9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 2004 - HC - Indian LawsRevival of sick industry - providing corpus fund - benefit of rehabilitation under the Bihar State Micro and Small Enterprises Rehabilitation Act, 2008 - contention of appellant is that once the proceedings under the SARFAESI Act was initiated and pending, the Writ Court could not exercise its jurisdiction under Article 226 of the Constitution - HELD THAT - Once the proceedings under the SARFAESI Act were pending, the learned Writ Court has no jurisdiction to interfere into the matter so far as it pertains to the right of International Asset Reconstruction Co. Pvt. Ltd. (IARC) is concerned. The learned Writ Court in the facts and circumstances should not have interfered into the matter and issue the mandamus as done, instead, the appellant International Asset Reconstruction Co. Pvt. Ltd. (IARC) should have been granted liberty to proceed with the proceedings initiated by them under the SARFAESI Act and as the decision of the Apex Committee with regard to direction to the Canara Bank was taken behind their back for the purpose of considering rehabilitation package, the matter should have been remitted back to the Apex Level Committee to reconsider the matter instead directing to implement a decision which was not taken in accordance to the requirement of law, i.e. with the consent of all concerned, and even without taking note of various objections, including the objection of Canara Bank based on TEV report dated 30.05.2015, and various other issues involved in the matter. Appeal allowed.
Issues Involved:
1. Tenability of the Writ Court's order directing the State Government to provide a corpus fund and rehabilitation benefits under the Bihar State Micro and Small Enterprises Rehabilitation Act, 2008. 2. Legitimacy of restraining International Asset Reconstruction Co. Pvt. Ltd. (IARC) from recovery under the SARFAESI Act. 3. Binding nature of the Apex Committee's decision on Canara Bank and IARC. 4. Jurisdiction of the Writ Court under Article 226 of the Constitution concerning ongoing SARFAESI Act proceedings. Issue-wise Detailed Analysis: 1. Tenability of the Writ Court's Order: The Writ Court directed the State Government to provide relief by way of a corpus fund and rehabilitation benefits to M/s Eclat Industries Limited under the Industrial Incentive Policy, 2011. The Writ Court's decision was based on the Apex Committee's decision dated 28.10.2014, which mandated the creation of a corpus fund and the provision of financial assistance. However, the appellants, IARC and Canara Bank, contended that this decision was not binding on them. The Court noted that the Writ Court issued the mandamus assuming the Apex Committee's decision was binding on all concerned under Section 5(4) of the Act of 2008, without considering the objections raised by IARC and Canara Bank. 2. Legitimacy of Restraining IARC from Recovery: IARC had initiated proceedings under the SARFAESI Act for the recovery of debts from M/s Eclat Industries Limited. The Writ Court's order restrained IARC from proceeding with these actions, which IARC argued was beyond the Writ Court's jurisdiction. The Court found that the Writ Court should not have interfered with the SARFAESI Act proceedings, as these were pending before a competent statutory authority. The Court emphasized that the Writ Court's interference frustrated IARC's statutory rights under the SARFAESI Act. 3. Binding Nature of the Apex Committee's Decision: The Apex Committee's decision, taken on 28.10.2014, directed Canara Bank to provide a term loan and working capital loan to M/s Eclat Industries Limited. Canara Bank argued that this decision was made in their absence and without their consent, thus not binding. The Court observed that Canara Bank had objected to the decision immediately after it was made and had conducted a Techno Economic Viability Study, which assessed the project's cost differently. The Court agreed that the decision could not be enforced on Canara Bank without their approval and participation. 4. Jurisdiction of the Writ Court: The appellants contended that the Writ Court lacked jurisdiction under Article 226 of the Constitution to interfere with ongoing SARFAESI Act proceedings. The Court concurred, stating that the Writ Court should not have issued a mandamus affecting IARC's rights under the SARFAESI Act. The Court highlighted that the Writ Court did not consider whether the local Act (Act of 2008) could supersede the provisions of the Central Act (SARFAESI Act) during pending proceedings. Conclusion: The appeals were allowed, and the Writ Court's order was quashed. The Court directed that IARC could proceed with the SARFAESI Act proceedings, and the matter concerning Canara Bank was remanded back to the Apex Committee for reconsideration. The Apex Committee was instructed to hear all concerned parties, including Canara Bank and IARC, and proceed according to law.
|
