- (1.) By this application stay is sought of C.P. No. 241 of 2009 along with C.A. No. 667 of 2012. This order is sought in view of a reference filed before the BIFR and registered as BIFR Case No. 65 of 2013 by order dated September 12, 2013. The said application is opposed by the Dena Bank, PICUP, IFCI and SASF (IDBI) and Corporation Bank. While Dena Bank issued notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, on April 1, 2006, it got a decree on February 14, 2008. The proceedings were initiated prior to the 2002 Act by the Dena Bank and without taking recourse to recovery of sums through the Recovery Officer, C.P. No. 241 of 2009 was filed in which an order of winding up has been passed pursuant whereof the official liquidator has taken possession of the assets and properties of the company (in liquidation) and has put up the said assets for sale. It has been contended on behalf of the applicant that section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1985 Act) permits filing of a reference and the third proviso operates as a bar to filing a reference only in the event the secured creditors have taken any measures to recover the secured debt under section 13(4) of the 2002 Act. Such secured creditors must represent not less than three-fourths in value of the amount outstanding. In the instant case, the secured creditors representing three-fourths in value of the amount outstanding have taken no steps to recover their secured debt under section 13(4) of the 2002 Act nor have they agreed amongst themselves to exercise of such rights amongst them. Such action if taken is to be binding on all the secured creditors. Therefore, the reference made under section 15 of the 1985 Act is valid, in view of the decision reported in Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd., 2000 5 SCC 515. Therefore orders be passed as sought. The said application is opposed by the Dena Bank, on whose behalf it has been contended that before the BIFR there has been suppression of material facts. The first material fact that has been suppressed relates to the order of the winding up, which has not been mentioned in the application filed before the Board under the 1985 Act. The second suppression is that the appeal court was not taken into confidence regarding the filing of the reference before the BIFR on August 16, 2013, although the reference was filed in July 2013. Section 13(2) notice has been given in May, 2006 and decree passed in 2008. The Dena Bank as secured creditor was entitled to make recovery of its dues and the winding up petition was justified and the proceedings thereunder, therefore, be continued. In view of the aforesaid, the application filed be dismissed. The decision relied on by the applicant is distinguishable on facts as the reference therein was filed when the winding up order was stayed by the appeal court. During the subsistence of the stay order the board of directors were entitled to file the reference. Such is not the case here. Therefore, this application merits no order.
(2.) On behalf of IFCI and SASF (TDBI), it has been submitted that section 15 of the 1985 Act postulates filing of a reference by the board of directors of the company, which the board of directors on the passing of a winding up order in view of sections 447 and 445(3) of the 1956 Act loses its existence. Therefore, no reference could have been filed before the BIFR. There is also suppression of material facts and in fact, the person who has affirmed the application is not authorised and can have no authority to represent the last board of director, in view of the judgment reported in K. SP. V. Shanmugam v. Maharashtra State Co-operative Cotton Growers Marketing Federation Ltd., 1991 70 CompCas 38. Therefore, this application merits no order and the same be dismissed.
(3.) On behalf of PICUP it has been submitted that no steps have been taken by it to recover its dues.;