9911796707
TMI Blog2011 (1) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 1 did not adhere even to the rescheduled payment plan. 3. On 27-3-1997, the Industrial Reconstruction Bank (Transfer of Undertaking and Repeal) Act, 1997 ('the 1997 Act') came into force and by virtue of notification, S.O. 242(E), dated 25-3-1997 the undertakings of the IRBI were transferred to and vested in the IIBIL with effect from 27-3-1997. 4. On 14-8-1997, the IIBIL gave a notice to respondent No. 1 under section 38 of the 1984 Act recalling the loan. The notice did not bring any payments from respondent No. 1 and after about 2 years from the date of the notice, in the year 1999, the IIBIL filed an application before the Rajasthan High Court, under section 40 of the 1984 Act. The application filed by the IIBIL was registered in the High Court as S.B.C. Misc. Application No. 40/99. The High Court issued notice on the application but after hearing the other side, rejected it by order dated 1-11-2002 holding that the application was not mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1-11-2002 rejecting its application filed against the borrower company, respondent No. 1, under section 40 of the 1984 Act. 7. At this stage, it will be useful to take a look at some of the provisions of the 1984 Act and the 1997 Act. Section 2(a) of the 1984 Act defined "assistance" to mean any direct or indirect financial, managerial or technical assistance granted by the Reconstruction Bank in pursuance of its business referred to in section 18. Section 2(c) defined "assisted industrial concern" to mean any industrial concern to which any assistance was given by the Reconstruction Bank. Chapter VIII of the Act contained sections 36 to 51 dealing with the "Special Powers of the Reconstruction Bank". Section 38, in that chapter, authorized the IRBI, under certain conditions enumerated in clauses (a) to (f ), to ask, by notice in writing, any industrial concern to which it had granted any assistance to forthwith discharge in full its entire dues and also discharge its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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 or pledged to the Reconstruction Bank to show cause, on a date to be specified in the notice, as to why an order for the sale of such property or so much of such property, as would, on being sold, realise, in its estimation, an amount equivalent in value to the outstanding dues of the industrial concern to the Reconstruction Bank, together with costs of the proceedings taken under this section, shall not be made; or (c)pass an ad interim order attaching any property of the industrial concern which has not been assigned, charged, hypothecated, mortgaged or pledged to the Reconstruction Bank, or so much of such property, as would on being sold, realise, in its estimation, an amount equivalent in value to the outstanding dues of the industrial concern to the Reconstruction Bank, together with costs of the proceedings taken under this section, and pass an order calling upon the industrial concern to show cause on a date to be specified in the notice as to why such order of ad interim attachment shall not be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uildings, vehicles, cash balances, deposits, foreign currencies, disclosed and undisclosed reserves, reserve fund, special reserve fund, benevolent reserve fund, any other fund, stocks, investments, shares, bonds, debentures, security, management of any industrial concern, loans, advances and guarantees given to the industrial concerns, tenancies, leases and book debts and all other rights and interests arising out of such property as were immediately before the appointed day in the ownership, possession or power of the Reconstruction Bank in relation to its undertakings, within or without India, all books of account, registers, records and documents relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind within or without India then subsisting of the Reconstruction Bank in relation to its undertakings. (3) All contracts, deeds, bonds, guarantees, powers of attorney, other instruments and working arrangements subsisting immediately before the appointed day and affecting the Reconstruction Bank shall cease to have effect or to be enforceable against the Reconstruction Bank shall be of as full force and effect against or in f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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