M/S Ifci Ltd. vs M/S Koshika Telecom
2010 Latest Caselaw 5543 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


%                                             Date of decision: 06.12.2010


+                               WP (C) No.5014/2010


M/S IFCI LTD.                                                   ...PETITIONER

                        Through:        Mr. Maninder Singh, Sr.Adv. with
                                        Mr. P.S.Bindra, Advocate.


                                         Versus


M/S KOSHIKA TELECOM                                             ...RESPONDENT

                        Through:        Mr.Rajiv Bahl, Advocate.


CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE M.L.MEHTA

1.      Whether the Reporters of local papers
        may be allowed to see the judgment?                             No

2.      To be referred to Reporter or not?                              No

3.      Whether the judgment should be                                  No
        reported in the Digest?


SANJAY KISHAN KAUL, J. (Oral)

1. The petitioner is a public financial institution which granted

loan to the respondent-company for setting up of the

telecom business. The two directors of the respondent-

company also gave personal guarantees. To secure the

loan, the tower and other moveable assets owned by the

respondent-company were hypothecated with the

petitioner-Corporation.

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2. The respondent-company and the guarantors failed to repay

the loan and the petitioner thus filed proceedings for

recovery of the debts before the DRT by way of OA

No.148/2002. This application was allowed on 20.04.2006

and a decree was passed against the respondent-company

and its guarantors for a sum of Rs.233,73,92,900-27/- along

with pendente lite and future interest @ 10 per cent per

annum from 19.07.2002 till realization with costs of Rs.1.5

lakhs. The petitioner took out execution proceedings before

the Recovery Officer and in pursuance to the order dated

08.12.2007, the properties mentioned in the schedule to the

annexure of the application were attached and sold for

realization of the dues.

3. The respondent-company also went into liquidation in view

of the orders passed in Company Petition No.75/2002 titled

Lord Krishna Bank v. Koshika Telecom Ltd and a provisional

winding up order has been passed in the said matter. The

Official Liquidator ('OL' for short) was aggrieved by the

order passed by the Recovery Officer on 08.12.2007 and

filed an application in the said Company Petition, which

application was, however, subsequently withdrawn with

leave to file an appeal before the DRAT against the order of

the Recovery Officer. The appeal was filed by OL under

Section 30 of the Recovery of Debts Due to Banks and

Financial Institutions Act, 1993 ('the said Act' for short).

This appeal was, however, dismissed vide order dated

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25.07.2008 against which the OL filed an appeal before the

DRAT. It is during the pendency of the proceedings before

the DRAT that the appeal was compromised and disposed of

by the order dated 05.11.2008.

4. The Recovery Officer thereafter proceeded to sell the

properties of the respondent-Company in auction and since

only one claim, which was yet to be verified, was received

by the OL and no other claim had been received either from

workmen or from secured or unsecured creditors, the

petitioner filed an application before the Recovery Officer

praying for the proceeds realized from sale of assets to be

made over to the petitioner-Corporation. The total

realization is stated to be about 12 crores and thus a large

amount of the debt of the petitioner-Corporation remained

unsatisfied. This application was allowed by the Recovery

Officer on 22.02.2010. While disposing of the application,

the Recovery Officer directed the petitioner to furnish an

undertaking of a competent officer that in future if any

eligible claims in excess of the amount available with the OL

is received by the OL, requisite amount as per law shall be

remitted by petitioner-Corporation to the OL. This is so

because other than the amount realized from the moveable

assets, the petitioner-Corporation had to stand in queue pari

passu with other unsecured creditors and the workmen's

liability would naturally take precedence over it. The

Recovery Officer further directed that a sum of Rs.1 crore

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shall be kept with the OL on a provisional basis for defraying

of various expenses.

5. The OL on behalf of the respondent-Company filed an

appeal before the DRT which allowed the appeal and

modified the order dated 22.02.2010 to the extent that the

respondent-Company was entitled to the amount received

from sale of land by Recovery Officer while the amount

received from sale of moveable assets would remain with

the petitioner. Now, the petitioner was aggrieved by this

order of the DRT dated 11.06.2010 and thus preferred an

appeal before the DRAT which has been dismissed in terms

of the impugned order dated 13.07.2010.

