IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF AUGUST, 2019 :PRESENT:
THE HON’BLE MR. JUSTICE L.NARAYANA SWAMY AND THE HON’BLE MR. JUSTICE R.DEVDAS WRIT PETITION NO.17217/2011 (GM-DRT) C/W WRIT PETITION NO.28780/2011 (GM-DRT) IN W.P.NO.17217/2011 BETWEEN M/S BELLARY STEELS AND ALLOYS LTD NO 201, 7TH CROSS, 2ND STAGE INDIRANAGAR, BANGALORE-560038 REPRESENTED BY ITS MANAGING DIRECTOR SRI S MADHAV S/O NAGAPPA AGE 61 YEARS.
(BY SRI ADITYA SONDHI, SENIOR COUNSEL A/W MISS IRFANA NAZEER, ADVOCATE) ... PETITIONER AND M/S INDUSTRIAL FINANCE CORPORATION OF INDIA LIMITED IFCI TOWER, NO 61 NEHRU PLACE NEW DELHI 110 009 REP BY ITS MANAGER (LAW).
... RESPONDENT (BY SRI S S NAGANAND, SENIOR COUNSEL FOR SRI S SRIRANGA, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR ALL DOCUMENTS PERTAINING TO R.A.(S.A.) NO.99/2010 ON THE FILE OF DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI AND AFTER PERUSAL OF THE SAME BE PLEASED TO QUASH AND SET ASIDE THE ORDER DATED 29.11.2010 PASSED BY THE LEARNED DEBT RECOVERY APPELLATE TRIBUNAL IN R.A.(S.A.) NO.99/2010 VIDE ANNEXURE-E AND ETC.
IN W.P. NO.28780/2011 BETWEEN M/S BELLARY STEEL & ALLOYS LIMITED REGD. UNDER THE COMPANIES ACT, 1956 HAVING ITS OFFICE AT SRI. LAKSHMI 4000, HAL 2ND STAGE, 110 FT. ROAD, INDIRA NAGAR, BANGALORE 560008 REP. BY ITS MANAGING DIRECTOR SRI. S. MADHAV.
(BY SRI ADITYA SONDHI, SENIOR COUNSEL A/W MISS IRFANA NAZEER, ADVOCATE) ... PETITIONER AND 1. APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION, NEW DELHI, REP. BY ITS CHAIRMAN.
[DELETED AS PER ORDER DT. 15/11/2011] 2. THE SECRETARY, INDUSTRIES DEPT. GOVERNMENT OF KARNATAKA, VIDHAN SOUDHA, BANGALORE 560001.
3. THE CHAIRMAN AND MD STATE BANK OF INDIA, CENTRAL OFFICE NPA MANAGEMENT, MADAM CAME ROAD, MUMBAI.
4. THE CHAIRMAN AND MD STATE BANK OF TRAVANCORE, INDL. REHAB, CELL, HEAD OFFICE, THIRUVANATHAPURAM-695001.
5. THE CHAIRMAN & MD CENTRAL BANK OF INDIA, BIFR CELL, 4TH FLOOR, CHANDERMUKHI BLDG, NARIMAN POINT, MUMBAI 400021.
6. THE CHAIRMAN & MD DENA BANK, DENA CORPORATE CENTRE, C-10, G-BLOCK, BANDRA KURLA COMPLEX, BANDRA (EAST) MUMBAI 400051.
7. THE CHAIRMAN & MD, INDIAN BANK, 31, RAJAJI SALAI, CHENNAI-600001 8. THE CHAIRMAN AND MD BANK OF MAHARASTRA, LOK MANGAL, 1501, SHIVAJI NAGAR, PUNE-411005 9. THE CHAIRMAN AND MD ASSET RECONSTRUCTION COMPANY (INDIA) LTD.
17TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI-400021 [DELETED AS PER ORDER DT. 22/5/2012] 10. THE CHAIRMAN AND MD CANARA BANK (BIFR ACCOUNTS SECTION) CREDIT WING 112, J.C. ROAD, BANGALORE 560002.
