Sainsons Pulp & Papers Ltd. v. State Bank of India
2015-06-03
P.S.RANA
body2015
DigiLaw.ai
Order P.S. Rana, J. Present civil writ petition is filed under Article 226 of Constitution of India seeking the following relief. (a) Direct respondent bank to immediately consider the issues raised in request letter/representation dated 3.3.2011 and provide for the measures to check and control the sickness of the unit of the petitioners inter alia with following provision: (a) (i) Conversion of the liability under existing/utilized cash credit limit of Rs.15.00 into working capital term loan and match the installments along with other term loans. (ii) Conversion of the liability under existing/utilized letter of credit and bank guarantee limits into working capital term loans and match the installments along with other term loans. (iii) Sanction of appropriate fresh/additional cash credit limit by assessing the requirement by applying the norms as per Tandon committee report with concessional rate of interest and others concessions/margins in tune with rate of interest and concessions/margins as provided for in the sanction letter dated 4.6.2008. (iv) Reversal by way of waiver the up to date interest as having been debited to the cash credit account and charged against term loans letter of credit limit and bank guarantee limit. (v) Re-schedulement of payment of term loans by extending the moratorium period up to 31.3.2012. (vi) Grant of permission to sell the properties belonging to clients at Sr. No. 2, 3, 5 and 6 alleged to have been mortgaged up to the bank by way of collateral security so that sale proceeds could be used and employed to meet out the paucity of working capital so as to ensure proper and profitable running of the unit. (vii) Restoration of margin on stocks and consumable stores, debtors, FLC/ILC/BG so as to be in consonance with terms of margins stipulated in the First Sanction of term loan. 2. (b) Direct respondent bank to provide for immediate measures so as to enable the petitioners to forthwith start the operation of the unit so that loss due to closure of the unit is averted and further sickness is arrested. (i) Release of the already sanctioned additional cash credit limit of Rs.5.00 crores without insisting for provision of corporate guarantees by M/s Sainsons Fibres Ltd. and M/s Executive Infrabuild Pvt. Ltd. (ii) Release requisite sum and requisite Bank Guarantee/Security to the HPSEB so that power connection is immediately restored. (iii) Allow full utilization of the letter of credit limit of Rs. 10.00 crores.
(iii) Allow full utilization of the letter of credit limit of Rs. 10.00 crores. 3. (c) Direct respondent Nos. 3 and 4 to forthwith cause the release of capital subsidy of Rs. 30.00 lac. 4. (d) Direct respondent No. 5 to waive the condition of export obligation in the event of unit not being rehabilitated. 5. (e) Direct respondent No. 5 to consider the start of period of 8 years within which petitioner companies was obliged to complete the export obligation from the day when unit becomes operational after rehabilitation thereof. 6. E(i) Direct respondent No. 1 bank to reconsider the one time settlement proposal on realistic base and to grant an opportunity of hearing to the petitioners Companies to put forth their case for OTS. 7. E(ii) Quash and set aside letter dated 18.12.2014 rejecting OTS proposal. 8. E(iii) Direct the respondent bank to allow the petitioner to bring a better buyer in respect of the properties/assets and also in respect of the properties not mentioned in Annexure P-47. 9. E(iv) Direct respondent No. 1 bank to bear expenses of security guards, generators being run at the industrial premises at village Taliwal, Tehsil Haroli District Una H.P. amounting to Rs. 5,00,000 per month in view of the facts that symbolic possession under SARFASI has already been taken by respondent No.1 bank. 10. E(v) To direct respondent No.1 bank to provide the guidelines for submitting of one time settlement as applicable to it and to follow these guidelines. 11. E(vi) Direct respondent No. 1 not to take any further action for recovery till the decision of proceedings pending before AIFR. 12. E(vii) In alternative respondent No. 1 may be directed to proceed against the principal security i.e. land, building and factory premises at the first instance. 13. Per contra response filed on behalf of the respondent i.e. State Bank of India pleaded therein that petitioners have violated the financial discipline of the bank and did not adhere to the payments schedule. It is pleaded that unit is not functioning. It is pleaded that power of unit was cut off in February 2011 by H.P. State Electricity Board for non-payment of dues to the tune of Rs. 64 lacs and a sum of Rs. 101,69,57,370/- were due from petitioners to the bank as on dated 27.5.2011.
