2018 (1) TMI 1322 - HC - Indian Laws

Restrain from re-structuring debt/share capital - Held that - as part of the re-structuring drive, the SBI/consortium of bankers may require certain assets of the company to be sold by the respondent for purpose of re-structuring of the debt that is owed to the consortium. In the eventuality, that such a step is required to be taken, the respondent is free to move an application before this court seeking modification of the present order.

Summary

Issues:
1. Petition under Section 9 of the Arbitration and Conciliation Act seeking unpaid dues.
2. Contention regarding the payable sum of &8377; 800 crores.
3. Refutation of claim by the respondent.
4. Restraining the respondent from re-structuring debt/share capital.
5. Assets of the respondent charged to a consortium of bankers.
6. Interim orders to secure the petitioner.
7. Filing of an affidavit listing moveable and immoveable assets by the respondent.
8. Restraining the respondent from disposing of assets or creating third-party interests.
9. SBI's statement regarding restructuring drive and sale of assets.
10. Directions given in a connected matter affecting the present petition.

Analysis:

1. The petitioner filed a petition under Section 9 of the Arbitration and Conciliation Act to secure unpaid dues from the respondent. The petitioner claimed that around &8377; 800 crores were payable by the respondent based on a settlement agreement and a Business Transfer Agreement between the parties.

2. The respondent, through their senior counsel, refuted the petitioner's claim, contesting the figures presented by the petitioner regarding the amount owed.

3. SBI, represented by senior counsel Mr. Akhil Sibal, mentioned that the respondent was restrained from re-structuring their debt/share capital as their assets were charged to a consortium of bankers, including SBI as the lead bank, with dues amounting to nearly &8377; 17,000 crores. SBI emphasized their right to take steps against the assets of the respondent as per RBI guidelines.

4. Considering the financial condition of the petitioner, the court deemed it necessary to pass interim orders to secure the petitioner's interests. The respondent was directed to file an affidavit listing all moveable and immoveable assets within a week, and they were restrained from disposing of assets or creating third-party interests.

5. SBI indicated that in the restructuring drive, certain assets of the respondent might need to be sold for debt restructuring purposes. The respondent was permitted to seek modification of the order if such a step was required, with SBI reserving the right to exercise their legal rights.

6. In a related matter, certain directions had already been issued to the respondents, and it was deemed unnecessary to pass further directions in the present petition. However, the interim order was to remain in effect, and the respondents were directed to file a reply before the next hearing date.