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TMI Blog2010 (11) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... to Banks and Financial Institutions Act, 1993, hereinafter referred to as the Debts Recovery Act, 1993 , a direction was given by the Tribunal on 15-9-2010, to the Petitioner to deposit a sum of Rs. 35 crores with the Industrial Finance Corporation of India Ltd. (IFCI Ltd.) without prejudice to its rights and contentions. The Respondent was also directed not to implement the possession notice as well as the public notice published on 13-9-2010, till the next date of hearing. Against the said order, IFCI Ltd. filed Misc. Appeal No. 352 of 2010 before the Debts Recovery Appellate Tribunal, which stayed the proceedings before the Debts Recovery Tribunal by its order dated 22-9-2010. Aggrieved by such direction, the Respondent had moved Writ Petition (Civil) No. 6652 of 2010, in which an interim order was passed by the Division Bench of the Delhi High Court on 29-9-2010, directing that during the pendency of the writ petition, the writ petitioner would be free to proceed in pursuance of the Public Notice dated 13-9-2010, but the bid was not to be finalized. Since a winding-up order had been passed in respect of the petitioner company on the recommendation of the Board for Industrial an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he allegations made on behalf of the Petitioner Company and submitted that except for sweeping allegations having been made, there was no material proof before the Court to hold that the alleged contemnors had wilfully and deliberately violated the order of stay passed by this Court on 8-10-2010. 7. On being asked as to whether the order passed on 8-10-2010 had been communicated to the alleged contemnors or not, Mr. Andhyarujina submitted that since the order had been passed in the presence of learned counsel for the Respondent Company, it had to be presumed that the same had been conveyed to the Respondent Company by their learned counsel. Learned counsel submitted that a presumption would have to be drawn regarding knowledge of the order passed by this Court on 8-10-2010, by the alleged contemnors since it was duly represented on the said date through counsel. 8. We are unable to accept the submissions made on behalf of the Petitioner Company, since it is for the Petitioner in a contempt petition who alleges contempt, to establish that the alleged contemnor had defied and/or violated the order deliberately and wilfully, despite having knowledge thereof. We cannot lose sight of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E , a third-party financier, whereby on payment of the balance amount of the One-Time Settlement by ACE to the Punjab National Bank, the dues of the Bank stood completely settled and there was no existing liability of the Petitioner Company as far as the Bank was concerned. A default clause was, however, included in the Memorandum of Understanding that in case of default of the Petitioner to repay ACE, the latter would be at liberty to proceed against the Petitioner in terms of the financing documents assigned to it by the Petitioner. In fact, a Deed of Assignment was executed between the Punjab National Bank and ACE on 15-7-2008, for a sum of Rs. 15,01,28,752. This was followed by a further Deed of Assignment between ACE and the Respondent Company for a sum of Rs. 18.63 crores. 12. Thereafter, on 10-8-2009, IFCI Ltd. issued a notice of demand to the Petitioner Company under section 13(2) of the SARFAESI Act, 2002, for a sum of Rs. 1139.75 crores. The said claim was refuted by the Petitioner Company on 17-9-2009, denying the right of IFCI Ltd. to the sum as demanded. It was stated that the Memorandum of Understanding between the Petitioner Company and ACE would indicate that ACE wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rections mentioned hereinbefore in paragraph 2. 15. Mr. Andhyarujina submitted that till such time as the actual dues payable by the Petitioner Company was determined by the Debts Recovery Tribunal-III, Delhi, no proceedings could be continued under the SARFAESI Act, 2002, in respect of a nebulous figure. Mr. Andhyarujina submitted that in view of the One-Time Settlement, which had been arrived at between the Petitioner Company and the Punjab National Bank, the demand raised on behalf of IFCI Ltd. was entirely absurd since at best the said Company could claim what had been assigned to it by ACE. How a sum of Rs. 15,01,28,752 could become Rs. 1139.75 crores, remains unexplained and till such determination of the actual amount payable, proceedings under section 13(2) of the SARFAESI Act, 2002, should not be allowed to be taken, since it would not be possible for IFCI Ltd. To determine as to what part of the Petitioner's property was liable to be taken possession of. 16. Mr. Andhyarujina submitted that it had also to be considered as to whether when the dues of the Punjab National Bank had been duly liquidated by ACE, its assignee could maintain the demand against the Petitioner C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court under challenge. The learned Solicitor General submitted that not only had a recommendation been made for winding up of the Petitioner-Company by the BIFR, but an order of winding up was actually passed by the High Court, whereby the Official Liquidator was appointed to take over the Company and its assets. It was submitted that the High Court had merely allowed IFCI Limited to proceed in terms of the Public Notice issued, but had prevented it from taking any final decision in the matter and the same did not warrant any interference by this Court on account of the financial condition of the Petitioner-Company. 20. As to the submissions made by Mr. Andhyarujina on behalf of the Petitioner-Company, regarding quantification of the dues in the pending proceedings before the Debts Recovery Tribunal-III, Delhi, the learned Solicitor General submitted that the same could not be a reason to stay the auction in terms of section 13(4) of SARFAESI Act, 2002, since the sale proceeds could be kept in a separate account for distribution, once the amount was determined. 21. Mr. Ranjit Kumar, learned Senior Advocate, who appeared for the alleged contemnors, while reiterating the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contemnors had neither violated the order of stay made by this Court on 8-10-2010, nor did it have any intention to do so. 23. On the question of maintainability of the proceedings before the Debts Recovery Tribunal by the Respondent No.1-Company, Mr. Ranjit Kumar urged that there was no prohibition either under the Banking Regulation Act, 1949 or under the SARFAESI Act, 2002, debarring an assignee financial institution or a reconstruction company from continuing a proceeding initiated before the Debts Recovery Tribunal by a banking/financial institution and, in any event, the said question could be raised and answered before the Appellate Tribunal itself. In this regard, learned Senior counsel referred to and relied upon the decision of this Court in ICICI Bank Ltd. v. Official Liquidator of APS Star Industries Ltd. [2010] 104 SCL 37, in which this Court was called upon to decide whether inter se transfers of Non-Performing Assets (NPA) by banks is illegal under the Banking Regulation Act, 1949, as was held by the Gujarat High Court. After considering the submissions made and the materials on record, this Court set aside the judgment of the Division Bench of the High Court, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, this Special Leave Petition has been filed against the interim order passed by the High Court on 29-9-2010, in the Writ Petition filed by IFCI Ltd. seeking to set aside the order dated 27-9-2010, passed by the Debts Recovery Appellate Tribunal limited to the question as to whether the auction sale should be proceeded with further. In effect, the question regarding the auction of the assets of the Petitioner Company is still the subject-matter of the proceedings pending before the Debts Recovery Appellate Tribunal. All the questions raised in this Special Leave Petition are at large in the pending proceedings before the Appellate Tribunal which had stayed the proceedings before the Debts Recovery Tribunal-III, Delhi, directing stay of the auction sale proceedings. 28. Having heard the matter on 9-11-2010, we had reserved judgment in the matter. However, it has subsequently been brought to our notice that certain developments had taken place in the pending Writ Petition before the High Court on 11-11-2010. The High Court took note of the fact that the matter was still pending before the Debts Recovery Appellate Tribunal and that judgment in the Special Leave Petition before th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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