Sanjay Kishan Kaul, J. - (1.) M /s. Euro Cotspin Limited (for short 'ECL') had availed of financial assistance from various banks but failed to honour its commitment. 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.
(2.) M /s. A.V. Cotex Limited (for short 'AVC') agreed to purchase the assets for a total consideration of Rs. 29 crores. A communication dated 13.6.2006 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." M/s. AVCL, in turn, as per authorization with it under the letter dated 13.6.2006 nominated M/s. T.C. Spinners Private Limited (petitioner) as its nominee in terms of an agreement dated 25.9.2006. The recitals of this agreement stated that the sale of the assets was for a sum of Rs. 29 crores as per terms and conditions enumerated in the letter dated 13.6.2006 which was annexed as Annexure -A to the agreement and made part of the agreement. This agreement, however, contains clause 15 as under: - "15) Second party will not be liable for any of the civil or criminal liabilities of the First party or ECL and there will be no liability towards the pending cases of the ECL or First party running in various courts."
(3.) THE aforesaid arrangement was crystalized through a Tripartite Agreement dated 24.3.2007 between the petitioner, ECL/its guarantors and PNB. This Tripartite agreement, however, does not mention the aspect of the liability of the petitioner to any third party and the sale has been made on 'AS IS WHERE IS BASIS'. The relevant clause 9 is as under: - "That the party of the Third Part will sell the secured assets of the M/s. Euro Cotspin Ltd. To the party of the First Part on "AS IS WHERE IS BASIS" and party of the First Part undertaken to settle all statutory liabilities (specified or unspecified) of M/s. Euro Cotspin Ltd. As their own. The party of the First Part also undertakes to pay settle all claims arising again the party of the Third Part arising out of liabilities of M/s. Euro Cotspin Ltd. And First part shall not claim any amount from party of third part in respect of any dues that the first part may have to pay to any third party arising out of liabilities of M/s. Euro Cotspin Ltd.";