9911796707
TMI Blog2011 (1) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... ecured loan from various creditors, banks, etc., including the first respondent herein. But unfortunately, the company could not honour its commitments to the creditors. The company became sick. Therefore, the petitioner-company filed a reference before the Board for Industrial and Financial Reconstruction (hereinafter referred to as "the BIFR") under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "the SICA") for rehabilitation of the company. Admittedly, the reference was taken on file as a case in Case No. 252 of 1998. Initially, ICICI Bank was appointed as an operating agency under section 16(2) of the SICA and thereafter by an order dated September 20, 1999, the BIFR declared the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., on August 8, 2009, as directed by the BIFR and the same is pending. 3. When the BIFR proceeding is so pending as narrated above, the first respondent has issued a notice under section 13(2) of the SARFAESI Act on June 3, 2010, claiming a sum of Rs. 13,36,48,133.64 which is due as on May 31, 2010, with further interest thereon. It is against the said notice, the petitioner has come up with this writ petition. 4. The petitioner mainly contends that the petitioner is protected under section 22 of the SICA and therefore all the proceedings initiated under section 13(2) of the SARFAESI Act is wholly without jurisdiction. The proceeding before the BIFR has been abated since the petitioner has not taken any measure to recover their secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was admittedly pending. Now, the question is whether the said proceeding has abated by operation of the second proviso to sub-section (1) of section 15 of the SICA as amended by section 41 read with Schedule of the SARFAESI Act. At this juncture, it would be worthwhile to extract the said proviso, which reads as follows: "Provided also that on or after the commencement of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, where a reference is pending before the Board for Industrial and Financial Reconstruction, such reference shall abate if the secured creditors representing not less than three-fourths in value of the amount outstanding against financial assistance disbursed to the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the rights under sub-section (4). (9) In the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuance to sub-section (4) unless exercise of such right is agreed upon by the secured creditors representing not less than three-fourths in value of the amount outstanding as on a record date and such action shall be binding on all the secured creditors." 10. A combined reading of section 13(2) and 13(9) of the SARFAESI Act would make it abundantly clear that mere issuance of notice under section 13(2) of the SARFAESI Act shall not amount to taking of mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s than three-fourths in value of the amount outstanding, may take action under section 13(4) of the SARFAESI Act. From this, it is crystal clear that mere issuance of notice under section 13(2) of the SARFAESI Act shall not amount to taking measures to pass order under section 13(4) of the SARFAESI Act to take possession of the said secured assets. 11. In this case, indisputably, there are other secured creditors who have not even issued any notice under section 13(2) of the SARFAESI Act. Thus the creditors representing not less than three-fourths in value of the amount outstanding, have not taken measures to recover the said secured debt under section 13(4) of the SARFAESI Act and therefore, as per the second proviso to section 15(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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