Decided on February 04,2014

M/S Deccan Chronicles Holdings Limited Appellant
UNION OF INDIA Respondents


L.NARASIMHA REDDY, J. - (1.) THIS writ petition raises several questions of general importance, that arise in the course of implementation of different enactments, such as Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Sarfaesi Act"), the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act"), and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the D.R.T. Act").
(2.) THE 1st petitioner is a public limited company, involved in the activity of running newspapers and petitioners 2 to 5 are associated with the management and administration thereof. The petitioners obtained two separate loans: One loan of Rs.50 crores on 08 -12 -2011, and another of Rs.50 crores on 05 -01 -2012 from M/s India Bulls Financial Services Limited (for short "IBFSL"), after necessary documentation. On 08 -09 -2012, IBFSL issued a notice to the petitioners, requiring them to pay the outstanding amount within seven days from the date of receipt of the notice. The petitioners got issued a reply. Thereafter, IBFSL filed O.P.No.377 of 2013 against the petitioners in the Court of II Additional Chief Judge, City Civil Court, Hyderabad, under Section 9 of the Arbitration Act, for the relief of injunction, to restrain the petitioners from alienating, encumbering, transferring or creating third party rights, vis - -vis the properties that were offered as security and for a direction to the petitioners to jointly and severally furnish security for a sum of Rs.48,60,77,778/ -. Similarly O.P.No.378 of 2013 was filed for similar relief in relation to another loan. Clause 25 of the Loan Agreement, which provides for arbitration was invoked in both the OPs. According to the petitioners, about 10 crores was paid towards principal of the borrowed amount by June 2012. IBFSL was merged with its sister concern, M/s India Bulls Housing Finance Limited, the 4th respondent, on the basis of an order dated 12 -12 -2012 in Company Petition No.457 of 2012, passed by the Delhi High Court under the provisions of the Companies Act, 1956. The merger is said to have been effective from 08 -03 -2013.
(3.) THE 4th respondent got itself registered under the Sarfaesi Act. Soon after the merger of IBFSL with it, the 4th respondent initiated proceedings under the Sarfaesi Act against the petitioners in respect of the loans, that were borrowed from IBFSL. Possession notice dated 29 -05 -2013 was also issued. The physical possession of the properties is said to have been taken on 02 -08 - 2013. It is also stated that the 4th respondent has sold away 50% of the shareholding of the 1st petitioner -company and put to sale, an item of property. The 4th respondent got issued a notice dated 21 -11 -2013, to the petitioners proposing to sell two items of immovable property at Hyderabad. It is in this context, that the present writ petition is filed.;

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