TaxTMI 
TaxTMI 
2015 (3) TMI 621
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....r Industrial and Financial Reconstruction (AAIFR) dated 30.12.2011, which held that the proceedings before Board for Industrial and Financial Reconstruction (BIFR) had not abated. 3. The brief facts are that M/s. Rajat Pharmachem Ltd., the second respondent had availed of credit facilities from various banks, including the petitioner bank. The petitioner bank had inter alia extended these credit facilities in February 2007. The transaction was secured through mortgage of the borrower's property by deposit of title deeds on 15.06.2007. It is averred that the petitioner enhanced the credit limits, subsequent to requests by the respondent through letters dated 12.05.2008 and 13.08.2008. Subsequently, its loans were even restructured in Janu....
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....erved that Dena Bank, representing not less than three-fourth of the secured loan outstanding against the company, had taken possession of the company's assets u/s 13(4) of the SARFAESI Act, 2002 on 12.9.2009. All the secured and unsecured creditors present in the hearing supported the action taken by Dena Bank u/s 13(4) of the SARFAESI Act, 2002. DRT, Mumbai vide its order dated 17.9.2009 directed for maintenance of status quo in the matter. Therefore, the possession of the assets of the company remained with Dena Bank and the action u/s 13(4) of the SARFAESI Act, 2002 was complete. The order of the Hon'ble Orissa High Court in the case of M/s. Nobel Aqua Pvt. Ltd. and Ors. v. SBI did not apply to the instant case, as the company was yet t....
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....eady been taken by Dena Bank u/s 13(4) of SARFAESI Act. A perusal of the record of this case shows that the appellant company had filed an appeal u/s 17 of the SARFAESI Act before the DRT-I, Mumbai, which is registered as S.A. No. 12/2009. The DRT, Mumbai, vide its order dated 22.09.2009 directed the parties to maintain status quo and the said order was continued vide DRT's order dated 11.01.2010 wherein the same was confirmed and extended till disposal of S.A. No. 12/2009. Thereafter, the order dated 22.09.2009 was modified by DRT-I, Mumbai vide its order dated 18.02.2010 wherein the DRT held as follows: "Therefore, I am of the view that the order passed by this Tribunal dated 11.01.2010 is required to be modified to the extent that the....
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.... Act. Therefore, since Section 13(4) action has been stayed, the reference would not abate. 10. In view of our above findings on the preliminary objection raised by the appellant company, we do not consider it necessary to go into the merits of other contentions raised by the appellant company. Therefore, in this event, the abatement of the reference will not be justified. We, therefore, set aside the impugned order and direct the BIFR to take further necessary action according to law." 7. Learned counsel for the petitioner urges that the impugned order and the reasoning of the AAIFR is unsustainable. It is submitted that so long as the measures contemplated under Section 13(4) of the SARFAESI are taken and the satisfaction recorded i....
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....obal Infrastructure v. Kotak Mahindra Bank Ltd. and Ors. in W.P.(C) 4862/2013 (decided on 16.04.2014), to state that the conditions of Section 15(1) have to be satisfied before an abatement can be inferred. In the present case, the borrower appears to have approached the BIFR just before the proceedings under SARFAESI were initiated by the petitioner bank. In fact, the registration of this application under SICA took place on 09.04.2009. The notice under Section 13(2), demanding the outstanding amounts was issued on 02.07.2009; much close on its heels, the bank issued notice under Section 13(4). No doubt, the DRT, upon being approached by the borrower, directed a status quo. However, in the opinion of this Court, mere direction to maintain ....
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.... all the secured creditors unanimously consented to the abatement of the proceedings. In these circumstances, the submission of the borrower that the petitioner did not represent the views of the 3/4th or more of such secured creditors has no force. In the absence of any special form or proceeding to record such consent, it has to be held that if such consent is expressed in the course of proceedings, especially before the BIFR or any other authority under the SICA, such consent is deemed valid. 8. As far as the main contention - which apparently found favour with the AAIFR - with respect to the status quo order which operated in respect of Section 13(4) notice is concerned, this Court is of the opinion that the reasoning is meritless. T....