BHARAT STEEL TUBES LTD Vs. IFCI LTD

JUDGEMENT

(1.) Permission to file Special Leave Petitions is granted.

(2.) In these Special Leave Petitions, M/s Bharat Steel Tubes Ltd. has challenged the judgment and order dated 9th July, 2010, passed by a Division Bench of the Delhi High Court in WP(C) No. 7097 of 2008, holding that the Respondent, Industrial Finance Corporation of India Limited is a "financial institution" under Section 4A(2) of the Companies Act, 1956, read with Section 2(1)(m) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as the SARFAESI Act) and that, as a consequence, the Respondent IFCI Ltd. would be entitled to take recourse to the provisions of the SARFAESI Act in order to enforce a "security interest" which had accrued in its favour. The Petitioner has also challenged an order passed by a Single Bench of the Delhi High Court on 10th September, 2010, in I.A. No. 12908/09 in CS(OS) No. 1886 of 2009 vacating the injunction order earlier passed in the suit.

(3.) Appearing for the Petitioner, Mr. Rakesh Dwivedi, learned Senior Advocate, firstly drew our attention to Section 4A of the Companies Act, 1956, which was introduced by way of an amendment with effect from 1st February, 1975, defining "Public Financial Institutions". It provides that the various financial institutions specified in Sub-section (1), including the Industrial Finance Corporation of India, established under Section 3 of the Industrial Finance Corporation Act, 1948, is to be regarded for the purposes of the said Act, as a public financial institution. Learned Counsel also pointed out that Sub-section (2) of Section 4A also provides that subject to the provisions of Sub-section (1), the Central Government may, by notification in the Official Gazette, specify such other institutions as it may think fit to be a public financial institution. A limitation, however, has been imposed on the said powers of the Central Government by the proviso to Sub-section (2) which provides that no institution is to be specified as a public financial institution unless: