2023 (5) TMI 612
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....en dismissed on the ground of limitation. 2. In brief, the Appellants, namely, Bank of India, New York, The Export Import Bank of India, State Bank of India & Union Bank of India, Hong Kong Branch along with Barclays Bank PLC, extended term loan facilities to the tune of USD 45 Million to M/s Svizera Holdings B.V., a company incorporated under the laws of the Netherlands (hereinafter referred to as 'Borrower'), a wholly owned foreign subsidiary of the Respondent (Maneesh Pharmaceuticals Limited) vide facility agreement dated 24.09.2007 (in short 'Facility Agreement') which was executed between the Borrower, the Respondent as the Guarantor and Barclays Bank PLC, Hong Kong Branch, acting as an Agent and the Offshore Security Trustee of the Financial Creditors (Facility Agent). 3. Subsequently, the part of commitment of Barclays Bank PLC (as the Lender) was transferred to Union Bank of India, Hong Kong vide transfer certificate dated 03.11.2008. Therefore, Union Bank of India also joined with other lenders in filing the Company Petition in its capacity as the Financial Creditor. 4. The term loan extended vide facility agreement was secured by way of "(a) 2 (two) Deeds of Hypothec....
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.... the entire outstanding amount due but despite that repayment was not made. 9. The Facility Agent filed a suit against the Borrower and the Respondent vide case no. 2012 Folio 277 (Foreign Suit) before the High Court of Justice Queen's Bench Division Commercial Court, London (Queen's Bench, UK) on 22.02.2012 in terms of clause 37.1 of the facility agreement. The said suit was contested by the Respondent on merits by filing a statement of defence on 29.05.2012. 10. While Foreign Suit was pending the Respondent filed a reference with BIFR u/s 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on 06.11.2012 which was registered as BIFR Case No. 74 of 2012 (Reference). The BIFR vide its order dated 07.12.2012 registered the reference and restrained the Respondent from disposing of or alienating in any manner any fixed assets of the Respondent without consent of the BIFR. 11. On the other hand, the Respondent contested the foreign suit without mentioning the pendency of the Reference before the BIFR nor mentioned about the foreign suit in the reference. The Respondent also did not raise any objection in regard to continuation of the foreign suit on account o....
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....e of default according to the Appellant is 21.02.2012 and the period of three years stood expired on 21.02.2015 when the right to apply accrued whereas the application under Section 7 of the Code was filed on 30.08.2019 much beyond the period of limitation. It is also the case of the Respondent that books of accounts of the Respondent does not reflect any debt due and payable and that the Appellants have admitted that pursuant to the judgment dated 08.04.2014 passed in the foreign suit, UDS 727648.32 has been realized from sale of offshore securities and that the Appellants have not preferred any proceedings between the year 2014 to 2017 whereas the application under Section 7 of the Code has been filed only in 2019 which was hopelessly time barred. 16. In rebuttal, case of the Appellant is that while the foreign suit was pending, the Respondent filed a reference on Form A which was registered on 07.12.2012 and a restrained order was passed. The Facility Agent along with Security Trustee filed an Intervention Application in the pending reference and in view of the Section 22(5) of the SICA, the period during the pendency of the reference till 01.12.2016 when the Act was repealed h....
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.... in view of Clause 37.1 of the facility agreement whereas the Respondent while contesting the foreign suit on merits, filed a reference under Section 15(1) of the SICA on 06.11.2012 which was registered by the BIFR on 07.12.2012. 20. It is further argued that the foreign suit was decided on 08.04.2014 directing the Respondent and Borrower to pay Approx. USD 35 Million and the foreign judgment was not challenged by the Respondent and has thus attained finality. It is further argued that BIFR vide its order dated 21.11.2014, admitted the reference declaring the Respondent a sick industrial company in terms of Section 3(1)(o) of the SICA. The Appellants filed an application for intervention before the BIFR to intervene in the reference and in the reply to the application the Respondent clearly admitted its liability qua the Appellants. It is also submitted that though the pleadings in the intervention application were complete but it was not finally decided by the BIFR till the repeal of the SICA. It is argued that for the purpose of filing the foreign suit prior consent of the BIFR was not required because the SICA does not have extra territorial jurisdiction. In this regard, relian....
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....orrower -Svizera expired between 26.06.2014 and 30.07.2014, upon the expiry of the period of three years from the date when the right to apply accrued (dates of NPA) and thus, the application filed under Section 7 is hopelessly time barred as it has been filed on 30.08.2019 after over a period of eight years from the date of NPA. It is further submitted that the lenders did not file any suit by 30.07.2014 before any court of law in India rather they filed a foreign suit against the Borrower and the Guarantor (Respondent) and obtained a judgment and decree dated 08.04.2014 during the period when the reference was pending before the BIFR under the SICA. It is further submitted that there is no acknowledgment as per Section 18 of the Act for the purpose of extension of period of limitation because in the present case the limitation had expired on 26.06.2014 and 30.07.2014. In this regard, reference has been made to a decision of the Hon'ble Supreme Court in the case of Sesh Nath Singh Vs. Baidyabati Sheoraphuli Coop. Band Ltd. , (2021) 7 SCC 313. It is further argued that as per principle of co-extensiveness, non-payment of dues can be raised against the Guarantor for the time barred ....
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....nechem Ltd. (Supra) in which it has been held that: "28. The question that arises for consideration of this Court is whether the respondent no.1 was required to obtain any prior consent of the BIFR under Section 22 of the SICA for taking steps in execution of the said two foreign awards in respect of the properties of the petitioner situated outside India. 29. A conjoint reading of Section 1(2) and Section 21 of the SICA clearly indicates that the provisions of the SICA are extended only to the whole of India and not outside India. The expression "any of the properties of the Industrial Company" in Section 22 of the SICA will ppn 17 12.conp-89.15(j).doc have to be read with Section 1(2) of the SICA which provides for territorial jurisdiction of the BIFR which is extended only to any part of this country and not outside India. A reference to the judgment of this Court in the case of Murablack India Limited (supra) will be useful to deal with this issue raised by the learned senior counsel for the respondents. It is held by this Court in the said judgment that prima facie, provisions of Section 22 which have only territorial application would not be attracted to restrain a party....