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TMI Blog2015 (10) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (O&M) - - - Dated:- 4-8-2015 - MR. JUSTICE HEMANT GUPTA AND MRS. JUSTICE LISA GILL For The Mr. V.K.Sachdeva, Advocate, for the petitioner. For The Mr. Sunil Kalra, Advocate, for the caveator-respondents. HEMANT GUPTA, J. Challenge in the present writ petition is to a public notice dated 14.07.2015 (Annexure P-1), whereby respondent No.1 IFCI Ltd., a financial institution, as defined under Section 2(m) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the Act ), invited bids for sale/assignment of debts/secured assets of the petitioner-company at a reserve price of ₹ 37.69 crores as against the reserve price of ₹ 110 crores fixed in e-auction notice dated 25.06.2015 (Annexure P-37) for sale of the mortgaged property. Challenge to the aforesaid notice arises out of the fact that with a view to finance its Hotel Project, the petitioner-company approached the Financial Institutions including respondent No.1- IFCI Ltd. and a term loan worth ₹ 815 lacs was sanctioned in the year 1991. The hotel became operational and came into business on 27.12.1999. The hotel, having 117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the period from April, 20113 to 26.02.2014. However, a sale notice claiming an amount of ₹ 105.65 crores due as on 13.08.2012 was issued by respondent No.1 on 28.02.2014 for sale of immovable and movable properties of the petitioner-company though the total outstanding as per the petitioner is ₹ 267.76 lacs. Respondent No.1 issued another sale notice dated 27.06.2014 (Annexure P-19). However, respondent No.3 Punjab National Bank challenged the said sale notice before the Debt Recovery Tribunal by filing a Securitization Application bearing No.363 of 2014 on 25.07.2014. In the said application, as per the petitioner, the respondent No.1 has not filed a detailed reply explaining highly and illegal exaggerated amount. Even though the matter was pending before the Debt Recovery Tribunal, but respondent No.1 again issued sale notice dated 12.12.2014 and also included the amount of respondent No.3 Punjab National Bank to the tune of ₹ 4.23 crores. The petitioner challenged such action by way of a writ petition i.e. CWP No.222 of 2015, which was dismissed on 08.01.2015 leaving the petitioner- company to avail the alternative remedy i.e. proceedings before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... realizing the secured asset, but the assignment of a debt is a separate right, which is governed by Section 5 of the Act. Therefore, the action of respondent No.1 to assign debt is mala fide, mischievous and to defeat the pending action initiated by the petitioner against the Bank before the Debt Recovery Tribunal. Vide notice dated 14.07.2015 (Annexure P-1), respondent No.1 - secured creditor has invited proposals from eligible Asset Reconstruction Companies/Banks/Financial Institutions/Non-Banking Financial Companies/Secured Creditors for purchase/assignment of 22 NPA accounts, on individual basis with an aggregate book balance of ₹ 2295.77 crores as on 31.03.2015 alongwith underlying securities. The relevant extract from the notice dated 14.07.2015 reads as under: 5. Parties who are interested in purchasing/assignment one or both the accounts identified for sale have to submit their bid for individual accounts in writing to Shri Sudhir Garg, Executive Director, IFCI Ltd. IFCI Tower, 61, Nehru Place, New Delhi 110019 so as to reach him on or before 10.08.2015 by 11.00 a.m. or alternatively may be dropped in the Tender Box, kept at the Reception of IFCI Tower. Bids r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or withdrawn. xx xx Having heard learned counsel for the petitioner at length, we do not find any merit in the arguments raised. Section 13 of the Act empowers the secured creditor to take recourse to one or more measures as delineated under sub-section (4) to recover the secured debt. Clause (a) itself contemplates the right to take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset. The relevant Section 13(4) of the Act reads as under: 13. Enforcement of security interest - xx xx (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely: - (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset: Provided that the right to transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assignment deed and thus all the rights and obligations arising in terms of the loan agreement executed by the borrower with the secured creditors can be enforced by the assignee against the borrower. Therefore, the amount of assignment cannot be claimed to be an amount on the basis of which the Company can claim to settle the account of the secured creditors. In another judgment dated 08.04.2013 in CWP No.7187 of 2013 titled M/s Sachdeva Sons Rice Mills Ltd. Vs. Kotam Mahindra Bank Ltd. others by a Division Bench of this Court, the assignment of debt was found to be permissible in terms of Section 130 of the Transfer of Property Act, 1882. The Bench observed as under: The assignment of debt is permissible in terms of Section 130 of the Transfer of Property Act, 1882. Learned counsel for the petitioner could not point out any prohibition in the documents of loan prohibiting assignment of debt in favour of another Banking company. It is not disputed that respondent No. 1 is a Banking Company registered under the Banking Regulation Act, 1949 with the Reserve Bank of India. We are not able to agree with the observations of Madhya Pradesh High Court in the aforesaid ..... 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