RAMESH RANGANATHAN,J. - (1.) M/s. Deccan Chronicle Holdings Limited (the petitioner herein) has invoked the jurisdiction of this Court seeking a writ of mandamus to declare the action taken by IL&FS Trust Company Limited (the first respondent) in issuing notice dated 15.07.2013, the subsequent possession notice dated 08.11.2013, and in contemplating taking physical possession under the orders in the Criminal M.Ps pending before the Chief Metropolitan Magistrates, Hyderabad and Vijayawada as illegal and arbitrary; to declare that the first respondent is not entitled to invoke the provisions of the SARFAESI Act; to declare the action taken by the first respondent under the SARFAESI Act, with respect to the assets of the petitioner -Company, as null and void; and to consequently direct the first respondent to restore symbolic possession of the properties of the petitioner taken over by it under the SARFAESI Act. The petitioner publishes daily newspapers both in English and Telugu under the name and style of Deccan Chronicle English daily, and Andhra Bhoomi Telugu daily. The first respondent filed a petition before the Chief Metropolitan Magistrate, Hyderabad seeking assistance in taking physical possession of the properties situated at Hyderabad. Likewise, they filed a petition before the Chief Metropolitan Magistrate, Vijayawada seeking assistance in taking physical possession of the properties of the petitioner in Krishna District.
(2.) Earlier the first respondent issued legal notice dated 09.04.2013 informing that they were acting as a debenture trustee for the debentures issued by the petitioner as referred to in the notice; they were acting as a debenture trustee for the benefit of the debenture holders/secured parties in terms of the debenture trust agreements dated 08.08.2005, 24.10.2005, 19.04.2008 and 31.12.2008; the petitioner had executed various documents, with respect to these debenture issues, including debenture trust agreements, debenture trust deeds, and other security and transaction documents for securing these debentures; the petitioner had created a charge, in favour of the first respondent, by way of mortgage and hypothecation of its moveable and immovable properties as detailed in the notice; the petitioner had also executed security documents in favour of the first respondent; the charges, so created by the petitioner in favour of the first respondent, were duly registered with the Registrar of Companies; the petitioner was in default in payment of interest, and repayment of amounts towards the Non -Convertible Debentures (NCDs) issued by them; as per Clause 19, of the Listing of Debt Securities Regulations issued by SEBI, the petitioner was required to inform the stock exchanges with regards non -payment of interest and principal for the listed issues, prior to occurrence of default, and if default was not rectified within three months from such default; the first respondent had called upon the petitioner to furnish details/information/documents, and to give confirmation in respect of payment of interest and redemption amounts due from time to time to the debenture holders, and whether the petitioner would be servicing interest payments on the next due dates with respect to the NCD issues; there was no proper response from them; the petitioner was requested to make necessary arrangement and rectify the default; the amounts due to the debenture holders viz., Life Insurance Corporation of India (LIC for short), Canara Bank (CB for short) and Oriental Bank of Commerce (OBC for short), towards interest and/or repayment under four debenture issues, along with the interest and penal interest as applicable, had not been paid by the petitioner, and was still outstanding; they were recalling the entire outstanding debenture payments along with interest and penal interest and liquidated damages, as may be applicable, as per the transaction documents; and the petitioner was called upon to make payment of the entire principal outstanding amounts, along with interest, further interest, penal interest and liquidated damages thereon, under all the four debenture issues within 15 days, failing which they would initiate appropriate legal proceedings.
(3.) Thereafter the first respondent issued a notice, under Section 13(2) of the SARFAESI Act, on 15.07.2013 informing the petitioner that the amounts due to the debenture holders had not been paid, and was still outstanding; and if they failed to repay the debenture holders the outstanding amount, as stated in terms of the notice, action would be taken under Section 13(4) and other applicable provisions of the Act. The petitioner was informed that they were being put on notice, in terms of Section 13(13) of the SARFAESI Act, that they should not transfer, by way of sale, lease or otherwise, any of the secured assets, referred to in the notice, without obtaining their prior written consent. These notices were issued by the 1st respondent as the debenture trustee of the three debenture holders viz., LIC, CB and OBC.;