022 2l

¶102

permitted to be recovered from the defendants. On the other hand the Ld. counsel of the applicant FI has submitted that the applicant FI is claiming agreed rate of interest. From^perusal of the record it is clear that the applicant is claiming the rate of interest as^per agreement entered into between the^pafties. There is no ground to hold that the rate of interest claimed by the applicant is too high. When the defendant has entered into an agreement accepting the terms of the agreement, there is no occasion for this Tribunal to hold that the rate of interest is too high. The debt has been taken for the commercial^purpose and therefore, the rate of interest shall be^governed by the agreement entered into between the^parties. Therefore, it cannot be said that the rate of interest is so exorbitant which requires interference of the Tribunal. Therefore, the contention of the defendants has no force.

¶103

The next contention of the defendant is that the LRs of defendant no.2 have not inherited any^property from defendant no.2. Therefore, the LRs of defendant no.2 are not liable to pay any dues. It is further submitted that the OA may be dismissed against the LRs of defendant no.2 as they have not inherited any property from defendant no.2. On the other hand the Ld. counsel of the applicant has submitted that the LRs of defendant no.2 has inherited the propefi from defendant no.2 and are liable to^pay the dues of the applicant FL In this regard I have considered the contention of the defendants. When an application under Section 19 of the RDB Act has been filed before this Tribunal and during pendenry of the original application, one or any of the defendant expires, the legal representative of the deceased defendant can be held liable only to the extent they have inherited the

9tr,

TA NO. 1273 of2022

propety from the deceased defendant. The amount of the liability on the legal representatives of the deceased shall be restricted only to the extent of the property inherited by them. There is no independent liability of the legal representative/ legal heir. In an application under Section 19 of the RDB Act this Tribunal has to decide whether the amount claimed by the applicant is liable to be recovered from the defendant and a recovery ceftificate may be issued or not. At this stage this Tribunal has no authority to dispose of the claim of the rival^pafties as to whether they have inherited any property or not. Once the recovery certificate is issued, the Ld. Recovery Officer will proceed under the recovery certificate and at that time it may be decided as to whether any LR has inherited any property from the deceased defendant. Therefore, this^plea cannot De decided by this Tribunal in an OA filed under Section 19 of the RDB Act but it has to be decided under Second Schedule of Income Tax Act and under Chapter V ofthe RDB Act by the Ld. Recovery Officer.

¶108

From perusal of the entire evidence, it is clear that the defendants have failed to prove their case as claimed in the written statement. On the other hand, the applicant bank has proved his case against the defendants and therefore, the defendants are liable to pay jointly and severally the amount claimed by the applicant bank and the OA of the applicant bank is liable to be allowed.

¶109

In the light of the above discussiong the present TA deserues to be allowed.

e',\

TANO. 1273of2022 23

ORDER

I hereby allow this T.A. of the applicant bank and direct the LRs of defendant no.2 Shri A.K.Jain namely Shri Sameer Jain and Shri Vineet Jain to^{pay jointly} and severally to the applicant a sum of Rs.2,02,27,850.60 along with cost, expenses and interest @ L7o/o from the date of filing of this O.A. which has become T.A till the date of realization. However, the liability of LRs of deceased Shri A.K. Jain/defendant no.2 namely Shri Sameer lain and Shri Vineet Jain is limited to the extent of property/assets inherited by them from deceased Shri A.K. lain and Smt. Indu Jain.

¶114

In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of personal movable and immovable assets of the LRs of defendant no.2 namely Shri Sameer Jain and Shri Vineet Jain.

¶115

Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

¶116

The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the parties.

¶117

Pafties are directed to appear before the Ld. Recovery Officer, DRT-II, Delhi on 29.09.2026. Pending IAs, if any, stand disposed of.

¶118

File be consigned to records.

¶119

.-,.. !9A (susHr L KIJM-AR np,frbcil PRESIDING OFFICER DRT-II, Delhi

¶120

Date:29.07.2026

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TANO. 1273 of 2022^' 24 This judgement has been signed, dated and^pronounced in open court.

¶123

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Date i 29.07.2026

¶125

(susHrL KUMAR RASTOG) PRESIDING OFFICER DRT-II, Delhi

¶126

Ifci Ltd. v. Rohtas Industries Ltd.

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Ifci Ltd. v. Rohtas Industries Ltd.

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