11. THE GENERAL MANAGER, EXIM BANK, 21ST FLOOR, CENTRE-1, WORLD TRADE CENTRE CUFFEE PRADE, MUMBAI.
12. THE GENERAL MANAGER, COAL INDIA LTD. MARKETING DIVISION, 15 PARK STREET, 6TH FLOOR, APEEJAY HOUSE, KOLKATA-16.
13. THE CHIEF SECRETARY GOVT. OF KARNATAKA, SECRETARIAT, BANGALORE.
14. RESIDENT COMMISSIONER, GOVT. OF KARNATAKA, KAUTILYA MARG, CHANAKYA PURI, NEW DELHI.
15. SOUTH INDIAN BANK LTD. TRICHUR-628001, KERALA.
16. DHANALAKSHMI BANK LTD, THE ROUND, TRICHUR-680001, KERALA.
17. THE CHAIRMAN AND MD INDIAN OVERSEAS BANK, INDUSTRIAL ADVISORY & REHAB, DEPT. CENTRAL OFFICE, 763, ANNA SALAI, CHENNAI-600002.
18. HDFC BANK LTD.
TIMES TOWER, MEZZANINE FLOOR, KAMAL MILLS COMPOUND, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400013.
[DELETED AS PER ORDER DT: 14/12/2011] 19. DEVELOPMENT CREDIT BANK LTD. DEEP APARTMENTS, GROUND FLOOR, NEAR AAMIR COMPLEX, CHAR RASTA, GIDC, VAPI -396195 (GUJARAT).
20. THE CHAIRMAN AND MD IDBI, IDBI TOWER, CUFFEE PARADE, MUMBAI.
21. THE CHAIRMAN AND MD IFCI, IFCI TOWERS, 61, NEHRU PLACE, NEW DELHI -110019.
22. THE CHAIRMAN AND MD, ICICI BANK LTD., ICIC TOWER, BANDRA KURLA COMPLEX, MUMBAI-400051.
23. THE CHAIRMAN AND MD IIBI, 19 NETAJI SUBHASH ROAD, KOLKATA-700001.
24. THE CHAIRMAN AND MD KARNATAKA STATE FINANCIAL CORPORATION, NO.1/1, THIMMAIAH ROAD, BANGALORE-560052.
25. THE REGIONAL DIRECTOR ESI CORPORATION, RAJENDRA PLACE, NEW DELHI 110008.
26. THE COMMISSIONER, THE CENTRAL PROVIDENT FUND, HUDCO VISHALA, 14, BHIKAJI CAMA PLACE, NEW DELHI -110066.
27. KARNATAKA POWER CORPORATION LTD. BOARD SECRETARIAT CAUVERY BHAWAN, BANGALORE 560009.
[DELETED AS PER ORDER DT. 14/12/2011] 28. DPT. OF INCOME TAX (RECOVERY) MAYUR BHAWAN, CONNAUGHT PLACE, NEW DELHI 110001.
29. M/S ASSET RECONSTRUCTION CO. (INDIA) LTD. (ARCIL) SHREEPATI ARCADE NANA CHOWK, AUGUST KRANTI MARG, MUMBAI 400036.
30. CHIEF GENERAL MANAGER, STRESSED ASSETS STABLISATION FUND, 10TH FLOOR, WTC COMPLEX, IDBI TOWER, CUFFEE PARADE, MUMBAI 400036.
31. THE DY. COMMISSIONER OF CUSTOMS, APPG, DOCKS 2ND FLOOR, CENTRAL DOCUMENTATION COMPLEX, RAJAJI SALAI, CHENNAI 600001.
32. THE GENERAL MANAGER SICAL CWT DISTRIPARKS LTD.
NO.32 (OLD 47), 2ND AND 3RD FLOOR, RAJAJI SALAI, CHENNAI 600021.
33. THE SHIPPING CORPORATION OF INDIA LTD. SHIPPING HOUSE, 245 MADAM CAMA ROAD, MUMBAI 400021.
34. THE REGISTRAR OF COMPANIES, (ROC), 2ND FLOOR, E WING, KENDIRYA SADAN KORAMANGALA, BANGLAORE 560034.
35. SR. DIVISIONAL ENGINEER (CO-ORD) DIVL. RLY. MANAGER(WORKS) S. C. RAILWAY, GUNTAKAL 515801.
36. THE CHAIRMAN AND MD KARNATAKA STATE INDUSTRIAL INVESTMENT & DEVELOPMENT CORPORATION LTD. (KSIIDC), KHANIJA BHAWAN, RACE COURSE ROAD, BANGALORE 560001.
37. THE DEPUTY COMMISSIONER CUSTOMS AND CENTRAL EXCISE GSM ROAD, GANDHI NAGAR, BELLARY DIV.
BELLARY-3, KARNATAKA.
38. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE.
