A.K.SIKRI,J. - (1.) This appeal preferred by Indiabulls Housing Finance Limited, in which the main contesting parties are M/s. Deccan Chronicle Holdings Limited and its Directors (other respondents are the proforma parties), questions the correctness and legality of the judgment and order dated February 04, 2014 passed by the High Court of Judicature of Andhra Pradesh at Hyderabad. The impugned judgment is passed by the High Court in the writ petition which was filed by the contesting respondents questioning the validity of actions taken by the appellant against the contesting respondents under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (hereinafter referred to as the ' SARFAESI Act ') for recovery of the loan amounts, along with interest, which are payable by the contesting respondents to the appellant.
(2.) The High Court has accepted the challenge laid by the contesting respondents holding that: (a) loan agreements contained arbitration clauses which were invoked by the appellant with the filing of cases under Section 9 of the Arbitration and Conciliation Act , 1996. In view thereof, initiation of any other proceedings under the SARFAESI Act are impermissible in law; and (b) the loan was initially given by M/s. Indiabulls Financial Services Limited (for short, 'IBFSL') on December 08, 2011 and January 05, 2012 in the sum of Rs.50 crores each. IBFSL was not a banking company or financial institution within the meaning of Section 2(d) and (m) of the SARFAESI Act and, therefore, it had no jurisdiction to take any steps by invoking the provisions of this Act. However, IBFSL got merged with the appellant company. No doubt, the appellant is a financial institution under the SARFAESI Act . However, since IBFSL had no right to initiate any action under the said Act, as a successor-in-interest, the appellant steps into the shoes of IBFSL and, therefore, it also cannot initiate any action under the SARFAESI Act . If that is allowed, held the High Court, substantive rights of the contesting respondents which accrued to them under Sections 69 and 69A of the Transfer of Property Act, 1882 would be adversely affected, which cannot be countenanced.
(3.) Having given the glimpse of the transaction which was entered into between the parties and also that of the basis of the impugned judgment of the High Court, we proceed to discuss the details on which the lis is founded.;