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TMI Blog2010 (1) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... equest of learned counsels for the parties and keeping in view the directions passed by the hon'ble Supreme Court on November 27, 2009, these petitions are taken up for final disposal. 4. There are two writ petitions filed aggrieved by the same order of the AAIFR dated September 18, 2009 and of the BIFR dated October 24, 2008-one by the company in respect of which proceedings are pending and the other petition by a strategic investor in the company. 5. M/s. Raam Tyres Ltd. (for short "the RTL"), one of the petitioners has been before the BIFR from 1997 onwards. The endeavours to revive the company were proving to be fruitless and thus it was agreed to change the management for which an advertisement was issued on August 2, 2006. M/s. Peli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment. The BIFR thus declared that the bid of respondent No. 2 was invalid and unacceptable because of non-completion of the terms of the bid. 6. Be that as it may, respondent No. 2 wanted to put an end to the arrangement and informed the BIFR that it would like to walk out of the deal and the funds should be refunded to it. It is not necessary to go into more details in this aspect but suffice to say that on October 24, 2008, an order came to be passed by the BIFR with a majority of two members and one member dissenting to the effect that the amount infused by respondent No. 2 should be refunded with 6 per cent. interest. The second part of the direction was that a suitable advertisement should be issued for change of management in the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposal before the BIFR furnished by RTL was for introduction of a new promoter involving the change of management though this was being disputed by RTL. The AAIFR found force in the finding of the BIFR that there was lack of clarity in the proposal as to whether infusion of funds would ultimately result in conversion into equity shares and the managing director of RTL was called upon to take a categorical stand in this behalf. The managing director of RTL gave an undertaking that there was no change of management or conversion into equity shares but despite that the BIFR was not convinced of the undertaking. 8. It is interesting to note that the order of the AAIFR records the submissions of the opposite side which are really of responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Rs. 12 crores (rupees twelve crores only) as fresh investment into the company by way of secured loan, secured by first charge on the fixed assets of the company. The loan will carry this interest until the net worth of the company becomes positive. (b) The investment primarily is being made to clear off the entire secured creditors of the company under the one time settlement scheme, to invest further monies for major repairs, purchase of the machinery and renovation of plant to invest into the working capital of the company for conducting production process. (c) The strategic promoters/co-promoters to bring in interest free unsecured loans to meet the shortfall if any arises between the estimated requirement of the scheme and actual i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrow Syntex P. Ltd. v. AAIFR (supra) is based on its own facts. In the given facts of the case a change of management was sought to be brought about without prior approval of the BIFR and there was even opposition by some secured creditors. It was in those circumstances that the direction issued by the BIFR for issuance of a fresh advertisement for change of management was not interfered with. 15. In the present case the change of management is not envisaged and the strategic investor is only infusing funds. What is more important is that all stakeholders seem to be satisfied with the arrangement. 16. Learned counsel for respondent No. 2 strenuously contended that the issuance of a fresh advertisement was in the larger interest of transpa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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