39. THE DIRECTOR (D WING) MINISTRY OF STEEL UDYOG BHAWAN, NEW DELHI 110011.
40. THE SECRETARY MINISTRY OF COAL, SHASTRI BHAWAN, NEW DELHI 110011.
41. SHRI. C.N. B NAIR, SPECIAL DIRECTOR, 141, HIMVARSHA PLOT NO. 103, IP EXTENSION DELHI 110092.
42. THE CHAIRMAN AND MD ING VYASYA BANK LTD.
22, M.G. ROAD, BANGALORE.
43. THE CHIEF GENERAL MANAGER, STRESSED ASSETS STABILISATION FUNDS (SASF) IDBI TOWER, 10TH FLOOR, WTC COMPLEX, MUMBAI 400005.
44. THE CHAIRMAN AND MD BANK OF INDIA, EXPRESS TOWER, NARIMAN POINT, MUMBAI 400021.
[DELETED AS PER ORDER DT. 14/12/2011] 45. CHIEF ELECTRICAL INSPECTOR, BANGALORE, KARNATAKA.
46. COMMERCIAL TAX OFFICER, CHENNAI, TAMILNADU.
[DELETED AS PER ORDER DT. 14/12/2011] 47. M/S MANTAKRAF(I) PVT. LTD. NO.94/3, TTK ROAD, ALWARPET, CHENNAI 600018.
48. COMMERCIAL TAX OFFICER, BELLARY, KARNATAKA.
49. DALMIA CEMENT (BHARAT) LTD, 11TH & 12TH FLOOR, HANSALAYA 15, BARAKHAMBA ROAD, NEW DELHI 110001.
50. SINGARENI COLLERIES CO. LTD, KOTHAGUDAM, ANDHRA PRADESH [DELETED AS PER ORDER DT.14/12/2011] 51. THE CHAIRMAN AND MD INSUSIND BANK LTD, INDUSIND HOUSE, 425, DASASAHEEB, BHADKAMKAR ROAD, MUMBAI 400004.
52. CHAIRMAN AND MD ING VYASYA BANK LTD.
72, ST. MARKS ROAD, BANGALORE 560001.
53. M/S PRIDHVI ASSET RECONSTRUCTION AND SECURITISATION CO.LTD (PARSCL) 123/3 RT, 1ST FLOOR SANJEEVA REDDY NAGAR HYDERABAD 500082.
54. THE WORKMEN OF BELLARY STEELS AND ALLOYS LTD., REP. BY KARNATAKA UNITED GENERAL WORKERS, UNION [AFFILIATED TO UTUC] NO.208, R.K. COMPLEX, K C ROAD BELLARY – 583 101, REPRESENTED BY ITS SECRETARY [IMPLEADED AS PER ORDER DT. 24/01/2013] …..RESPONDENTS (BY SRI LAKSHMI NARAYANA, AGA FOR R2, R13, R48 SRI RAMESH BABU, ADVOCATE FOR R5 SRI T P MUTHANNA, ADVOCATE FOR R6 SRI A KESHAVA BHAT, ADVOCATE FOR R7 SRI B C SEETHARAMA RAO, ADVOCATE FOR R8 SRI T I ABDULLA, ADVOCATE FOR R12 SRI NAGARAJ DAMODAR, ADVOCATE FOR R20 SRI S S NAGANAND, SENIOR COUNSEL FOR SRI S SRIRANGA, ADVOCATE FOR C/R21 SRI FRANCIS XAVIER, ADVOCATE FOR R22 SRI BIPIN HEGDE, ADVOCATE FOR R24 SRI HARIKRISHNA S HOLLA, ADVOCATE FOR R26 SRI K V ARAVIND, ADVOCATE FOR R28 & R38 SRI C SHASHIKANTHA, CGC FOR R31 SRI VINAY GIRI V, ADVOCATE FOR R33 SRI V HARIDAS BHAT, ADVOCATE FOR R10 SMT ANUPAMA HEGDE, CGC FOR R34 SRI N S SANJAY GOWDA, ADVOCATE FOR R35 SRI ANANADARAMA, ADVOCATE FOR R36 SRI S R DODAWAD, CGC FOR R39 & R40 SRI SUSHANTH VENKATESH PAI, ADVOCATE FOR R47 SRI SUPREETH S, ADVOCATE FOR R53 SRI V S NAIK, ADVOCATE FOR R54 R1 IS STRUCK OFF V/O DATED 15/11/2011 R18, R27, R44, R46 & R50 ARE STRUCK OFF V/O DATED 14/12/2011 R9 & R29 ARE STRUCK OFF V/O DATED 22/05/2012 R3, R4, R11, R14 TO R16, R17, R19, R23, R25, R30, R32, R37, R41, R42, R43, R45, R48, R49, R51 & R52 ARE SERVED AND UNREPRESENTED) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE DOCUMENTS PERTAINING TO THE ORDER DATED 23.6.2011 VIDE ANNEXURE-Q, PASSED BY THE APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION, NEW DELHI THE 1ST RESPONDENT HEREIN PASSED IN APPEAL NO.27 OF 2010 DISMISSING THE APPEAL FILED BY THE PETITIONER COMPANY AND UPON A PERUSAL OF THE SAME BE PLEASED TO QUASH AND ETC.
