- (1.) M/s Euro Cotspin Limited (for short 'ECL') had availed of financial assistance from various banks but failed to honour its commitment.
(2.) In an endeavour towards realizing its dues, Punjab National Bank (for short 'PNB') was authorized by the other secured creditors to sell the assets of ECL under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act'). The dues are stated to be amounting to approximately Rs. 165 crores. M/s A.V. Cotex Limited (for short 'AVC') agreed to purchase the assets for a total consideration of Rs. 29 crores.
(3.) A communication dated13.6.2006 was thus issued by the PNB to ECL conveying its acceptance for the request for sale of assets through a private sale for a sum of Rs.29 crores to M/s AVC on the terms and conditions set out in the said letter. One of the terms and conditions was as under:- "M/s AVCL will settle all other statutory liabilities and other dues of the company i.e M/s Euro Cotspin Ltd. at their own.";