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IFCI LIMITED versus PUNJAB STATE WAREHOUSING CORPORATION AND

High Court of Punjab and Haryana, Chandigarh

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IFCI LIMITED v. PUNJAB STATE WAREHOUSING CORPORATION AND - CWP-787-2006 [2005] RD-P&H 315 (22 December 2005)

C.W.P.No.787 of 2006 [1]

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

C.W.P.No.787 of 2006

Date of decision: January 19, 2006

IFCI Limited

... Petitioner

Through:

Mr.Manish Jain, Advocate

v.

Punjab State Warehousing Corporation and another ... Respondents

Through: Nemo

CORAM:
Hon'ble Mr.Justice D.K.Jain, Chief Justice Hon'ble Mr. Justice Surya Kant

1. Whether Reporters of local papers maybe allowed to see the judgment ?

2. To be referred to the Reporters or not ?

3. Whether the judgment should be reported in the Digest? D.K.Jain, C.J. (Oral)

Challenge in this writ petition is to an advertisement issued by the Punjab State Warehousing Corporation, respondent No.1 herein, proposing to put to auction plant and machinery, belonging to respondent No.2-Company.

The grievance of the petitioner-Corporation is that all the assets, C.W.P.No.787 of 2006 [2]

belonging to respondent No.2, particularly the machinery now advertised for auction, are hypothecated in its favour by respondent No.2 against various term loans. It is pleaded that on respondent No.2's failure to adhere to the financial discipline, the loans sanctioned in their favour were recalled and even guarantees furnished by the promoters were invoked. An original application was also filed before the Debts Recovery Tribunal (for short, `the Tribunal') for recovery of more than Rs.139 crores from respondent No.2. In a miscellaneous application, filed by the petitioner, the Tribunal, vide its order, dated 3.4.2001, has already restrained respondent No.2 from disposing of its assets without Tribunal's approval. The original application is stated to be pending before the Tribunal.

It is also averred that respondent No.2 had filed a reference application before the Board for Industrial and Financial Reconstruction (for short, `the BIFR') and vide order dated 20.10.2004, passed under Section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985, the BIFR restrained the Company from disposing of its assets without its approval. This order is also stated to be in vogue.

It is submitted by learned counsel appearing for the petitioner that apart from the fact that the petitioner-Corporation has a first charge on the assets belonging to respondent No.2, the proposed auction by respondent No.1 is in violation of the said interim orders passed by the Tribunal as well as by the BIFR.

C.W.P.No.787 of 2006 [3]

Learned counsel thus, submits that respondent No.1 should be restrained from going ahead with the auction.

Bearing in mind the fact that the petitioner has already moved the appropriate forum, namely, the Tribunal for recovery of the amounts due to it and has also obtained some interim orders qua the subject assets in the original application, which is stated to be pending in the Tribunal and respondent No.2- Company's reference in the BIFR has been registered and an interim order restraining respondent No.2 from dealing with its assets has also been passed, we feel that resort to these proceedings is misconceived. If the petitioner feels that first respondent's move to auction the properties, hypothecated with them, is in violation of the aforementioned orders, it is open to them to approach these statutory bodies for appropriate orders.

Accordingly, we decline to entertain the petition. Dismissed in limine.

( D. K. Jain )

Chief Justice

(Surya Kant)

Judge

19.1.2006

mk

C.W.P.No.787 of 2006 [4]


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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