HARGREAVES INVESTMENTS LTD Vs. APPELLATE AUTHORITY FOR INDUSTRIAL

JUDGEMENT

(1.) THE Petitioner has filed this Writ Petition under Article 226 of the constitution of India seeking a writ of certiorari for quashing the order dated 24th September 2007 passed by Appellate Authority for Industrial and Financial reconstruction, New Delhi (AAIFR) in Appeal No. 194 of 2002 along with MA No. 116/2007 dated 24th September 2007 and the order dated 10th October 2006 passed in MA No. 210/2006. The effect of these orders is that the land of the Respondent no. 3 Sick Company admeasuring about 205 Acres in Khapoli, Maharashtra as been permitted to be sold to Respondent No. 5 for an amount of Rs. 18 crores, and the application of the petitioner for recall of the said permission has been dismissed. The Petitioner also seeks direction to the AAIFR to accept the bid of rs. 28 crore or in the alternative direct the sale of the said land at Khapoli in district Raigarh, Maharashtra to be carried out in transparent manner by following the procedure prescribed by law.

(2.) TO appreciate the controversy raised in this petition the necessary facts may first be stated. Respondent No. 3, Reliance Silicones (I) Pvt. Ltd. (hereinafter referred to as 'the company') is an industrial company engaged in the business of, inter alia, manufacture and sale in India and abroad of various chemicals, generally called 'silicones'. Respondent No. 3 became a sick company. Its case was referred to Board for Industrial Financial Reconstruction and was registered as Case No. 30/1996. The AAIFR sanctioned a revival scheme of the company on 29th august 2000 stipulating the settlement of dues of secured creditors, i. e. IDBI, uti and Central Bank of India (CBI) in the following manner under a one time settlement (OTS) :-IDBI : 10. 52 crore uti : 1 crore cbi : 19. 33 crore

(3.) THE aforesaid three financial institutions had a charge over one of the assets of the company situated at Vashi, Maharashtra. The company settled the dues of idbi and UTI in full and also paid an amount of Rs. 15. 72 crore to CBI. However, since the entire amount under the settlement was not paid to CBI, disputes emerged regarding the payment terms and settlement. The CBI proceeded to walk out of the settlement, which was objected to by the company. The BIFR vide its order dated 5th April 2002 restrained CBI from canceling the OTS unilaterally since the company had already made substantial payments. Aggrieved by the aforesaid order of BIFR dated 5th April 2002, CBI preferred appeal No. 194/2002 before the AAIFR claiming the entire principal alongwith the interest and damages.