(1.) SINCE we are concerned with the legality and propriety of the interim order dated 18. 9. 2006 passed by the Debts Recovery Appellate Tribunal (for short, the 'appellate Tribunal') under Section 21 of the Recovery of Debts Due to Banks and financial Institutions Act, 1993 (hereinafter referred to as the 'act') whereby the learned Appellate Tribunal has refused to grant waiver of principal deposit of the amount and has directed the petitioner herein to deposit 75% of the amount shown in the Recovery Certificate with the respondent bank as a pre-condition for hearing the appeal, we are not taking note of the facts of the case in greater detail. However, those facts, which are absolutely necessary for disposal of this petition, would be taken note of hereafter.
(2.) THE respondent No. 2, M/s. Malvika Steel Ltd. (hereinafter referred to as the 'company') was given financial assistance by the IFCI Limited (respondent No. 1 herein and referred to as 'ifci') for its steel project. The company had envisaged a modern integrated steel plant to cater to the growing needs of the infrastructural projects which were proposed to be set up at Jagdish Pur, district Sultan Pur, Uttar Pradesh. The said unit was to manufacture 5. 75 lac tons per annum of finished rolled steel products and 57000 tons per annum of Pig iron and total cost of the project was Rs. 1365 crores. Vide its letter dated 6. 5. 1993, the company approached IFCI for sanction of Rupee Term Loan, Foreign currency Loan and investment in partly convertible debentures for the said project. These facilities were sanctioned by the IFCI and various agreements to facilitate grant of the aforesaid Term Loans were entered into.
(3.) M/s. Usha (India) Ltd. (respondent No. 4 herein) was the promoter company of the respondent No. 2 company. The petitioner is the Director of the respondent no. 2 as well as the respondent No. 4. In the said capacity, he executed guarantees to guarantee the repayment of the aforesaid Term Loan transactions on 23. 9. 1994, 20. 11. 1995, 6. 11. 1996, 29. 9. 1997 and 1. 9. 2000. Financial assistance was provided by the IFCI on the execution of these documents. The project of integrated steel plant, as envisaged, was commenced. The first blast furnace was commissioned in October 1995 and the second blast furnace was commissioned in 1996. The company, however, went into losses and it attributes the same to the recession in the domestic as well as international steel markets and inadvertent delay in completion of the project. Negligence and unprofessional conduct on the part of the officials of IFCI is also alleged.