1 S.B.CIVIL WRIT PETITION NO.5082/2007 M/s Kandhari Rubbers Ltd. Vs. Appeallate Authority for Industrial & Financial Reconstruction & Ors. DATE OF ORDER :: 23.10.2007 HON'BLE MR.JUSTICE GOVIND MATHUR Mr. Tribhuvan Gupta, for the petitioner. Mr. Dinesh Mehta } for the respondents. Mr. Sandeep Shah} Mr. R.K. Soni } .... The petitioner a company incorporated under Companies Act, 1956 availed finance from financial institutions viz. IDBI, ICICI, IFCI, SBI etc. however, on being failed to satisfy regular instalments the IDBI preferred an application before the Debt Recovery Tribunal, Jaipur for recovery of deus and that came to be decided by order dated 4.10.2001. Accordingly, a recovery certificate to recover a sum of Rs.2,59,55,747.00 with interest @ 6% w.e.f. 15.5.2001 was issued. Similar kind of certificates were also issued by the Debt Recovery Tribunal while accepting applications preferred by other financial institutions like IFCI and ICICI. The Appellate Tribunal after adjudicating the appeals filed by the financial institutions modified and revised rate of interest from 6% to 10%. Subsequent thereto the petitioner-company claiming itself to be a sick industry as per meaning prescribed under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter to be referred to as, 'the Act of 1985') applied for its 2 revival, accordingly a reference No.30/2002 was registered. During pendency of the reference the respondent IDBI initiated proceeding under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter to be referred to as, 'the Act of 2002') and possession of the secured assets was taken on 21.12.2005 as per provisions of Section 13(4) of the Act of 2002. Aggrieved by the same the petitioner approached this Court at its Jaipur Bench by way of filing a writ petition but that came to be dismissed as withdrawn on 9.3.2006 with a liberty to avail remedy before the Debt Recovery Tribunal. An application, thereafter, was filed by the petitioner under Section 17 of the Act of 2002 alongwith an application seeking interim relief. The Debt Recovery Tribunal by its order dated 17.8.2007 disposed of the application seeking interim relief with following direction: “In the facts and circumstances of the case and the statements made by the learned counsel it is ordered that the Respondent IDBI shall be at liberty to open the bids but shall not finalize the bid till the next date of hearing. This I.A. is accordingly disposed of.” It is relevant to note here that the Board of Industrial and Financial Reconstruction (BIFR) on the count that possession of the secured assets was already taken as per Section 13(4) of the Act of 2002 3 treated the Reference No.30/2002 abated under an order dated 10.10.2006 and the order aforesaid stood affirmed by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) under an order dated 9.4.2007. By this petition for writ challenge is given by the petitioner to the orders dated 10.10.2006 passed by the BIFR, order dated 9.4.2007 passed by the AAIFR and the order dated 17.8.2007 passed by the Debt Recovery Tribunal. While assailing validity, correctness and propriety of the orders aforesaid contention of learned counsel for the petitioner is that the BIFR as well as AAIFR erroneously treated the reference abated, as no proceedings as per law were taken under Section 13(4) of the Act of 2002. It is also contended by learned counsel for the petitioner that no secured assets could be sold till pendency of the appeal, and therefore, the Debt Recovery Tribunal erred while permitting the respondent IDBI to open the bids. A contention is also raised that the principle of res judicata operates in the present matter in view of the fact that the dues relating to IDBI were determined and a certificate of recovery was already issued and once a matter has been finalized it is not open to adjudicate the same. A reply to the writ petition has been filed on behalf of the respondent IDBI stating therein that as a matter of fact whatever 4 questions raised in this petition for writ are pending adjudication before the Debt Recovery Tribunal in SA No.21/2006 titled as Kandhari Rubbers Ltd. Vs. IDBI & Ors., and therefore, this Court should not interfere with the matter at this stage. I have perused the orders impugned. From perusal of the order dated 17.8.2007 passed by the Debt Recovery Tribunal it is apparent that all the contentions raised by the petitioner in this petition for writ are pending consideration before the Tribunal in the appeal preferred by the petitioner himself. The Tribunal refused to examine those questions while deciding the application for interim relief on the count that it would be a decision of merits and that will frustrate the main appeal itself. I am of the considered opinion that no interference in the matter at this stage is warranted in view of the fact that whatever contentions raised by the petitioner in this petition for writ are pending consideration before the Debt Recovery Tribunal. However, looking to the facts and circumstances of the case it is desirable that till disposal of the appeal IDBI should not be permitted to finalize the bid. Accordingly, this petition for writ is disposed of with a modification in the order dated 17.8.2007 passed by the Debt Recovery Tribunal, Jaipur to the effect that the respondent IDBI shall be at liberty to open the bids but shall not finalize the bid till disposal of the appeal. 5 The Debt Recovery Tribunal shall make all necessary efforts to decide the main appeal expeditiously as far as possible within a period of three months from today. No order as to cost. (GOVIND MATHUR ),J. jgoyal