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TMI Blog2013 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... in its account, SPIL will instruct SBI to transmit by RTGS the amount deposited to the account of Canara Bank, Green Park Extn., New Delhi. The above order is subject further to Canara Bank filing an affidavit in this Court, within two weeks, stating that depending on the orders passed by the ITAT or any higher judicial fora and any further order passed by this Court, Canara Bank will refund the said amount or any part thereof together with whatever interest as may be directed by this Court. This order is without prejudice to the rights and contentions of SPIL as regards its liability as may be determined by ITAT or by any other judicial forum. For reporting compliance and further hearing, list these matters on 12th February 2013 at 2.15 pm. - CP 292 of 2004, CCP(Co) 31 of 2005, CCP(Co) 16 of 2007 & CCP(Co) 22 of 2007 - - - Dated:- 17-1-2013 - S. MURALIDHAR J. Petitioner Through: Ms. Chandni Goel, Advocate Respondent Through: Mr. H. Karthik Seshadiri, Advocate for K.C. Palanisamy, Cheran Holdings Pvt. Ltd. K.C. Palanisamy Associate Holdings Pvt. Ltd. Mr. Dhruv Wahi, Ms. Shalini Rawat, Mr. Ashish Singh, Mr. Brijesh Choudhary, Advocates for Cheran Ent. (P) Ltd. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V, Netherlands had incorporated a wholly owned subsidiary in the USA, Data Access America Inc. ( DAA ). DAA had, in turn, incorporated a wholly owned subsidiary in the U.K. by the name of Data Access Telecom Ltd. ( DATL ). 3. The Court passed a detailed judgment in CP No. 292 of 2004 on 18th November 2005 which, inter alia, dealt with CA No.537 of 2005 filed by CHPL under Sections 391 and 394 of the Act propounding a Scheme for restructuring of the debts of DAIL. The Scheme was opposed, inter alia, by the secured creditors including Canara Bank and IDFC. The Court noted that DAIL had admitted, in CA No.1 of 2005 that its debts were to an extent of Rs. 446.5 crores. This included the claim of the Income Tax Department ( IT Department ) to the extent of Rs. 18 crores, of which DAIL admitted Rs. 5 crores. DAIL also admitted to a debt of Rs. 90 crores owing to the secured creditors as against Rs. 120 crores claimed by them. In view of the strong opposition by the secured creditors to the said Scheme, the Court rejected CA No.537 of 2005. The Court expressed a prima facie view that DAIL was not in a position to meet its existing liabilities and that there are bleak chances of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given subject to certain conditions. It was stated that the sum of $ 17 million was transferred to CHPL as directed by Hamblin and since the conditions for the loan had not been fulfilled, Odyssey Re had a right to recall it. Therefore, Canara Bank had no right over the said money. There were also allegations made by CHPL and KCPH against Mr. Siddhartha Ray accusing him of siphoning off the funds of DAIL. 7. As far as CEPL was concerned, it sought to explain that it had remitted a sum of Rs. 35 crores to CHPL on 1st July 2004 for acquiring the equity in CHPL. However, due to the subsequent decision of the Board of Directors ( BoDs ) of CEPL it was decided not to purchase the said equity. Consequently CEPL asked for a refund of the said sum. CEPL accordingly filed CA No.287 of 2005 seeking vacation of the stay vis- -vis its account. Hamblin filed CA No.677 of 2005 seeking vacation of the said order by putting forth the same explanation that the amount of $ 17 million was by way of a loan from Odyssey Re to DAA. 8. The case of SPIL, which filed CA No.288 of 2005, again seeking the vacation of the order dated 17th December 2004, was that it had been originally a company held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount which has been transferred from ABN Amro Account No.1014374 of the company to CHPL and other companies shall be remitted back by those parties to the account of the company maintained with ABN Amro Bank. Needful in this respect shall be done within two weeks. After receiving this amount the ABN Amro Bank shall remit this amount to Canara bank. It is because of the admitted liability of the bank and charge of the bank over this money. Furthermore, in case it is found ultimately that the money is to be refunded to Odyssey Re etc., appropriate orders can be passed directing Canara Bank to refund the amount and the bank has sufficient means to carry out such directions. Appropriate orders shall be passed in the company petition as to how this amount is to be dealt with depending on the nature of the final orders passed in the company petition. 11. Against the judgment dated 18th November 2005, appeals were filed by CHPL, KCPH and SPIL. The Division Bench ( DB ) of this Court dismissed the appeals by judgment dated 20th November 2009. Before the DB SPIL questioned the direction issued to it. SPIL pointed out that KCPH had transferred Rs. 18.03 crores to Syndicate Bank and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligation on KCPH, CEPL, CHPL and SPIL to comply with the directions issued in the judgment dated 18th November 2005 and bring back the sum of Rs. 78.5 crores. On 22nd September 2006 the Court issued a further direction on the applications, CA Nos.1142 of 2006 and 1145 of 2006, filed by Mr. Siddhartha Ray that if Income Tax Authorities issue refund of Rs. 25 crores to M/s Sporting Pastime India Ltd., the same along with interest will be deposited in Canara Bank as per directions given in the order dated 18.11.2005. On 26th September 2006, another direction was issued in CA 1156 of 