Delhi High Court
Kotak Mahindra Bank Ltd. vs Canara Bank And Anr. on 20 February, 2015
Author: S.Ravindra Bhat
$~18
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on 20th February, 2015
+ W.P.(C) 1544/2015 & C.M.No.2747/2015
KOTAK MAHINDRA BANK LTD. ..... Petitioner
Through: Ms.Sushmita Banerjee, Adv.
versus
CANARA BANK AND ANR. ..... Respondents
Through: Mr.V.K.Tandon, Adv.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.K.GAUBA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. Issue notice.
2. Mr.V.K.Tandon accepts notice on behalf of the respondents.
3. In view of the fact that the impugned order dismissed the petitioner's
appeal in limine, the facts only to that extent are necessary.
4. Learned counsel for the parties agreed that matter can be disposed of
at this stage.
5. The petitioner is aggrieved by the order of the Appellate Authority for
Industrial and Financial Reconstruction (AAIFR) dated 10.12.2014 in
Appeal No.48/2014. In that appeal, the petitioner was aggrieved against the
order of Board for Industrial and Financial Reconstruction (BIFR) dated
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Page 1
20.01.2014. The matter pertains to the sick company Electrex (India) Ltd. in
respect of which the petitioner was appointed as the Operating Agency (OA)
by an order dated 19.8.2011, which directed change of management. The
petitioner, being OA, was expected to take consequential steps. It appears
that the sick company preferred an appeal against this order. In the appellate
proceedings, stay of the order directing change of management (made by the
BIFR) on 11.08.2011) was made. Ultimately, the appeal was dismissed on
24.06.2013.
6. The petitioner submits that it had not been issued notice in the said
appeal and that in the meanwhile on 08.11.2011 the BIFR adjourned the
proceedings sine die. Apparently, after dismissal of the sick company's
appeal, the proceedings before the BIFR were revived on 12.09.2013. The
record of proceedings of that day shows that only few parties, including the
respondent appeared. Accordingly the present writ petitioner was not so
represented; same position persisted on 19.11.2013 and the BIFR noticed
that the OA had not taken steps to advertise the change of management and
issued Show Cause Notice in this regard to it. Apparently, noting that the
petitioner was not represented the BIFR issued notice. Even on 19.11.2013
the petitioner was not represented before the BIFR but became aware of the
proceedings later on and claims to have written to the sick company asking
for particulars, to comply with the directions in respect of the change of
management. The petitioner sought to represent, but against the show-cause
notice received by it. The BIFR was not satisfied with its response. The
petitioner had, inter alia, contended that the six weeks' time was necessary
to comply with the directions to advertise change of management given that
the sick company had sought some more time to furnish particulars. It was
WP(C) 1544/2015
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under these circumstances that the BIFR directed criminal proceedings to be
initiated before the competent Court against the OA. OA's appeal was
rejected by the appellate order.
7. We have carefully considered the records and the submissions that
there was stay of the proceedings (of the order directing change of
management) itself noticed in the order of BIFR dated 12.09.2013. This
Court is also conscious after the grant of stay, on 08.11.2011, the BIFR had
adjourned the proceedings sine die.
8. Having regard to these circumstances, the Court is of the opinion that
the AAIFR should not have similarly dismissed the petitioner's appeal given
the nature of the consequences the petitioner is likely to face. Consequently,
the impugned order is hereby set aside, the petitioner's appeal is directed to
be taken on record and heard on its merits after considering the views of the
concerned parties.
9. The AAIFR shall pass its final order in the appeal expeditiously and
in accordance with law. The petition and the pending applications are
allowed to the above terms.
10. No cost.
S. RAVINDRA BHAT, J
R.K.GAUBA, J
FEBRUARY 20, 2015
mr
WP(C) 1544/2015
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