THESE WRIT PETITIONS HAVING BEEN HEARD AND RESERVED ON 02.07.2019 AND COMING ON FOR PRONOUNCEMENT OF ORDERS, THIS DAY DEVDAS J, MADE THE FOLLOWING:
COMMON ORDER The petitioner is a Company registered under the provisions of the Indian Companies Act, 1956, carrying on business of manufacturing steels and alloy in its plants situated at Ballari. The Company has two divisions. One sponge iron plant at No.10/11, Ananthapur Road, Ballari and two integrated steel plant projects, under implementation, on land measuring 700 acres, in Ballari. The company made a reference before the BIFR under Section 13(1) of the Sick Industrial Company (Special Provisions) Act, 1985 (for short ‘SICA’), seeking formulation of a scheme under the Act for rehabilitation and reconstruction of the company. The company was declared as a sick unit pursuant to the order passed by BIFR, on 07.12.2006. Even as the matter was pending before BIFR, various creditors, including the respondent in W.P.No.17217/2011, M/s Industrial Financial Corporation of India Limited (for short ‘IFCI’) filed winding up petitions before the Company Court. By order dated 14.12.2007, the winding up petitions and connected matters were dismissed with liberty to revive the company petitions, if the company comes out of BIFR.
2. Subsequently, by order dated 05.01.2010, the BIFR, on a Miscellaneous Application filed by one of the creditors AIRCL, on noticing that AIRCL which represented more than 3/4th of the secured debt of the company had taken measures to recover their secured debt under Section 13(4) of SARFAESI Act, and on possession having been taken, the Company having approached DRT, Bangalore and on examination of several decisions by various High Courts which had held that abatement of reference under SICA is a consequence which occurs automatically on a valid action being taken under Section 13(4) of the SARFAESI Act, passed an order of abatement of the reference made by the company.
3. The order dated 05.01.2010, passed by the BIFR was taken on appeal before the Appellate Tribunal viz., AAIFR, in Appeal No.27/2010. In the meanwhile, one of the unsecured creditor viz., M/s.Man Takraf got its winding up petition revived in view of the liberty granted by the Company Court and the Company Court, by allowing the petition, ordered winding up of the company. When the order of the company Court was challenged before this Court in OSA.No.9/2011, this Court, by order dated 06.04.2011, allowed the appeal and set aside the order of winding up and held that all subsequent action pursuant to the winding up would be void.
4. In the meanwhile, IFCI, initiated action under SARFAESI Act and took possession of the collateral security belonging to the company. The company approached the DRT, Bangalore in S.A.No.116/2010, and the DRT allowed the application, while setting aside the proceedings initiated by IFCI. When IFCI took up the matter before DRAT, the impugned order dated 29.11.2010 was passed, setting aside the order of the DRT and permitting IFCI to proceed further under the provisions of the SARFAESI Act.
5. In W.P.No.17271/2011, the company is assailing the order of DRAT, while in W.P.No.28780/2011, the company is questioning the impugned order dated 23.06.2011, passed by AAIFR, dismissing the Appeal No.27/2010, which was filed by the company.
6. Sri. Aditya Sondhi, learned Senior Counsel appearing for the petitioner-Company submits that the order of DRAT should necessarily fail because the DRAT, simply accepted the ‘No objection’ of the Official Liquidator, without affording an opportunity to the company. The learned Senior Counsel submits that when the DRAT knew that the company is fighting tooth and nail to protect its interest and that of its 2000 employees, DRAT could not have accepted the submission of the Official Liquidator, who failed to protect the interest of the company. It is also evident from the impugned order passed by DRAT that the company was kept in dark. Moreover, it is submitted that this Court, having allowed OSA No.9/2011, set aside the order of winding up, by order dated 06.04.2011, which would justify the allegations made against the Official Liquidator.
