TMI Blog2011 (1) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... . LODHA, JJ. Sanjay Bhatt and Amit Wadhwa for the Appellant. Dr. Manish Singhvi, Sahil S. Chauhan and P.V. Yogeswaran for the Respondent. JUDGMENT Aftab Alam, J. - The appellant, Industrial Investment Bank of India Limited ( IIBIL ), is the successor of the Industrial Reconstruction Bank of India ( IRBI ) constituted under section 3(1) of the Industrial Reconstruction Bank of India Act, 1984, ( the 1984 Act ). 2. In the year 1985, the IRBI had sanctioned a loan of rupees twenty two lakhs (Rs. 22,00,000) in favour of M/s Jain Cables Pvt. Ltd., respondent No. 1. Out of the sanctioned amount a sum of rupees twenty lakhs (Rs. 20,00,000) was actually disbursed in the year 1991 and the balance amount of the loan was cancelled. The repayment of the loan was secured by mortgage of the immovable properties of the borrower company and by creating the charge of hypothecation over its immovable properties in favour of the IRBI. The borrower company defaulted in repayment of the loan and in 1994, on its request, the IRBI granted to it an amended schedule of payment under which the last instalment of the loan amount was to be paid on 15-2-1996. The respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 40 or more remain available to the petitioner. An overall reading of the repealing Act of 1997 also does show that it predominantly comprehends the rights and liabilities of Industrial Investment Bank of India, which are to devolve on Industrial Reconstruction Bank of India, as the Act is to provide for transfer and vesting of the Undertakings to the Company to be formed and registered as company under the Companies Act, and for matters concerned therewith, or incidental thereto, and also to repeal the 1984 Act." 5. For the sake of the record, it may also be noted that during the pendency of the proceeding before the High Court, the IIBIL also moved the Debt Recovery Tribunal. But its application to the Debt Recovery Tribunal was against the guarantor alone and no relief was claimed against respondent No. 1, the borrower company. The application against the guarantor was decreed ex parte but the decree has so far not borne any fruits as it was a personal guarantee and there were no assets against which the decree may be executed. 6. The IIBIL has now brought this matter in appeal, by grant of special leave, against the order of the High Court dated 1-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e granted to it, or for the sale or lease of any other property, of the industrial concern; or ( ii )****** ( iii )for an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment from the premises of the industrial concern without the previous permission of the Board, where such transfer or removal is apprehended; or ( iv )for an order for the appointment of a receiver where there is apprehension of the machinery, equipment or any other property of substantial value which has been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank, being removed from the premises of the industrial concern or of being transferred without the previous permission of the Reconstruction Bank. (2)****** (3) Where an application is for any relief mentioned in sub-clause ( i ) of sub-section (1), the High Court may, ( a )by an order, authorise the Reconstruction Bank to grant lease of such property to such person and on such terms and conditions as may be specified in the said order; or ( b )pass an order calling upon the person whose property has been assigned, charged, hypothecated, mortgaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Reconstruction Bank of India established under sub-section (1) of section 3 of the 1984 Act. Section 3 of the 1997 Act provides that on the appointed date (27-3-1997) the undertakings of the Reconstruction Bank shall be transferred to and vest in the Company. Section 4 of the 1997 Act deals with the effect of vesting of undertaking in the Company and provides as follows: "4. General effect of vesting of undertaking in Company (1) The Central Government, being the shareholder of the Reconstruction Bank immediately before the appointed day, shall be deemed to be registered, on and from the appointed day, as a shareholder of the Company. (2) The undertakings of the Reconstruction Bank which are transferred to, and which vests in, Company under section 3 shall be deemed to include all business, assets, rights, powers, authorities and privileges and all properties, movable and immovable, real and personal, corporeal and incorporeal, in possession or reservation, present or contingent of whatever nature and whatsoever situate including lands, buildings, vehicles, cash balances, deposits, foreign currencies, disclosed and undisclosed reserves, reserve fund, special reserve fund, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Chapter VIII of the Act so repealed will continue to be applicable in respect of the arrangements entered into by the Reconstruction Bank with an industrial concern under section 18 thereof up to the appointed day and the Company will be entitled to act upon and enforce the same as fully and effectually as if this Act had not been enacted." 10. A plain reading of sub-section (4) of section 4 coupled with sub-section (2)( b ) of section 13 of the 1997 Act would make it manifest and clear that any cause of action by the IRBI in relation to its undertakings existing immediately before 27-3-1997 may be continued and enforced by the IIBIL as it might have been enforced by the IRBI if the 1997 Act had not been enacted. And further, that the provisions of Chapter VIII of the 1984 Act, that include section 40, would continue to be applicable in respect of the arrangements entered into by the IRBI with an industrial concern under section 18 of the 1984 Act and the IIBIL would be able to enforce the same as fully and effectually as if the 1997 Act had not been enacted. 11. The High Court in the impugned judgment referred to section 13 of the 1997 Act, but failed to notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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