9911796707
TMI Blog2015 (3) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ssues, if at all raised by either side shall be decided by the learned Company Judge along with final hearing of the Company Petition. - Appeals are partly allowed. - O.J.APPEAL NO. 156 of 2007 In COMPANY APPLICATION NO. 489 of 2006 In OFFICIAL LIQUDATOR REPORT NO. 88 of 2006 In COMPANY PETITION NO. 190 of 2003 With CIVIL APPLICATION (OJ) NO. 260 of 2007 In O.J.APPEAL NO. 156 of 2007 With 157 of 2007 - - - Dated:- 30-9-2014 - MR. KS JHAVERI AND MR. A.G.URAIZEE, JJ. O.J.APPEAL NO. 156 of 2007 In COMPANY APPLICATION NO. 489 of 2006 In OFFICIAL LIQUDATOR REPORT NO. 88 of 2006 In COMPANY PETITION NO. 190 of 2003 With CIVIL APPLICATION (OJ) NO. 260 of 2007 In O.J.APPEAL NO. 156 of 2007 With O.J.APPEAL NO. 157 of 2007 In COMPANY APPLICATION NO. 539 of 2006 TO O.J.APPEAL NO. 164 of 2007 In CIVIL APPLICATION (OJ) NO. 165 of 2005 With O.J.APPEAL NO. 167 of 2007 In CIVIL APPLICATION (OJ) NO. 226 of 2006 TO O.J.APPEAL NO. 190 of 2007 In MISC. CIVIL APPLICATION (OJ) NO. 213 of 2006 With O.J.APPEAL NO. 195 of 2007 In COMPANY APPLICATION NO. 141 of 2007 With CIVIL APPLICATION (OJ) NO. 261 of 2007 In O.J.APPEAL NO. 157 of 2007 With CIVIL APPLICATION (OJ) NO. 262 of 2007 TO CIVIL APPLICATI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set out as under: KOTAK MAHINDRA BANK LIMITED Sr. No. Sr. No. as per the Cause list of 30.9.2014 Matter Prayer made in the Company Application Date of Sub. order of in DRT Date of Decree passed in DRT 1. 47 OJA/156/2007 in COMA/489/2006 With OJCA/260/2007 Kotak Mahindra Bank Ltd. vs. OL of M/s. APS Star Industries Limited ors. Limited; A) That this Hon ble Court may be pleased to allow the name of the applicant to be substituted in place of ICICI Bank - - 2. 50 OJA/159/2007 in COMA No. 291 of 2006 With OJCA/263/2007 Kotak Mahindra Bank vs. State Bank of India ors. (OL of Orient Chemicals Limited) A) That this Hon ble Court may be pleased to allow the name of the applicant to be substituted in place of the State Bank of India; 16.1.2007 - 3. 51 OJA/160/2007 in COMA No. 491 of 2006 With OJA/264/2007 Kotak Mahindra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Applicant in the interest of justice; - - 9. 57 OJA/168/2007 in OJCA No. 163 of 2005 With OJCA/270/2007 Kotak Mahindra Bank vs. TLA ors. (Aryodaya Ginnning Mfg. Co. Limited) B) Your Lordships be pleased to substitute opponent no. 4 with the Applicant in the interest of justice; - - 10. 58 OJA/169/2007 in COMA 23 of 2007 With OJCA/271/2007 Kotak Mahindra Bank vs. OL of Aryodaya Ginnning Mfg. Co. Limited ors. A) That this Hon ble Court may be pleased to permit the applicant to be substituted for and in place of the ICICI Bank Limited as the secured creditor of the Company in Liquidation; 11. 59 OJA/170/2007 in OJCA No. 227 of 2006 With OJCA/272/2007 Kotak Mahindra Bank vs. TLA ors. (New Gujarat Synthetics Limited) B) Your Lordships be pleased to substitute opponent no. 5 with the Applicant in the interest of justice; 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.1.2007 17 64 OJA/175/2007 in COMA/542/2006 With OJCA/277/2007 Standard Chartered Bank vs. OL of A bad Mfg. Calico Prtg. Co. Limited. (a) That this Hon ble Court may be pleased to permit the applicant to be substitute its name in place of ICICI Bank Limited in Company Application No. 274 of 2005 in Company Petition No. 157 of 1995; 25.4.2006 31.1.2007 18 65 OJA/176/2007 in COMA 543 of 2006 With OJCA/278/2007 Standard Chartered Bank vs. OL of GIL Hospitals Limited (a) That this Hon ble Court may be pleased to permit the applicant to be substitute its name in place of ICICI Bank Limited in Official Liquidator s Report No. 66 of 2002 in Company Petition No. 152 of 1995; 12.3.2007 - 19 66 OJA/177/2007 in COMA 544 of 2006 With OJCA/279/2007 Standard Chartered Bank vs. OL of Amruta Mills Ltd. ors. (a) That this Hon ble Court may be pleased to permit the applicant to be substitute its name in place of ICICI B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A/285/2007 Standard Chartered Bank vs. OL of Ambica Mills Ltd. ors. (a) That this Hon ble Court may be pleased to permit the applicant to be substitute its name in place of ICICI Bank Limited in Company Application No. 220 of 2002 in Company Petition No. 66 of 1988; 11.8.2006 30.1.2009 26 73 OJA/184/2007 in COMA 551 of 2006 With OJCA/286/2007 Standard Chartered Bank vs. OL of Ambica Mills Ltd. ors. (a) That this Hon ble Court may be pleased to permit the applicant to be substitute its name in place of ICICI Bank Limited in Company Application No. 224 of 2002 in Company Petition No. 66 of 1988; 11.8.2006 30.1.2009 27 74 OJA/185/2007 in COMA 552/2006 With OJCA/287/2007 Standard Chartered Bank vs. OL of Vallabh Glass Works Limited ors. (a) That this Hon ble Court may be pleased to permit the applicant to be substitute its name in place of ICICI Bank Limited in Company Application No. 248 of 2006 in Company Petition No. 157 of 2000; 26.6.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant to be substitute its name in place of ICICI Bank Limited in Company Application No. 72 of 2007 in Company Petition No. 152 of 1995; 3. The case of the appellants as pleaded before the learned Company Judge is set out as under: 3.1 ICICI Bank Limited had entered into a Deed of Assignment with the applicants on 31.03.2006, pursuant to which, ICICI Bank Limited assigned all its rights, title, interests and benefit in respect of the debt due from APS Star Industries LTD (hereinafter referred to as the Company ) along with the underlying securities in favour of the applicants who had agreed to take over the claim against the company. Pursuant to the said Deed, ICICI Bank Limited confirmed that the applicants shall be entitled to initiate/adopt appropriate legal action and/or continue to pursue any existing legal action in its own name against the defendants for recovery of the dues under the said facilities. 