7. In so far as, the impugned order passed by the AAIFR, which is under challenge in W.P.No.28780/2011, it is submitted that the Appellate Authority did not notice the categorical finding given by this Court in OSA No.9/2011. It is therefore submitted that since the AAIFR did not have the benefit of looking into the decision of this Court in OSA No.9/2011, it would be necessary to set aside the order of AAIFR and remand the matter back to AAIFR for fresh consideration. On facts, it was submitted that the Appellate authority had reserved the matter for judgment on 04.04.2011, while the judgment in OSA.No.9/2011 was received on 16.06.2011.
8. Sri. S.S.Naganand, learned Senior Counsel appearing for the respondent IFCI would submit that since it is an admitted fact that 85% of the secured assets have been sold by auction and the sale certificates having been issued to third parties, at any rate, these petitions do not survive for consideration. On the strength of the very same factual position, it is submitted that even if the matter were to be remanded back to AAIFR, no useful purpose will be served.
9. The learned Senior Counsel further submits that the SICA Act, having been repealed by Act 1 of 2004 and while Section 252 of The Insolvency and Bankruptcy Code, 2016 (for short ‘Code 2016’) would provide in the VIII Schedule, as per Section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 that any appeal preferred to the appellate authority and pending before the appellate authority shall stand abated, provided that the Company in respect of which such appeal stands abated, under that Clause may make reference to the National Company Law Tribunal (for short ‘NCLT’) under the Code 2016, within 180 days from the commencement of the Code. It is therefore submitted that the AAIFR, having come to a conclusion that the validity of the action taken by IFCI under Section 13(4) of SARFAESI Act having been upheld by DRAT, and there being no effective mechanism for reconstruction of a sick unit like the petitioner-Company, it is prayed that the petitions be dismissed.
10. Heard Sri Aditya Sondhi and Sri S.S.Naganand, learned Senior Counsels appearing for the parties and we have perused the writ papers.
11. On an earlier occasion, in OSA No.9/2011, this Court noticed that when various creditors moved the company Court by filing company petitions, when the matter was referred to the Board and the company was declared as sick industrial unit, further, taking note of Sections 16, 17 and 22 of the Companies Act, 1956, this Court observed that the company Court had dismissed all the company petitions. However, liberty was reserved to the creditors to seek revival before the BIFR.
12. This Court, in OSA No.9/2011, noticed that subsequently when the Board passed an order of abatement and the company preferred an appeal before the AAIFR, in the meanwhile, order of the Debt Recovery Tribunal having been questioned before the DRAT in RS(SA) 99/2010 and the same came to be allowed on 29.11.2010; and M/s.Man Takraf had made an application for revival of winding up petition; the Division Bench proceeded to examine the provisions of Section 15(1) of the SICA.
13. When the fact situation was that when the Board passed an order on 05.01.2010, holding that the proceedings are abated, there was an order of stay of the proceedings initiated by AIRCL, under the SARFAESI Act, and therefore the Division Bench proceeded to hold that the order passed by the Company Court directing winding up of company was void ab initio, one without jurisdiction, non est in the eye of law and consequently all orders passed in pursuance of the said void order were held to be void and consequently set aside. The Co-ordinate Bench passed the order on 06.04.2011.
14. The main ground on which the order of DRAT is questioned now is that the order has been passed at the behest of the Official Liquidator, who expressed no objection to allow the appeal, as IFCI, the appellant therein had followed the provisions of SARFAESI Act and Rules. The contention of the petitioner company is that the Official Liquidator could not have represented the company and the DRAT should have afforded an opportunity to the company. However, we notice that the Co-ordinate Bench in OSA No.9/2011 was aware of the order passed by DRAT on 29.11.2010. The order of winding up passed by the Company Court was set aside by the Co-ordinate Bench by order dated 06.04.2011. Therefore, as on the date when DRAT passed the order on 29.11.2010, the Company was legally to be represented by the Official Liquidator alone. But, the question that arises for consideration is whether the DRAT could have simply accepted the submission of the Official Liquidator and proceeded to allow the appeal, without satisfying itself as to whether 3/4th of the secured creditors initiated the proceedings under the SARFAESI Act and whether there was compliance of Section 15(1) and the provisos thereto, of the SICA.
