2019 (12) TMI 1568 - HC - Insolvency and Bankruptcy

Seeking direction to Respondent No.3 to remove the seal release the said property of the Petitioner No.2 including the Godown - seeking to refrain from illegally obstructing the activities of the said factory without any justified cause and/or reason - HELD THAT - Shri Sureshkumar learned Counsel for respondent No.3 submitted that petitioner No.2 owes provident fund dues to the tune of ₹ 23 crores approximately. He submits that respondent No.3 proposes to either file Review Petition before NCLT or challenge the order dated 11/11/2019 before the Appellate Tribunal. Respondent No.3 is at liberty to take appropriate action. As on today they have to comply with the order of NCLT. As far as provident fund dues are concerned and in as much as said order is passed by NCLT, dues are arrived at on the basis of respondent No.3 s representation. Respondent No.3 is directed to remove the seal by tomorrow affixed on the property of the petitioner No.1 taken over by petitioner No.2 - Petitioner No.1 shall deposit with respondent No.2 an amount of ₹ 40,77,899/- within a week from today - Balance amount of ₹ 4 Crores as per NCLT order dated 11/11/2019 shall be deposited by the petitioner with respondent No.3 on or before 10/02/2020. Petition allowed.

Summary

Issues:
1. Petition for mandamus and direction to remove seal and release property.
2. Default in loan repayment and initiation of insolvency proceedings.
3. Dispute over provident fund dues and compliance with NCLT order.

Analysis:
1. The petitioner sought a writ of mandamus to direct the removal of a seal on their property and refrain from obstructing factory activities without cause. The court noted the default in loan repayment by Petitioner No.2 to a bank, leading to insolvency proceedings initiated by the bank. The National Company Law Tribunal (NCLT) admitted the petition and appointed a Resolution Professional. Petitioner No.1 acquired the factory of Petitioner No.2 under these proceedings, with a specified deposit amount.

2. The main issue revolved around provident fund dues, with NCLT determining an amount owed by Petitioner No.1. The petitioners expressed readiness to deposit the dues as per NCLT's directions. Despite an agreement for de-sealing the property, respondent No.3 did not cooperate. Petitioner No.1 committed to depositing the dues within the specified timeline, while respondent No.3 contemplated legal action but had to comply with NCLT's order. The court granted time for filing a reply affidavit and deferred the hearing.

3. The court issued interim orders directing the removal of the seal on the property, specifying deposit amounts, and keeping open the contention regarding the larger amount claimed by respondent No.3. The case highlighted the importance of complying with NCLT orders, readiness to deposit dues, and the need for cooperation between parties involved in insolvency proceedings. The judgment balanced the interests of both parties while ensuring compliance with legal obligations and maintaining the integrity of the insolvency resolution process.