Allowed

M/s International Asset Reconstruction Co. Pvt. Ltd., v. Republic Forge Company Limited (In Liqn)

Telangana HC13 Nov 2014COMPA/893/2014

Case brief

AI extract

What is this about?

The applicant, a securitisation company, sought to substitute itself as the secured creditor in pending winding up proceedings following a chain of debt assignments. Ruling that the assignment was valid and consent was obtained, the court allowed the substitution, noting the applicant was not required to implead the transferor bank.

What did the court decide?

Application for permission to come on record by substituting the applicant as the secured creditor is allowed.

M/s International Asset Reconstruction Co. Pvt… — Company and Corporate | Telangana HC (2014)

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HON’BLE SRI JUSTICE A. RAJASHEKER REDDY COMPANY APPLICATION NO.893 of 2014 IN

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R.C.C.No. 5 OF 1997

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ORDER:

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This application is filed by the applicant seeking permission to come on record by substituting and/or representing ICICI Bank Ltd/Standard Chartered Bank as the secured creditor of the respondent.

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In the affidavit filed in support of this application, it is stated that the applicant is a company incorporated under the provisions of the Companies Act, 1956 and registered as an Asset Reconstruction and Securitisation Company under the provisions of the Securitisation and Reconstruction of Assets and Enforcement of Security Interest Act, 2002 (herein after referred as SARFAESI Act, 2002).

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This Court vide order dated 29.04.1998 ordered to wind up the respondent-company i.e., Republic Forge Company Limited represented by its Official Liquidator. It is also stated that ICICI Bank Ltd.(original lender) by virtue of a Deed of Assignment dated 18.02.2006 assigned its debt in favour of Standard Chartered Bank and the Standard Chartered Bank inturn assigned the debt in favour of applicant by Assignment Deed dated 31.07.2012. By virtue of the said Deed of Assignment, the applicant shall be entitled, to intiate-adopt appropriate legal action and or continue to pursue any existing legal action in its own name against the respondent for recovery of the dues under the loan agreements. Subsequently, registration of assignment agreement dated 31.07.2012 is registered vide Document No.1418 of 2014 dated 29.05.2014. The Standard Chartered Bank also issued a No Objection Letter dated 09.10.2013 giving its consent to the applicant for being substituted in its place in the pending proceedings. It is further submitted that petitioner shall be deemed to full and absolute legal owner and entitled to financial assets and to recover and receive all amounts due from the borrower and the guarantors including the right to file suit or institute such other recovery proceedings

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and to exercise all other rights of the respective banks-financial institutions in relation thereto

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The sub-section (5) of Section 5 of the Sarfaesi Act, 2002, provides for substitution of the name of the Securitization Company or Reconstruction Company in pending suits, appeals or other proceedings with the consent of the originator. The said sub-section (5) of Section 5 of Sarfaesi Act, 2002 reads as follows”

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“(5) an acquisition of financial assets under sub-section (1), the securitisation Company or reconstruction company, may with the consent of the originator, file an application before the Devts Recovery Tribunal or the Appellate Tribunal or any court or other authority for the purpose of the substitution of its name in any pending suit, appeal or other proceedings and onreceipt of such application, such Debts Recovery Tribunal or Appellate Tribunal or Court or Authority shall pass orders for the substitution of the securitization company or reconstruction company in such pending suit, appeal or other proceedings.”

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Heard learned counsel for the applicant and the learned counsel for Official Liquidator.

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The Official Liquidator submitted his report stating that the applicant has failed to make Standard Chartered Bank as party though Standard Chartered Bank is impleaded by filing Company Application No.1132 of 2014 by order dated 13.11.2014.

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Though notice was issued to Standard Chartered Bank, there is no appearance for Standard Chartered Bank.

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In view of the averments stated in the affidavit and in view of the report filed by the Official Liquidator, this application is allowed.

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A. RAJASHEKER REDDY, J

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Date: 13.11.2014 dv

M/s International Asset Reconstruction Co. Pvt. Ltd., v. Republic Forge Company Limited (In Liqn)

Case brief

What is this about?

What did the court decide?

M/s International Asset Reconstruction Co. Pvt. Ltd., v. Republic Forge Company Limited (In Liqn)

Case brief

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What did the court decide?

What the court decided

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