2013 (4) TMI 566 - HC - Companies Law

Recovery of outstanding dues - It is claimed that credit facility was duly granted, however the loanee failed and neglected to make payment of the outstanding dues of Rs.2,234,296,346.43 which comprised of the invoked Letter of Credit amount of Rs.2,200,271,866.33 and outstanding SBLC commission of Rs.34,024,480.10. - Held that - when the application for interim relief was made there was no document to show that the appellant was the mortgagee nor it was a lender to any company for which any security has been furnished. However, on granting leave this appellant filed supplementary affidavit annexing certain documents. It appears from these documents that the appellant is not mortgagee and rather one M/s. 3i Infotech Trusteeship Services Limited is mortgagee and one M/s. Bhartiya Hotel is the mortgagor. we think that the direction given by the learned Trial Judge at the instance of the appellant cannot be deleted. we do not find any reason to grant any relief on this appeal.

Summary

Issues:
Enforcement of security by a banking company against mortgaged properties; Validity and legality of mortgage property; Jurisdiction of Company Court to examine legality and validity of transactions before final winding up order.

Analysis:
The appeal before the Calcutta High Court involved the enforcement of security by a banking company against two mortgaged properties due to non-payment of outstanding dues by the borrower and corporate guarantor. The appellant contended that the Trial Judge's observation and direction affected its rights as a mortgagee. The appellant argued that the Trial Judge's decision, without hearing them, declared the mortgage invalid and illegal, affecting their ability to recover dues. The appellant emphasized that the Company Court lacked jurisdiction to examine the legality and validity of transactions before a final winding-up order was passed.

Regarding the legality of the mortgage property, the respondent argued that the sale and transfer of company properties were void ab initio, questioning the appellant's locus standi to file the appeal. The respondent claimed that the appellant was not the mortgagee of the properties in question and failed to disclose relevant title deeds. The respondent asserted that the appellant should have raised the issue before the Trial Judge and that the sale of properties rendered the appellant's grievance baseless.

Upon analyzing the documents submitted, the Court found that the appellant was not the mortgagee of the properties; instead, another entity held the mortgage. The recorded mortgagee acted as a security trustee for ICICI Bank Limited, raising questions about the appellant's aggrievement. The Court clarified that the Trial Judge's observations and directions, made without hearing affected parties, would not be binding at that stage due to lack of jurisdiction. The Court emphasized that prior notice should be given to the Special Officer before enforcing the alleged mortgages, allowing interested parties to approach the Company Judge for appropriate legal measures.

In conclusion, the Court disposed of the appeal without granting relief, allowing the appellant to take legal steps in accordance with the law. The Court highlighted the need to notify the Special Officer before taking action on the transferred properties. The judgment emphasized the importance of due process and proper jurisdiction in matters concerning the enforcement of mortgages and property rights.