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TMI Blog2010 (1) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... irect an advertisement to be issued for change of management with the direction to the BIFR to examine the proposal of the existing management for infusion of funds through a strategic investor taking into consideration the interest of all the stakeholders and calling upon the stakeholders to take a stand in this behalf. - WP (C) NO. 12599 OF 2009 AND CM NO. 13170 OF 2009 - - - Dated:- 20-1-2010 - SANJAY KISHAN KAUL AND MS. VEENA BIRBAL, JJ. Sandeep Sethi, Vivek Sibal, Ms. Pooja M. Saigal, Ms. Maneesha Dhir, Ms. Jayshree Shukla, Ms. Preeti Dalal, Rahul Sharma, Arvind Nayar, Sanjay Abbot, Vineet Nayar, Ms. Altaf Fathima, Atul Nanda and Gaurav Gupta for the Appearing Parties. JUDGMENT Sanjay Kishan Kaul, J. - Rule DB. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by respondent No. 2. There was some difference of view as to the amount of funds infused by respondent No. 2 whether it was 3.07 crore or 2.97 crore. In the proceedings of the BIFR held on 26-7-2007, it was specifically recorded that respondent No. 2 would not be entitled to any special privileges or rights or claims whatsoever in nature on the assets of RTL or in the management till the sanctioned scheme is brought into effect. In the subsequent proceedings held on 25-10-2007, IDBI has confirmed that respondent No. 2 had not fulfilled the terms of the bid on account of their failure to deposit the remaining amount by the stipulated date of 16-8-2007 and that IDBI had not given any further extension of time for making balance payment. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner and change of management would not be required in the case. The operating agency IDBI submitted that RML had settled the dues of secured creditors as per terms and conditions of OTS Act along with interest and the entire amount had been paid. The company had also agreed to refund the amount to respondent No. 2, but respondent No. 2 was refusing to take the amount. Not only that, representative of SBI submitted that all dues had been settled and the entire amount paid and the stands of Karnataka Bank Limited and ISCI were also to the same effect. The AAIFR, however, by the impugned order dated 18-9-2009 dismissed the appeal. The order of the AAIFR is based on a premise that the proposal before the BIFR furnished by RTL was for intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A bare reading of the proposal submitted by the strategic investor would show that the proposal did not envisage a participation in the management of the strategic investor or transfer of shares. The funds were being infused against security of assets. The funds were to be utilized to clear all liabilities. 11. The relevant portion of the proposal for revival of the company by the existing management specified the role of the strategic investor as under : "G. Promoter Mr. S. Ramachandra Strategic Partner/Co-Promoters Vizag Profiles Limited : ( a )Strategic partner/Co-promotors to this Scheme Vizag Profiles Limited to induct and bring in Rs. 12 crores (Rupees twelve crores only) as fresh investment into the company by way of secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for a change of management. However, that arrangement did not result in satisfactory result and the consequence was that respondent No. 2 wanted to walk out of the deal there being trouble between respondent No. 2 and the existing management. Respondent No. 2, in fact, even accepted the order of 24-10-2008 of the BIFR declaring the earlier arrangement as null and void and directing payment to respondent No. 2 of the funds brought in with interest. This was, in fact, as per the request made by respondent No. 2 earlier and thus interest of respondent No. 2 was fully taken care of. 14. We may notice that the order in Arrow Syntex (P.) Ltd.'s case ( supra ) is based on its own facts. In the given facts of the case a change of manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent they direct an advertisement to be issued for change of management with the direction to the BIFR to examine the proposal of the existing management for infusion of funds through a strategic investor taking into consideration the interest of all the stakeholders and calling upon the stakeholders to take a stand in this behalf. 19. Needless to say that respondent No. 2 is not a stakeholder and is only entitled to the return of the amount with interest as directed vide order dated 24-10-2008 of the BIFR. 20. At this stage learned counsel for respondent No. 2 states that during the course of hearing he could not inadvertently point out that before AAIFR one of the creditors, Karnataka Bank, had taken a stand against th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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