Delhi High Court
Yogesh Chandra Jhalani vs Industrial Finance Corporation ... on 23 May, 2017
$~3 & 4.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 4850/2015 and CM APPL. 8750/2015
YOGESH CHANDRA JHALANI ..... Petitioner
Through: Mr. Anil Sapra, Senior Advocate with
Mr. Aman Vachher, Mr. Ashutosh Dubey,
Mr. Kartik Bhardwaj and Ms. Piyusha Singh,
Advocates
versus
INDUSTRIAL FINANCE CORPORATION OF INDIA & ORS
..... Respondents
Through: Mr. R.P. Agarwal, Mr. Sahil and
Ms. Shibani, Advocates for R-1/IFCI.
Mr. Sugam Seth and Ms. Yamini Khurana,
Advocates for R-3/IDBI.
Mr. Ramesh Kumar, Advocate for R-4.
+ W.P.(C) 11435/2015 and CM APPL. 30146/2015
PRAKASH CHANDRA JHALANI AND ORS ..... Petitioners
Through: Mr. Anil Sapra, Senior Advocate with
Mr. Aman Vachher, Mr. Ashutosh Dubey,
Mr. Kartik Bhardwaj and Ms. Piyusha Singh,
Advocates
versus
INDUSTRIAL FINANCE CORPORATION OF INDIA AND ORS
..... Respondents
Through: Mr. R.P. Agarwal, Mr. Sahil and
Ms. Shibani, Advocates for R-1/IFCI.
Mr. Sugam Seth and Ms. Yamini Khurana,
Advocates for R-3/IDBI.
Mr. Ramesh Kumar, Advocate for R-4.
W.P.(C) 4850/2015 and 11435/2015 Page 1 of 8
CORAM:
HON'BLE MS. JUSTICE HIMA KOHLI
HON'BLE MS. JUSTICE SANGITA DHINGRA SEHGAL
ORDER
% 23.05.2017
1. This order is in continuation of the order dated 18.05.2017, on which
date, after briefly referring to the facts of the case, in view of the submission
made by Mr. Anil Sapra, learned Senior Advocate appearing for the
petitioners in W.P.(C) 11435/2015 had urged that while passing the
impugned order dated 10.02.2015, the learned DRAT had fallen into an
error by arriving at the conclusion that the High Court in Company Petition
No.539/1998 and Company Appeal No.39/2011 had held that there was no
One Time Settlement. He had also drawn our attention to the order dated
05.04.2016 passed in W.P.(C) No. 7259/2015 by a Co-ordinate Bench of
which one of us (Hima Kohli, J.) was a member, wherein the aforesaid
aspect had come up for consideration and been clarified.
2. Having regard to the fact reliance was placed by learned counsel for
the petitioners on the orders passed in W.P.(C) 7259/2015, a petition filed by
one of the guarantors of the loans extended by Canara Bank, (one of the
consortium Banks) to the respondent No.2 herein, M/s Jhalani Tools (India)
Ltd., it was deemed appropriate to summon the file of the said case. The
said file has been placed before us today and we have perused the order
dated 05.04.2016, which is reproduced hereinbelow for ready reference:-
"1. The petitioner has filed the present petition assailing the
order dated 9th February, 2015, passed by the Debts Recovery
Appellate Tribunal (hereinafter referred to DRAT) in Misc.
Appeal No.471/2010 in S.A. No.24 of 2009 (Delhi-II) allowing
the appeal filed by the Asset Reconstruction Company (India)
Limited (hereinafter referred to as ARCIL) against the order
dated 9 th November, 2010, passed by the Debts Recovery
Tribunal (hereinafter referred to as DRT), whereunder it was
held that the One Time Settlement (hereinafter referred to as
OTS) offered by the Principal Debtor is pending and binding on
the parties.
2. Aggrieved by the aforesaid finding returned by the DRT,
ARCIL had stated in the appeal preferred before the DRAT that
the DRT cannot go against the findings recorded by the High
Court in Company Petition No.539/1998, particularly the
orders dated 24th & 25th May, 2011 and the revival scheme of
the Principal Debtor was primarily sought on the ground that
there was an OTS proposal with the lead Bank i.e. Dena Bank
and all the other banks, which had been accepted and the
monies realized by the Official Liquidator would be sufficient to
discharge the liabilities in terms of the said OTS. The said
submission was however opposed by learned counsel for the
petitioner (respondent before the DRAT) on the ground that a
substantial amount has already been paid to the Banks by the
Official Liquidator from the amount that had been realized
from the sale of the properties.
3. In the course of the passing the impugned order and
remitting the matter back to the DRT, it was noted by the DRAT
that the High Court had clearly ruled that there was no OTS
which fact is denied by the petitioner. Mr. Sapra, learned
Senior advocate appearing for the petitioner points out that it
has been wrongly observed by the DRAT that once the OTS has
been rejected or has not come through, the findings returned by
the DRT on that basis would be difficult to sustain. He argues
that the OTS had not been rejected by the Company Judge
while passing the orders dated 24th & 25th May, 2011 or for
that matter, by the Division Bench while passing the order
dated 21st August, 2012 in Company Appeal No.39/2011. He
states that by making such an observation, the DRAT has closed
the doors in so far as the reworking of the OTS is concerned
and therefore, simply remanding the matter back to the DRT for
a fresh consideration, would be a useless exercise.
4. Mr. Singh, learned counsel for the respondent No.1-Bank,
submits that while passing the order dated 24th May, 2011, the
Company Judge had recorded that the lead Bank i.e. Dena
Bank had clarified that it opposes the OTS offered by the
Principal Debtor and taking into consideration the said
submission, it had opined that the revival and rehabilitation
scheme filed by the Principal Debtor was untenable for the lead
Bank and other banks and therefore, unworkable.