3.2 It is the case of the applicants that apropos the assignment agreement, the applicants had become lender and all the rights of ICICI Bank Limited in relation to the loan and the underlying security interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These guidelines would be applicable to banks, FIs and NBFCs purchasing/ selling non performing financial assets, from/ to other banks/FIs/NBFCs (excluding securitisation companies/ reconstruction companies). 2. A financial asset, including assets under multiple/consortium banking arrangements, would be eligible for purchase/sale in terms of these guidelines if it is a non-performing asset/non performing investment in the books of the selling bank. 3. The reference to `bank' in the guidelines would include financial institutions and NBFCs. The above analysis of the various provisions of the 1949 Act shows that RBI is empowered to regulate the business of the banking companies. That, RBI is empowered to control management of banking companies in certain situations. It is empowered to lay down conditions on which the banking companies will operate. It is empowered to regulate paidup capital, reserve fund, cash fund and above all to lay down policies in the matter of advances to be made by the banking companies, allocation of resources etc. While laying down such policies under the said Act, RBI can lay down parameters enabling banking companies to expand its business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing banks inter se to deal in NPAs in order to clean the balance sheets of the banks which guideline/policy falls under Section 6(1)(a) r/w Section 6(1)(n). Therefore, it cannot be said that assignment of debts/NPAs is not an activity permissible under the BR Act, 1949. Thus, accepting deposits and lending by itself is not enough to constitute the business of banking . The dependence of commerce on banking is so great that in modern money economy the cessation even for a day of the banking activities would completely paralyse the economic life of the nation. Thus, the BR Act, 1949 mandates a statutory comprehensive and formal structure of banking regulation and supervision in India. 39. The test to be applied is - whether trading in NPAs has the characteristics of a bona fide banking business. That test is satisfied in this case. The guidelines issued by RBI dated 13.7.2005 itself authorizes banks to deal inter se in NPAs. These guidelines have been issued by the Regulator in exercise of the powers conferred by Sections 21 and 35A of the Act. They have a statutory force of law. They have allowed banks to engage in trading in NPAs with the purpose of cleaning the balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets inter se. Even in the matter of assigning debts, it cannot be said that the banks are trading in debts, as held by the High Court(s). The assignor bank has never purchased the debt(s). It has advanced loans against security as part of its banking business. The account of a client in the books of the bank becomes Non Performing Asset when the client fails to repay. In assigning the debts with underlying security, the bank is only transferring its asset and is not acquiring any rights of its client(s). The bank transfers its asset for a particular agreed price and is no longer entitled to recover anything from the borrower(s). The moment ICICI Bank Ltd. transfers the debt with underlying security, the borrower(s) ceases to be the borrower(s) of the ICICI Bank Ltd. and becomes the borrower(s) of Kotak Mahindra Bank Ltd. (assignee). Emphasis Supplied 4.1 In light of the above observations made by the Apex Court, Mr. Mihir Joshi, learned Senior Counsel submitted that the issue regarding substitution has already been concluded by the Apex Court. Mr. Ashok Shah, learned Senior Counsel has tried to contest this contention by submitting that the issue of substitution is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f not getting the deeds of assignment duly registered would follow. (ii) Whether the respective deeds of assignment are duly stamped under the applicable provisions of law? If not, necessary consequences of a document not being duly stamped would follow. (iii) Whether where the assignee is not a securitization company or reconstruction company, the assignee would be entitled to initiate action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002? (iv) Whether when a company is in liquidation, on assignment of NPA by a secured creditor, the assignee claiming before the official liquidator on the basis of the full claim of the assignor would violate provisions of Section 529A of the Companies Act, 1956 and therefore if such assignment is bad in law? 6. Having heard learned Senior Advocates for the parties and having gone through the entire records of the case, we are of the opinion that the issue of substitution has already been considered and concluded by the Apex Court as observed in the foregoing paragraphs. Therefore, so far as the other issues which are kept open by the Apex Court and for which the matters are ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