15. In this regard, it is beneficial to refer to the findings of the Co-ordinate Bench in OSA No.9/2011. At paragraphs-14 and 15 of the order dated 06.04.2011, in OSA No.9/2011, it is held as follows:
“14. The abatement is by operation of law and there cannot be any dispute about it. In the case of abatement of an appeal or suit on account of death of a party, if the death of a party is not disputed, all that has to be done is to calculate 90 days from the date of his death and from then whether any order is passed or not, in law the appeal or suit abates. Nonetheless as pointed out by the Apex Court in the aforementioned two judgments a judicial order is required to recognise such abatement. The said principle has no application to a case of abatement where if certain conditions have to be fulfilled before the law applies. In such cases, the Court has to apply its mind, find out whether such condition is complied with and if it holds that it is complied with, then the law operates and what the Court does is only recording the said legal effect.
15. In the instant case, it is only when 3/4 of the secured creditors initiate legal proceedings under the SARFAESI Act abatement can take place. The said initiation of proceedings could be challenged by the company. In fact in this case it is challenged and an order of stay was obtained. On the day the BIFR passed an order, there was an order of stay in operation. Though the said order was brought to the notice of the BIFR, the BIFR proceeded to pass an order. In that view of the matter, the order passed by the company Court directing winding up of the company is void ab initio, one without jurisdiction, non est in the eye of law and consequently all orders passed in pursuance of the said void order, are also void and are set aside.”
16. Unfortunately, though OSA No.9/2011 was decided on 06.04.2011, the parties received the certified copy of the order on 16.06.2011, while the AAIFR reserved the matter for judgment on 04.04.2011 and passed the impugned order on 23.06.2011. As rightly pointed out by the learned Senior Counsel for the petitioner-Company, the AAIFR did not have the benefit of looking into the order passed by the Co-ordinate Bench in OSA No.9/2011.
17. As noted earlier, though technically it may be right in arguing that the Official Liquidator alone was competent to represent the Company under winding up, in the opinion of this Court, the DRAT could not have allowed the appeal filed by the secured creditor, solely on the submission of the Official Liquidator. The DRAT was required to give a finding after application of mind on whether such condition as imposed in Section 15(1) of the SICA is satisfied and whether 3/4th of the secured creditors have initiated the proceedings under the SARFAESI Act. The decision of the Bombay High Court in the case of Rama Shree Conductors Ltd., Vs. AAIFR in W.P.No.358/2009 decided on 12.11.2009, noticed by the AAIFR, in the impugned order dated 23.06.2011 is also of the opinion that it is the DRT which is the forum provided by the SARFAESI Act for deciding the question as to whether action initiated by a secured creditor under Section 13(4) is valid and in compliance with the said provisions read with Section 15(1) of the SICA.
18. The DRAT, having failed to apply its mind on the mandatory requirements, the order cannot be sustained. This Court, in OSA.No.9/2011, noticed that the Board, while passing the order of abatement, brushed aside the fact that there was an order of stay of all further proceedings initiated under the SARFAESI Act by the creditor by the DRT, which was granted on 22.12.2009 and the same was extended till 15.01.2010. Consequently, the order of the AAIFR also cannot be sustained in the eye of law, since the order in appeal proceeds on the footing that the DRAT has come to a conclusion that the provisions of Section 13(4) of the SARFAESI Act have been complied with.
19. As a result, both the petitions are allowed and the impugned order dated 29.11.2010 passed by the DRAT in R.A.(SA) No.99/2010 and the impugned order dated 23.06.2011 passed by AAIFR in Appeal No.27/2010 are hereby set aside.
20. However, as regards the second prayer in W.P.No.17217/2011 where the petitioner-Company has sought for a writ or direction in the nature of mandamus declaring the action of the respondent in auctioning the properties of the petitioner as illegal and violative of fundamental rights and consequent direction sought to the respondent to handover possession of the said properties, cannot be granted, primarily, since the auction purchasers are not before this Court. Secondly, the petitioner-Company had filed W.P.No.5282/2015, seeking to quash the sale certificates and the learned Single Judge has disposed of the said writ petition by order dated 11.04.2019, observing that the petitioner- Company has alternative and efficacious remedy of approaching the appropriate forum for redressal of its grievance.
21. I.A.No.1/2013 was filed by some of the employees of the petitioner-Company, seeking impleadment. In the facts and circumstances of this case and in the light of the petitions being allowed, we are of the opinion that the application does not survive for consideration. Therefore, I.A.No.1/2013 stands disposed of.
22. I.A.No.1/2019 for production of additional documents does not survive for consideration.
SD/- JUDGE SD/- JUDGE DL/JT