5. Learned counsel for the respondent No.1 draws our attention
to paragraph No.9 of the order dated 21st August, 2012, passed
by the Division Bench to submit that it was observed that they
need no go into the question as to whether the Banks were
bound by the settlement offered by the Principal Debtor for the
simple reason that the monies realized from the sale of the
assets of the Company in liquidation were insufficient for the
OTS proposal. He submits that it was for the said reason that
the Company Appeal preferred by the Principal Debtor was
rejected. Paragraph No.9 of the order dated 21st August, 2012
is relevant and reproduced below for ready reference: -
"9. In the aforesaid state of affairs, we need not to go
into the question as to whether the Banks are bound or
not by their settlement offer inasmuch as the monies
realized from the sale till now of assets of the Company
in Liquidation are not sufficient for the Scheme proposed.
We accordingly dismiss Company Appeal No.39/2011."
6. Having perused the orders dated 24th May, 2011 and 25th
May, 2011, passed by the Company Judge in Company
Petition No.539/1998 and the tone and tenor of the order
dated 21st August, 2012 passed by the Division Bench in
Company Appeal No.39/2011, we are of the opinion that the
observations made by the DRAT to the effect that the High
Court had clearly ruled that there was no OTS, cannot be
sustained. It is quite evident from a perusal of the
aforementioned orders that though an OTS was under the
consideration of the lead Bank and the other Banks, they had
finally rejected the same and vide order dated 21st August,
2012, the Division Bench had declined to go into the question
of the binding effect of the OTS only for the reason that there
were insufficient monies realized from the sale of the
properties of the Principal Debtor so as to satisfy the
rehabilitation scheme.
7. Learned Senior counsel for the petitioner submits that as on
date, there are sufficient funds available with the Official
Liquidator for the Banks to rework the already suggested OTS.
8. The petitioner shall be at liberty to make the said submission
before the DRT, which shall be duly considered on merits in
accordance with law, after getting a response from the
respondent-Banks.
9. Having regard to the vintage of the litigation, it is deemed
appropriate to request the DRT to expedite the hearing in the
case and decide the same preferably within a period of eight
weeks from the date of conclusion of arguments. Neither side be
accommodated for any unnecessary adjournments.
10. The present petition is disposed of." (emphasis added)
3. Mr.Sapra, learned Senior Advocate appearing for the petitioners states
that the order dated 09.02.2015 passed by the DRAT, that was subject matter
of consideration in W.P.(C) 7259/2015, finds mention in the impugned order
dated 10.02.2015, wherein a similar conclusion was arrived at by the DRAT
that the learned Single Judge of the High Court in Company Petition
No.539/1998, had clearly ruled that there was no One Time Settlement and
the same view was expressed the Division Bench in the order dated
21.08.2012, passed in Company Appeal No.39/2011.
4. It was noted in the aforesaid order dated 05.04.2016, passed in the
captioned petition that the observation of the learned DRAT that the High
Court had clearly ruled that there was no One Time Settlement, could not be
sustained and a perusal of the orders dated 24.05.2011 and 25.05.2011
passed by the Company Judge in Company Petition No.539/1998 and the
order dated 21.08.2012 passed by the Division Bench in Company Appeal
No.39/2011, was unsustainable.
5. Taking note of the submission made by the counsel for the petitioners
in the captioned case to the effect that as on date, there are sufficient funds
available with the Official Liquidator of the Bank for the Banks to re-work
the already suggested One Time Settlement and without commenting on the
merits of the said submission, it was directed that the petitioners therein
shall be at liberty to state so before the DRT and the said submission shall be
duly considered on merits in accordance with law, after obtaining a
response from the respondents/Banks.
6. We propose to reiterate the same observations in the present petitions
as well. While holding that the orders dated 24.05.2011 and 25.05.2011
passed by the Company Judge in Company Petition No.539/1998 and the
order dated 21.08.2012 passed by the Division Bench in Company Appeal
No.39/2011 did not rule that there was no One Time Settlement, the present
petitions are disposed of by reviving the amendment application filed by the
petitioners and granting them liberty to take such a plea before the learned
DRAT. Similarly, the respondents/Banks shall also be at liberty to take all
the pleas that they had taken before the learned Company Judge as also
before the learned DRAT to urge that the contention of the petitioners that
the conduct of the respondents/Bank demonstrates that they had accepted the
One Time Settlement, is erroneous.
7. After taking into consideration the arguments advanced by both sides,
the learned DRAT is requested to pass a fresh order on the amendment
application filed by the petitioner, in accordance with law. As there is no
date fixed before the learned DRAT as of now, the parties are directed to
appear before the said forum on 18.07.2017, for fixing a date for hearing
arguments on the amendment application filed by the petitioner, as per its
convenience.
8. We are informed that the respondents/Banks did not have an
opportunity to file replies to the amendment application as the learned
DRAT had opined that the said application had been filed by the petitioners
as a dilatory tactics. Having regard to the fact that the application has been
revived for seeking fresh adjudication by the learned DRAT, the
respondents/Banks are permitted to file their replies in opposition to the said
application within four weeks from today with copies to the counsel for the
petitioner, who may file rejoinders well before the date fixed before the
DRAT.
9. The petitions are disposed of alongwith the pending applications. The
parties are left to bear their own expenses.
HIMA KOHLI, J
SANGITA DHINGRA SEHGAL, J
MAY 23, 2017
rkb/ap
