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TMI Blog2010 (2) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... "the Tribunal") in S. A. No. 15 of 2005 were allowed by setting aside the order passed by the Tribunal, dated February 7, 2005. 3. The facts which are not in dispute, briefly stated, are as under : The petitioner-company availed of credit facilities from ICICI Ltd., (subsequently merged with ICICI Bank Ltd.) (ICICI), Industrial Development Bank of India (IDBI) and Industrial Finance Corporation of India (IFCI). The petitioner-company availed of loan facility from ICICI for an amount of Rs. 18.97 crores towards various loans which amounts to 22.5 per cent. of the total loans sanctioned, apart from the various loans from IDBI which constitutes 46.7 per cent. of the loan amount and the remaining from IFCI by offering immovable properties as securities including the plant and machinery, machinery spares, tool and accessories and other movables of plant and machinery situated at its factory. As the petitioner committed default in repayment of the loans, ICICI, IDBI and IFCI filed O.A. No. 945 of 2001 in the Tribunal for recovery of the amounts due and for enforcement of the securities. 4. As the petitioner became sick in terms of the Sick Industrial Companies (Special Provisions) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the secured creditors are pending, the first respondent stepped into the shoes of ICICI, the third applicant in the O. A. and that the proceedings before the BIFR shall not get abated unless the secured creditors not less than three-fourths in value of the amount outstanding against the financial assets disbursed to the borrower of such secured creditors, have taken steps to recover their secured debt under section 13(4) of the SARFAESI Act. One of the secured creditors cannot take proceedings under section 13(4) since the notice under section 13(2) does not disclose that the securitisation proceedings are also being taken up on behalf of the other two secured creditors. In the absence of their consent, the reference pending before the BIFR will not abate and the petitioner-company is entitled to the statutory protection afforded to it under section 22 of the SICA. It was further held that the Mandal Executive Magistrate has not followed the provisions of the SARFAESI Act and the Enforcement Rules in conducting the proceedings on January 22, 2005 and January 23, 2005. Accordingly, the proceedings taken by the first respondent under the SARFAESI Act have been set aside. Aggrieved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and since it received the amounts from the Global Profiles Limited subsequently during the pendency of the writ petition, the matter can be remitted to the Tribunal to pass appropriate orders in view of the subsequent developments by reviewing its order. 8. Sri S. Niranjan Reddy, learned counsel for the respondents contended that once the first respondent, ARCIL obtained permission from the other two secured creditors to proceed against the petitioner to exercise any rights conferred on it or pursuant to sub-section (4) of section 13, it is the proceedings before the BIFR which gets abated. Therefore, the bar under section 22 of the SICA will not come in the way of the first respondent for taking possession of the properties. He further contended that the consent of the secured creditors not less than three-fourths in the value of the amount outstanding under section 13(9) of the SARFAESI Act amounts to taking measures to recover the amount. As SASF which obtained the assignments from the IDBI gave its consent under section 13(9) for exercise of the powers under section 13(4) of the SARFAESI Act on January 10, 2005 and a similar consent was also obtained from the IF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt outstanding against financial assistance disbursed to the borrower of such secured creditors, have taken any measures to recover their secured debt under sub-section (4) of section 13 of that Act." 11. It is not disputed that on the date of acquisition of the financial assets by the first respondent, the reference before the BIFR was pending. The first respondent which initiated the proceedings issued notice under section 13(2) of the SARFAESI Act after obtaining the consent of the SASF which stepped into the shoes of IDBI, wherein it gave consent under section 13(9) to take measures under the SARFAESI Act and permitted the first respondent to file a copy of the consent given by them with the BIFR, if required so that the reference before the BIFR may abate. Any recovery from the secured assets be distributed among the charge holders as per their rights. Similar consent was also obtained from IFCI, wherein it agreed for the first respondent exercising rights under sub-section (4) of section 13 of the SARFAESI Act. 12. To get the proceedings before the BIFR abated, under third proviso to section 15 of the SICA, the secured creditors not less than three-fourths in value of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independently to recover the secured debt, the proceedings will not get abated. If the proceedings have not abated, the consent obtained under section 13(9) will not enure to the benefit of the first respondent to claim that on obtaining such consent, the proceedings get abated. 14. It is also not disputed before us that the other secured creditors have not taken any measures to secure the debt from the petitioner, the industrial company. Further, even if we assume that SASF has given consent to take measures on January 10, 2005, its finance is only 46.7 per cent. of the loan lent. The loan lent by the first respondent comes to 22.5 per cent. If put together the finance given by both of them comes to 69.2 per cent. which is less than three-fourths of the amount borrowed by the petitioner. Similar consent has not been given by the IFCI Limited except for exercising the rights under section 13(4) of the SARFAESI Act, which the first respondent can only exercise on getting the proceedings before the BIFR abated. 15. In view of the same, the impugned orders passed by the Appellate Tribunal in R. A. Nos. 10 and 11 of 2005 are liable to be set aside and we accordingly do so. 16. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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