Partly allowed

M/S. Derby Textiles Ltd. v. Appe. Authority for I.F.R. and Ors.

Rajasthan HC28 Nov 2018CW/2955/2014

Case brief

AI extract

What is this about?

The High Court set aside orders by BIFR and AAIFR that abated the petitioner's reference under SICA due to SARFAESI Act proceedings. The petitioner was allowed to avail benefits under the SICA Repeal Act, 2003 within 180 days.

What did the court decide?

Quashed orders of BIFR and AAIFR; petitioner entitled to benefit under SICA Repeal Act within 180 days.

M/S. Derby Textiles Ltd. Vs Appe. Authority for… — Company and Corporate | Rajasthan HC (2018)

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IN THE HIGH COURT OF JUDICATURE FOR

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RAJASTHAN AT JODHPUR

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S.B. CIVIL WRIT PETITION NO. 2955 / 2014

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Derby Textiles Ltd. through Sh. Dalpat Singh Khichi s/o. Sh. Jalam Singh Khichi, aged about 60 years, working as Factory Manager, r/o. – Marudhar Industrial Area, Basni – Phase II, Jodhpur (Raj.) – 342 005.

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….Petitioner

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VERSUS

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Appellate Authority for Industrial and Financial Reconstruction, 10^th Floor, Jeevan Prakash, 25 Kasturba Gandhi Marg, New Delhi.

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Board for Industrial & Financial Reconstruction, Jawahar Vyapar Bhawan No.1, Tolstoy Marg, New Delhi – 110 001.

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The Managing Director, Bank of Baroda, Sojati Gate, Jodhpur.

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The Managing Director, Punjab National Bank, Chopasani Road, Jodhpur.

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The Chairman & Managing Director, UTI Bank Ltd., Universal Insurance Building, Sri P.M. Road, Fort, Mumbai.

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The Managing Director, IDBI, IDBI Tower, CUFFE PARADE, Mumbai.

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The Managing Director, IFCI, IFCI Tower, 61 Nehru Place, New Delhi.

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The Managing Director, ICICI, ICICI Tower, Bandra Kurla Complex, Mumbai.

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The Managing Director, IIBI, 19, Netaji Subhash Road, Kolkata.

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The DGM, IDBI Bank Ltd., BIFR Cell Videocon Tower, 1^st Floor, Jhandewalan Extt. New Delhi – 110 055. 11. The Dy. General Manager, Bank of Baroda, Regional Office, Bank of Baroda Building, 4^th Floor, Parliament Street, New Delhi – 110 001.

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The Regional Manager, IFCI Ltd., Delhi Regional Office, Scope Complex, CPORE – V, 4^th Floor, 7 – Lodhi Road, New Delhi – 110 003. 13. The CMD, AXIS Bank Ltd., Statesman House, K.G. Marg, New Delhi – 110 001.

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The Chairman & Managing Director, Punjab National Bank, PNB House, Bhikaji Cama Place, New Delhi – 110 066.

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DTE. of Income Tax (R), Mayur Bhawan, Department of Revenue, 6^th Floor, Connaught Place, New Delhi – 110 001.

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EPFO, HUDCO VISHALA, 14, Bhavishyanidhi Bhawan, Bhikaji Cama Place, New Delhi – 110 066. 17. The Assistant Director, ESIC, Regional Office, Rajendra Bhawan, Rajindra Place, New Delhi – 110 008. 18. The Secretary, Deptt. of Industries, Govt. of Rajasthan, Jaipur. 19. The AGM, ICICI Bank, NBCC Tower, Lodhi Road, New Delhi.

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Kotak Mahindra Bank Ltd., D-10, No. 1 & 2, Local Shopping Complex, D Block, Vasant Vihar, New Delhi – 110 057.

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PHOENIX ARC Pvt. Ltd., 7^th Floor, Dani Corporate Park, 158 CST Road, Kalian, Santacruz (E), Mumbai – 400 098.

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Asset Care and Reconstruction Enterprise Ltd. through Associate Vice President, ICFI Tower, 61 Nehru Place, New Delhi – 110 019.

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_______________________________________________ For Petitioner(s) : Mr. Vinay Kothari. For Respondent(s): Mr. Manish Shishodia. Mr. Rajendra Salecha. Mr. Jagdish Vyas. Mr. R.S. Bhati. Mr. Manoj Bhandari. Mr. Vikas Balia. Mr. N.S. Rajpurohit.

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HON'BLE MR. JUSTICE ARUN BHANSALI

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Order

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28/11/2018

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This writ petition has been filed by the petitionerCompany aggrieved against the orders dated 14.08.2013 (Annex.-2) passed by the Board for Industrial and Financial Reconstruction (‘BIFR’) and dated 13.12.2013 (Annex.-3) passed by the Appellate Authority for Industrial and Financial Reconstruction (‘AAIFR’) and a prayer has been made that the reference filed by the petitioner-Company be restored with BIFR for hearing.

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The BIFR by its order dated 14.08.2013 (Annex.-2), on account of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’), action initiated by Kotak Mahindra Bank Ltd. (‘KMBL’) on the Secured Assets of the Company abated the reference on account of third Proviso to SubSection (1) of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (‘SICA’). In the appeal filed by the petitioner-Company, the AAIFR declined to entertain the appeal and dismissed the same, however, it was left open to the petitioner-Company to take other judicial proceedings before any other forum in accordance with law. Further observations were made that the order of dismissal was made having regard to order of status quo passed by this Court in SBCW No.11845/2013.

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The hearing in the present case was concluded alongwith SBCW No.11845/2013 among the same parties, wherein judgment has been rendered today, wherein setting aside the orders passed by the BIFR and the AAIFR, it has been directed as under:-

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“In view thereof, as orders dated 13.06.2011 (Annex.-2) and dated 27.02.2013 (Annex.-3) passed by the BIFR and AAIFR, cannot be sustained and proceedings initiated/pending under the SARFAESI Act being not a bar for reference under the provisions of IBC, 2016, the petitioner-Company is apparently entitled to the relief, which the petitioner-Company would have been entitled under the proviso to Sub-Section (b) of Section 4 of the SICA

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Repeal Act, 2003.

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The effect of the order passed by the DRAT dated 18.11.2014 permitting the continuation of symbolic possession of the property with KMBL and the pending appeal of the petitionerCompany against the initiation of subsequent proceedings under the SARFAESI Act by KMBL would not be effected by passing of the present order and their effect, if any, shall be examined by the NCLT, in case proceedings are initiated by the petitioner-Company.”

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In view of the above, the present writ petition filed by the petitioner-Company, which pertains to the reference made by it based on its balance-sheet as on 31.03.2011, is also partly allowed. The order dated 14.08.2013 (Annex.-2) passed by the BIFR and order dated 13.12.2013 (Annex.-3) passed by the AAIFR are quashed and set aside. The petitioner-Company would be entitled to the benefit of proviso to Sub-Section (b) of Section 4 of the SICA Repeal Act, 2003 in accordance with law within 180 days from the date of this order, subject to the observations made hereinbefore.

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No order as to costs.

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(ARUN BHANSALI), J.

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PKS

M/S. Derby Textiles Ltd. v. Appe. Authority for I.F.R. and Ors.

Case brief

What is this about?

What did the court decide?

M/S. Derby Textiles Ltd. v. Appe. Authority for I.F.R. and Ors.

Case brief

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What did the court decide?

What the court decided

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