Case: SUZUKI PARASRAMPURIA SUITINGS PVT. LTD Vs. THE OFFICIAL LIQUIDATOR OF MAHENDRA PETROCHEMICALS LTD (IN LIQUIDATION) AND ORS

from the provisions of Section 130 of the Transfer of Property Act. Therefore, the Company Judge opined that Section 130 of the Transfer of the Property Act was not applicable in the facts of the case leaving it open for the parties to take all available contentions before the appropriate court/forum in appropriate proceedings. In the nature of the controversy sought to be raised by the appellant in the present appeal we consider it proper to set out the following extracts from the order of the Company Judge:?23. The only question which is required to be considered in this application is as to whether the applicant can be permitted to be substituted for and in place of IFCI Limited as the secured creditor of the company in liquidation? For deciding this question, certain provisions of the SARFAESI Act are required to be considered.25. Thus, in view of the aforesaid provisions contained in the SARFAESI Act, I am of the view that when the applicant company is not a bank or banking or financial institution or securitization company or reconstruction company, the applicant cannot be permitted to be substituted in place of IFCI as secured creditor for the purpose of SARFAESI Act.27. The aforesaid provisions of Section 130 of the Transfer of Property Act are not applicable to the facts of the present case as the IFCI has transferred the debts of the company in liquidation in favour of the applicant by deed of assignment and therefore the case of the applicant is that it may be permitted to proceed against the company in liquidation under the SARFAESI Act as secured creditor. The applicant is not entitled to get any benefit under the SARFAESI Act and cannot be termed as secured creditor. Hence the reliance placed by the learned advocate for the applicant on the provisions of Section 130 of the Transfer of Property Act, is misconceived.?9. The relevant extract of the pleadings by the appellant in Company Application No.248 of 2014 noticed by the Company Judge in his order dated 07.09.2015 are also noticeable:?8. I say and submit that earlier, IFCI also filed a purshis dated 21.11.2011 before the Debts Recovery Tribunal, Ahmedabad in Original Application No.452 of 2000 reaffirming that the IFCI Ltd. Has assigned its dues in favour of the applicant. I beg to annex a copy of purshis dated 21.11.2011 filed before the Debts Recovery Tribunal, Ahmedabad in Original Application No.452 of 2000 at Annexure-III.10. I say and submit that apropos to the Deed of Assignment, the Applicant has become the secured creditor of the Company in Liquidation and all the rights of IFCI Ltd. in relation to the financial facilities extended to the Company in Liquidation and the underlying security interests therein vests in the Applicant vis-à-vis the Company in liquidation.?10. The appellant initially took a conscious and considered stand before the Company Judge, staking a claim for being substituted as a secured creditor under the SARFAESI Act consequent to the assignment of debt to it by the IFCI.That the claim was not simply with regard to assignment of an actionable claim under Section 130 of the T.P. Act is evident from its own pleadings and the pursis filed by the IFCI before the Debt Recovery Tribunal.No material has been placed before us with regard to the orders that may have been passed by the Tribunal on such application. After the claim of the appellant of being a secured creditor was rejected by the Company Judge, and the appellant realised the unsustainability of its claim in the law, it made a complete volte face from its earlier stand and surprisingly, contrary to its own pleadings, now contended that it had never sought the status of a secured creditor under the SARFAESI Act.11. The contention of the appellant that it had never sought substitution as a secured creditor under the SARFAESI Act is additionally belied from the recitals contained in the order dated 07.09.2015. Time and again this court has held that the recitals in the order sheet with regard to what transpired before the High Court are sacrosanct. The learned Single Judge, in the review jurisdiction, has reiterated that the arguments addressed before him in Company Application No. 248 of 2014 were made specifically under the SARFAESI Act observing as follows:?It is also required to be noted that learned advocate for the applicant in the said application, at the time of arguments, submitted that the applicant be substituted as secured creditor and given the benefit under the SARFAESI Act and therefore, learned advocate Mr. Rao appearing for the Bank of Baroda submitted in detail, after relying upon the provisions contained in SARFAESI Act, that the applicant cannot be substituted as secured creditor and permitted to proceed under the provisions of SARFAESI Act.?12. A litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands The untenability of an inconsistent stand in the same case was considered in Amar Singh vs. Union of India, (2011) 7 SCC 69 , observing as follows:?50. This Court wants to make it clear that an action at law is not a game of chess. A litigant who comes to Court and invokes its writ jurisdiction must come with clean hands. He cannot prevaricate and take inconsistent positions.?13. A similar view was taken in Joint Action Committee of Air Line Pilots? Assnof India vs. DG of Civil Aviation, (2011) 5 SCC 435 , observing:?12. The doctrine of election is based on the rule of estoppel—the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity….. Taking inconsistent pleas by a party makes its conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolong proceedings unnecessarily.?

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. We have considered the submissions on behalf of the parties.That the unregistered MOU was without permission of the BIFR, it was not disclosed to the Company Court till the winding-up order was passed on 19.04.2010, the assignment of debt of Rs.160 crores by IFCI for Rs.85 lacs are admitted facts.The order dated 31.07.2015 passed by the Company Judge makes it very explicit that the appellant in Company Application No.248 of 2014 had specifically sought substitution in place of IFCI as a secured creditor holding first charge consequent to the deed of assignment in its favour dated 28.07.2010 from IFCI.In support of the relief sought, reliance was also placed on the pursis dated 21.11.2011 filed by IFCI in OA No.452 of 2000 before the Debt Recovery Tribunal, Ahmedabad reaffirming the assignment in favour of the appellant. The submissions made before the Company Judge leaves no doubtsthat as an assignee of debts from the IFCI, the appellant essentially sought substitution as a secured creditor under the SARFAESI Act and for that purpose sought to draw sustenance from the provisions of Section 130 of the Transfer of Property Act. Therefore, the Company Judge opined that Section 130 of the Transfer of the Property Act was not applicable in the facts of the case leaving it open for the partiesto take all available contentions before the appropriate court/forum in appropriate proceedings.lly took a conscious and considered stand before the Company Judge, staking a claim for being substituted as a secured creditor under the SARFAESI Act consequent to the assignment of debt to it by the IFCI.That the claim was not simply with regard to assignment of an actionable claim under Section 130 of the T.P. Act is evident from its own pleadings and the pursis filed by the IFCI before the Debt Recovery Tribunal.No material has been placed before us with regard to the orders that may have been passed by the Tribunal on such application. After the claim of the appellant of being a secured creditor was rejected by the Company Judge, and the appellant realised the unsustainability of its claim in the law, it made a complete volte face from its earlier stand and surprisingly, contrary to its own pleadings, now contended that it had never sought the status of a secured creditor under the SARFAESI Act.The contention of the appellant that it had never sought substitution as a secured creditor under the SARFAESI Act is additionally beliedfrom the recitals contained in the order dated 07.09.2015. Time and again this court has held that the recitals in the order sheet with regard to what transpired before the High Court are sacrosanct.A litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting