9911796707
TMI Blog2016 (8) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to take physical possession of the factory premises. 2. Mr Shetye, learned counsel appearing on behalf of the Ex- Directors, at the outset submitted that no reliefs in this OLR can be granted in view of the fact that the Company (in Liqn.) [M/s Lifeline Industries Ltd.] has filed a reference before the BIFR and which is pending. He submitted that there is a complete bar by virtue of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA, 1985") from proceeding with the present OLR or for that matter, any further proceedings in winding up. 3. On the other hand, Ms Nupur Awasthi, appearing on behalf of ARCIL stated that the debts owed by the Company (in Liqn.) to IOB have been assigned in favour of ARCIL pursuant to a Deed of Assignment dated 12 November, 2014 and which was subsequently registered on 23 January, 2015. A reference, on behalf of the Company (in Liqn.), was filed before the BIFR only thereafter on 21 November, 2015. Looking to these facts, Ms Awasthi on behalf of ARCIL as well as Ms. Jane Cox appearing on behalf of the workers, submitted that by virtue of the 2nd proviso to section 15(1) of SICA 1985, there was a complete bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985 by section 41 of the SARFAESI Act. As can be seen from the said provision, once the debt has been assigned to a securitisation or reconstruction company, there is a complete bar from filing a reference before the BIFR. In the facts of the present case, two things are undisputed:- (i) Firstly, the debt owed by the Company (in Liqn.) to IOB has been assigned in favour of ARCIL, which is admittedly a securitisation or reconstruction company as contemplated under the provisions of the SARFAESI Act; and (ii) This assignment in favour of ARCIL was much prior in point of time to the reference filed on behalf of the Company (in Liqn) before the BIFR. 6. This being the factual scenario, the bar under the 2nd proviso to section 15(1) of SICA 1985, would clearly come into play and no reference could be filed before the BIFR on behalf of the Company (in Liqn.). Consequently, any reference so filed, would be in the teeth of this statutory provision [namely the 2nd proviso to section 15(1) of the SICA, 1985], and would therefore be non-est in the eyes of law. The protection as contemplated under section 22 of SICA 1985, would get attracted only if a valid reference has been made before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the amount outstanding against the financial assistance disbursed to the borrowers have taken measures under section 13(4). 8. The first and second proviso to sub-section (1) of section 15 of the SICA, 1985 operate in different fields. The first proviso is a specific provision made in relation to a securitisation company or reconstruction company, which has acquired financial assets after the commencement of the Securitisation Act, 2002 under section 5(1). The expression "financial asset" is defined in section 2(1) as follows: "(1) "financial asset" means debt or receivables and includes- (i) a claim to any debt or receivables or part thereof, whether secured or unsecured; or (ii) any debt or receivables secured by, mortgage of, or charge on, immovable property; or (iii) a mortgage, charge, hypothecation or pledge of movable property; or (iv) any right or interest in the security, whether full or part underlying such debt or receivables; or (v) any beneficial interest in property, whether movable or immovable, or in such debt, receivables, whether such interest is existing, future, accruing, conditional or contingent; or (vi) any financial assistance." Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bts and receivables of DBS Bank Ltd. under section 5(1) of the Securitisation Act. The reference to the BIFR was made on 26 November, 2010. Clearly in view of the specific language of the first proviso to section 15(1) of the SICA, 1985, the reference was not maintainable. 10. For these reasons we do not find any merit in the contention of the Appellant based on the provisions of section 22 of the SICA, 1985." (emphasis supplied) 8. I must mention here that reference to the 1st proviso to section 15(1) of SICA, 1985 in the aforesaid decision is factually incorrect and should be read as the 2nd proviso. The 1st proviso to section 15(1) inter alia stipulates that if the Board of Directors had sufficient reasons, even before the finalisation of the duly audited accounts of the company, to form the opinion that the company had become a sick industrial company, the Board of Directors had to, within sixty days after it has formed such opinion, make a reference to the BIFR for determination of the measures which ought to be adopted with respect to such company. I must also mention here that the decision of this Court in Paper Prints (India) Pvt. Ltd. 1 was challenged before the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency out of the sum of Rs. 25,749/- already deposited with the Official Liquidator. 12. In addition to the above directions, the Official Liquidator has also sought a direction against IOB to take the physical possession of the factory premises and appoint security guards for the same [prayer clause (b)]. Ms Awasthi, appearing on behalf of ARCIL states that symbolic possession of the factory premises was taken by IOB and thereafter IOB also made an application under section 14 of the SARFAESI Act for the purposes of taking physical possession. This application under section 14 of the SARFAESI Act was allowed by the Magistrate vide his order dated 29 November, 2011 and appointed the authorized officer of IOB to take the physical possession of the factory premises. Thereafter, Mr Nikumbh Kanakiya and others filed a Securitisation Application No. 111 of 2011 before the DRT-III challenging the actions initiated by IOB. Though, initially the DRT has passed an interim injunction restraining IOB from proceeding under the SARFAESI Act, on 8 December, 2012, the said SA was dismissed for default. Thereafter, IOB has assigned the debts owed by the Company (in Liqn.), in favour of ARCIL. ARC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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