2006 filed by Mr. Siddharth Ray in relation to CHPL and CEPL directing that if the Income-Tax Department releases payment of Rs. 32,43,31,290/- to M/s CG Holdings Private Limited, the same after deposit will not be withdrawn and the said company will maintain the minimum balance of the amount received from the Income-Tax Department. The said order was, however, made subject to orders of the Madras High Court in the writ petitions by CEPL. 15. On 21st January 2011, a detailed judgment was passed by this Court in the applications filed by CEPL (CA 1459 of 2006 and 1061 of 2010), Canara Bank (CA 221 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order shall be withdrawn on deposit of Rs. 78,45,50,000/- with the Canara Bank in terms of the order dated 18th November, 2005. The said amount must be deposited immediately in terms of the said order and latest by or before 31st March, 2011. The attachment orders in respect of the bank accounts and fixed deposits or other deposits will not come in the way of depositing payments. In case deposit is not made by 31st March, 2011, the parties concerned will be liable to pay interest @ 15% per annum with effect from the date of passing of this order. The question of payment of interest for past period is for the time being left open. 18. Against the above judgment dated 21st January 2011, CEPL filed Company Appeal Nos. 16 and 17 of 2011 before the DB. An interim order was passed in the said appeals by the DB on 27th April 2011 noting the statement made on behalf of Canara Bank that no precipitative action would be taken by the bank in so far as the appellant is concerned. SPIL did not file an appeal. CEPL s appeals are pending consideration before the DB. In the meanwhile, an application has also been filed in the DB being CM No.19443 of 2011 purportedly by CEPL itself by Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled against the said order was dismissed by the DB as withdrawn on 9th May 2012. Consequently, the order dated 21st January 2011 became final as regards SPIL. 21. In CA 1142 and 1145 of 2006 filed by Mr. Siddhartha Ray, notice was directed to issue to the Addl. CIT, Coimbatore by this Court on 13th April 2012, requiring him to file a status report with regard to the amount attached in the account of SPIL. Thereafter, on 13th July 2012, a further order was passed noting the oral submission of learned counsel for the IT Department that Rs. 25 crores relating to SPIL was lying with the IT Department. The IT Department was then directed by the Court to deposit the aforesaid amount with the OL. 22. Subsequent to the above order, a further application, being CA No.1540 of 2012, was filed by Canara Bank seeking direction to the IT Department for deposit of the said sum together with interest. Notice was issued on the said application on 21st August 2012. 23. On 11th September 2012, the IT Department filed an affidavit dated 31st August 2012 of Mr. S. Tamil Selvam, ACIT, Coimbatore, which reads as under: 1. I state that I am in-charge and in control of M/s. Sporting Pastime Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Hon ble Madras High Court is still shown as pending. 8. That in any case, it is submitted that the Department is still ready and willing to comply with the order of this Hon ble Court but is handicapped by the proceedings that are taking place before Hon ble Madras High Court. The earlier order of injuncting the Income Tax Department to refund the amount only to M/s. Sporting Pastime India Limited is in vogue. Otherwise, the Department had no lien and is willing to deposit/pay the said amount according to the direction of this Hon ble Court. 24. On 4th January 2013, this Court directed that the main petition and the applications be set down for hearing on day-to-day basis from 15th January 2013 onwards. SPIL has filed an affidavit dated 11th January 2013, wherein, inter alia, it is mentioned that its movable assets constitute a fixed deposit with the SBI, Adayar Branch, Chennai in the sum of Rs. 11.60 crores. 25. This Court heard the matter on 15th, 16th and 17th January 2013. The Court heard the submissions of Mr. Y.P. Narula, learned Senior counsel appearing for Canara Bank, Mr. Anish Dayal on behalf of Mr. Siddhartha Ray, Mr. H. Karthik Seshadiri on behalf of CHP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one else. The IT Department has expressed its readiness to do so consistent with the orders of the Madras High Court, since, in any event, the order dated 9th May 2007 subsists. 29. As regards the sum of Rs. 7,59,70,489, it remains in the account No.10792703325 of SPIL with the SBI, Adayar Branch, Chennai by way of a fixed deposit ( FD ) the value of which, as on the date of the filing of affidavit dated 11th January 2013 by SPIL in this Court, is Rs. 11.60 crores. CA No.659 of 2008 was been filed by Canara Bank in this Court against SPIL and SBI, Chennai in relation to the aforementioned sum, in which notice was directed to issue by the Court on 24th July 2008 itself. 30. Therefore, as regards the sum of Rs. 7,59,70,489 which, at present, has grown, together with interest, to Rs. 11.60 crores this Court directs the SBI, Adayar Branch, Chennai to close the said FD and transfer the proceeds to account No.10792703325 of SPIL forthwith. SPIL will immediately thereafter ask SBI to transfer the said amount by RTGS to the account of Canara Bank, Green Park Extn. Branch, New Delhi forthwith. SBI is directed not to allow the said amount to be appropriated for any other reason by any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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