It is pleaded that unit is not functioning. It is pleaded that power of unit was cut off in February 2011 by H.P. State Electricity Board for non-payment of dues to the tune of Rs. 64 lacs and a sum of Rs. 101,69,57,370/- were due from petitioners to the bank as on dated 27.5.2011. It is pleaded that notice dated 28.5.2011 was issued to the petitioners under Section 13 (2) of SARFESI Act and petitioners are not legally entitled to invoke the writ jurisdiction of High Court as alternative efficacious and speedy remedy is available to the petitioners to approach the Debt Recovery Tribunal in accordance with the provisions of Act. It is pleaded that OA No. 124 of 2012 for recovery of Rs.1161527277.95 was filed before the Debt Recovery Tribunal (I) Chandigarh on dated 29.12.2012 and proceedings are pending before the Debt Recovery Tribunal Chandigarh. It is pleaded that an amount of Rs.174,59,40,719.80 was due in March 2015 from petitioners Companies and presently an amount of Rs. 179,67,14,362.38 is due on dated 30.4.2015. It is pleaded that after adjusting the sale proceeds of properties sold in village Baltana Zirakpur namely one commercial shop sold for Rs. 21 lacs and second property namely residential house sold for Rs. 51 lacs on dated 14.3.2015 and properties were auctioned on dated 14.3.2015 and pursuant thereto the sale certificate was issued in favour of auction purchaser after receipt of the entire auction money. It is pleaded that petitioners resisted the taking over the factory in village Talhiwal on dated 19.1.2015 with help of local sympathizers including ladies and further pleaded that huge outstanding amount against the petitioners could only be recovered by sale of residential house in Panchkulla and factory, land, building including plant and machinery situated at Tahliwal which too would be insufficient to satisfy the amount outstanding to respondent bank. It is further pleaded that disputed facts are involved and thereafter one time settlement was turned down. It is pleaded that amount due could only be recovered by way of sale of properties of petitioners including residential house. Prayer for dismissal of civil writ petition sought. 14. Court heard learned Advocates appearing on behalf of the parties and Court also perused the entire record carefully. 15. Following points arise for determination in this civil writ petition at this stage of case:- 1.
Prayer for dismissal of civil writ petition sought. 14. Court heard learned Advocates appearing on behalf of the parties and Court also perused the entire record carefully. 15. Following points arise for determination in this civil writ petition at this stage of case:- 1. Whether proceedings of present civil writ petition No. 2805 of 2011 titled M/s Sainsons Pulp & Papers & others vs. State Bank of India and others are liable to be suspended as per Section 22 of Sick Industrial Companies (Special Provisions) Act 1985 till the pendency of AAIFR appeal No. 13 of 2015 before the competent authority under Sick Industrial Companies (Special Provisions) Act 1985or till pendency of proceedings under Sick Industrial Companies (Special Provisions) Act 1985? 2. Final Order. Findings on point No.1 16. Petitioners have specifically pleaded in para No. 112(i) of the amended petition that BIFR order was passed in case No. 79 of 2012 dated 3.11.2014 under Sick Industrial Companies (Special Provisions) Act 1985 and thereafter AAIFR appeal No. 13 of 2015 was filed against the BIFR order announced in case No. 79 of 2012 dated 3.11.2014 before the appellate authority under Sick Industrial Companies (Special Provisions) Act 1985 which is pending for disposal. As per Section 22 of Sick Industrial Companies (Special Provisions) Act 1985 where inquiry under Section 16 of Sick Industrial Companies (Special Provisions) Act 1985 is pending or where any scheme referred to under Section 17 is under preparation or consideration or where any appeal under Section 25 of the Sick Industrial Companies (Special Provisions) Act 1985 is pending then all other legal proceedings would be suspended. It was held in case reported in (1989)Vol.66 Comp. Cases page 124 (Allahabad High Court) titled Comet Filaments (India) Ltd. vs. Pradeshya Industrial and Investment Corporation of U.P. Ltd. that as long as proceedings under Sick Industrial Companies (Special Provisions) Act 1985 are pending then property of the Companies would remain under direct control of the authorities under Sick Industrial Companies (Special Provisions) Act 1985 and no proceeding in respect of property of the Companies would be proceeded except with consent of competent authority under Sick Industrial Companies (Special Provisions) Act 1985. (See AIR 2012 SC 1440 titled Raheja Universal Limited vs. NRC Limited and others. Also see AIR 2015 SC 403 titled Ghanshyam Sarda vs. M/s Shiv Shankar Trading Co. and others.
(See AIR 2012 SC 1440 titled Raheja Universal Limited vs. NRC Limited and others. Also see AIR 2015 SC 403 titled Ghanshyam Sarda vs. M/s Shiv Shankar Trading Co. and others. Also see AIR 2009 SC (Supp) 1947 titled M.D. Bhoruka Textiles Limited vs. M/s Kashmiri Rice Industries.) Sick Industrial Companies (Special Provisions) Act 1985 is a special Act and it is well settled law that when there is conflict between special law and general law then special law always prevails. It is held that Section 22 of Sick Industrial Companies (Special Provisions) Act 1985 would also apply to proceedings filed under Article 226 of Constitution of India. In view of above stated facts point No.1 is answered in affirmative. Point No.2 (Final Order) 17. In view of above findings on point No. 1 it is ordered that proceedings of civil writ petition No. 2805 of 2011 will remain under suspension till pendency of proceedings under Sick Industrial Companies (Special Provisions) Act 1985 before the competent authority of law. It is further held that parties will be at liberty to obtain the consent of BIFR board or appellate authority for continuation of legal proceedings relating to civil writ petition No. 2805 of 2011. Amended response to amended petition will be filed by respondents after completion of proceedings under Sick Industrial Companies (Special Provisions) Act 1985 or after obtaining consent of competent authority under Sick Industrial Companies (Special Provisions) Act 1985 for continuation of proceedings of civil writ petition No. 2805 of 2011. Interim order passed accordingly.