6. On the first date itself, learned counsel for the petitioner

confined his grievance to the direction contained in the

impugned order dated 11.06.2010 of the DRT affirmed by

the order of the DRAT dated 13.07.2010 to the extent that it

directed that realization from sale of immoveable assets

should be deposited with the OL. The order dated

28.07.2010 further records the concession of the learned

senior counsel for the petitioner-Corporation that there was

no dispute with the proposition that the petitioner is not a

secured creditor qua the amount released from sale of

immoveable properties and thus the lien of employees

would have precedence and if there was any other

unsecured creditor, whose claim is verified, the claim of the

petitioner-Corporation would be pari passu with such

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unsecured creditor. It was pointed out by learned counsel

that no such claim had been received despite an earlier

advertisement but in case any such claim is received in

pursuance to a subsequent advertisement, the same could

be dealt with as recorded in that order especially keeping in

mind the undertaking already given by the petitioner

pursuant to the order of the Recovery Officer dated

22.02.2010. Learned counsel also conceded that expenses

for future advertisements would be borne by the petitioner

out of the amount lying in account with the petitioner-

Corporation.

7. We had issued notice to the OL on the same date along with

a copy of the order and learned counsel entered appearance

for the OL on 17.08.2010 but expressed his ignorance about

the order dated 28.07.2010 and requested for some time to

examine the order and file a counter affidavit to that limited

extent. No counter affidavit was filed despite opportunity

granted when the matter was listed on 22.09.2010 and one

further opportunity was sought and thus two weeks time

was granted to the OL to file the counter affidavit subject to

costs. The counter affidavit has, however, been filed only

on 01.12.2010 and that too without serving a copy on the

petitioner. Insofar as the costs is concerned, it is stated that

the counsel for the petitioner waived the costs.

8. A perusal of the counter affidavit does not enlighten us any

further as it is only a recital of what has transpired which is

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also apparent from the petition filed by the petitioner. It is

not disputed that the no claims have been received in

pursuance to the first advertisement except one claim but

even the particulars of that have not been set out nor

whether the same has been verified. All that is submitted

by the learned counsel for OL is that advertisements are

required to be issued in different states i.e. Delhi, Uttar

Pradesh, Jharkhand, Uttarakhand, Orissa and Bihar, for

which permission had been granted by the learned

Company Judge.

9. On a query being posed, learned counsel for the

respondent-Company despite the presence of dealing

person from the Office of OL cannot state as to what would

be the costs of such advertisements. However, learned

senior counsel for the petitioner-Corporation has already

undertaken on behalf of the petitioner that the costs would

be borne by the petitioner. It is also not disputed before us

that no written communication quantifying the amount

required by the OL has been sent to the petitioner.

10. We find that the facts of the present case are peculiar

inasmuch as the money is lying with the petitioner-

Corporation which is a public financial institution to the

extent of sale realization from the immoveable properties in

respect of which the petitioner-Corporation is not a secured

creditor, but no other claims have been verified to show

that there are other unsecured creditors or claim of

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workmen which is yet to be satisfied. The amount realized

from sale of both moveable and immoveable assets is not

even fraction of the amount which is due to the petitioner

under the decree.

11. The function of the OL is only to ensure that the claims

of secured creditors are satisfied to the extent it can be and

unsecured creditors get the remaining amount pari passu.

No such unsecured creditor has come to light despite an

advertisement being issued. The OL is somehow keen only

for the amount to be transmitted to it, the objective of

which is not clear to us. If there were other claims then

naturally the role of OL comes into play and he would have

to distribute the amount pari passu. The amount is secured

as it is lying with the petitioner-Corporation, which is a

public financial institution, and has been only provisionally

appropriated in terms of the orders of the Recovery Officer.

12. We thus consider it appropriate to modify the

impugned orders and permit the petitioner to retain the

amount realized against sale of immoveable properties

making it clear that the claims of any unsecured creditors

would rank pari passu with that of the petitioner-Corporation

to that extent and the claim of workmen would first have to

be satisfied. Insofar as the advertisement costs are

concerned, the OL to communicate the costs in writing to

the petitioner-Corporation and the petitioner-Corporation

will make the payment to OL of that amount along with 20

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per cent additional amount to defray the incidental

expenses. The petitioner-Corporation will abide by the

undertaking given on its behalf before the DRT as well as

before us on 28.07.2010.

13. The writ petition is allowed in the aforesaid terms

leaving the parties to bear their own costs.

SANJAY KISHAN KAUL, J.

DECEMBER 06, 2010                                       M.L.MEHTA, J.
dm

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