IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE EIGHTEENTH DAY OF NOVEMBER TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE A.GOPAL REDDY and THE HON'BLE MR JUSTICE SAMUDRALA GOVINDARAJULU WRIT PETITION NO : 25013 of 2009 Between: M/S. Stilbine Chemicals Ltd. ..... PETITIONER AND Industrial Finance Corporation of India Ltd. & Another. .....RESPONDENTS The Court made the following : HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON'BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU WRIT PETITION No. 25013 OF 2009 ORDER: (Per Hon’ble Sri Justice A. Gopal Reddy) Normally, this Court would be slow in exercise of writ jurisdiction when a statutory appeal is pending before the appropriate Tribunal, but in this case, we cannot blink our eyes to the illegalities which the respondent-Corporation has resorted to make the appellate remedy a nugatory. The respondent-Corporation sanctioned the term loan to the petitioner-Company to an tune of Rs.800.00 lakhs and subsequently sanctioned loan of Foreign Currency of US $ 2,50,000 (equivalent to Rs.75.00 lakhs) as second loan for which, the immovable properties of the company were offered as security. As the petitioner-Company committed default, on issuing notice under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘Act’) read with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (for short ‘Rules’), dated 5.1.2009, petitioner filed S.A.No.47 of 2009 before the Debts Recovery Tribunal, Hyderabad, in which, it also filed I.A.No.209 of 2009 to say all further proceedings. The Debts Recovery Tribunal, Hyderabad by its order, dated 23.2.2009 stayed all the further proceedings pursuant to the possessory notice, dated 5.1.2009 and posted the matter to 1.5.2009. As against the said ex parte order passed by the Debts Recovery Tribunal, the respondent-Corporation filed an appeal before the Debts Recovery Appellate Tribunal, Mumbai (DRAT, Chennai), which admitted the appeal in I.N. (S.A.) No.226 of 2009 and posted to 17.6.2009. In which, petitioner entered appearance through its advocate. While so, a notice, dated 12.10.2009 was served on the petitioner on 16.10.2009 and its advocate on 20.10.2009 from Debts Recovery Appellate Tribunal, Mumbai (DRAT, Chennai) in which, the Appellate Tribunal by its order, dated 20.10.2009 kept the order passed by the Debts Recovery Tribunal, dated 23.2.2009 in abeyance and posted the appeal for hearing on 26.11.2009. Pending the said appeal, the respondent- Corporation by notice, dated 22.10.2009 called upon the petitioner- Company to pay Rs.7,725.90 lakhs immediately failing which, it would issue a fresh auction notice for sale of secured assets of the Company under Rule 6(1) and Rule 8(5) of the Rules by enclosing a copy of publication of proposed auction notice, dated 22.10.2009 published in the New Indian Express, dated 23.10.2009 fixing the auction date as 25.11.2009 at 11.00 a.m. Questioning the said sale notice, the present writ petition is filed. We have heard Sri D. Prakash Reddy, learned senior counsel appearing for the petitioner-Company and Sri Deepak Battacharjee, learned standing counsel for the respondent-Corporation. It is not disputed that the petitioner categorically asserted before the Debts Recovery Tribunal in S.A.No.47 of 2009 that the respondent- Corporation does not represent 3/4th in value of the amount outstanding as on the date of issuance of notice under Section 13(2) of the Act and therefore, the Corporation cannot unilaterally invoke the provisions of Section 13(4) of the Act unless the other secured creditors, who are representing 75%, have agreed for such course. The Debts Recovery Tribunal after considering the said fact granted stay of all further proceedings. If the respondent-Corporation is aggrieved by the said order, it is always at liberty to approach the said Tribunal for vacating the stay or can also avail the appellate remedy concurrently. Having availed the concurrent remedy of appeal and obtained the interim suspension of stay orders and when the appeal is posted to 26.11.2009, what prompted the respondent-Corporation to issue the sale notice on the very next date of obtaining the suspension orders is not forthcoming. In the event, if the appeal filed by the respondent- Corporation is dismissed and in the meanwhile, if the property is permitted to be sold, third party rights would be crept in which would multiply the litigation. In that view of the matter, we deem it appropriate to stay the auction pursuant to sale notice, dated 22.10.2009 until I.N. (S.A.).No.226 of 2009 is decided on merits by the Debts Recovery Appellate Tribunal, Mumbai (DRAT, Chennai). The Writ Petition is accordingly allowed staying the auction pursuant to the sale notice, dated 22.10.2009 till the appeal in I.N. (S.A.).No.226 of 2009 is decided on merits by the Debts Recovery Appellate Tribunal, Mumbai (DRAT, Chennai). The person representing the petitioner-Company shall appear before the Debts Recovery Appellate Tribunal, Mumbai (DRAT, Chennai) on each date of hearing and cooperate with it for disposal of appeal and failure to do so, it is always open for the Appellate Tribunal to pass orders on merits. No order as to costs. _________________ (A. GOPAL REDDY, J.) ____________________ (SAMUDRALA GOVINDARAJULU, J.) NOVEMBER 18, 2009 TSR