RAMEE HOTELS PRIVATE LTD Vs. IFCI

JUDGEMENT

(1.) THIS writ petition seeks the setting aside of the alleged assignment in favour of respondent No. 3 made by respondent No. 1 with respect to the financial assets of Balaji Hotels Enterprises (Private) Limited which in turn owned property at Mount Road, Chennai. The petition also seeks the issuance of directions to respondents 1 and 2 to consider the purported bid of the petitioner in a transparent manner and in line with the CVC guidelines after holding that the process by which the financial assets have been assigned to respondent No 3 was illegal and invalid.

(2.) THE facts are that the respondent No. 1 (IFCI) and Respondent No. 2 (TFCI) had extended financial assistance of a total amount of approximately Rs 187. 3 crores and Rs 29. 9 crores respectively to Balaji Hotels and Enterprises (Private) Limited (hereinafter referred to as 'balaji Hotels" ). Apart from the principal amount of the financial assistance, substantial interest had also accumulated on those amounts. Balaji Hotels defaulted in making the re-payment and consequently, the financial assistance, which was in the shape of loan and debentures, came to be, declared as non-performing assets.

(3.) THE respondent No. 1 gave Balaji Hotels several opportunities to make the repayments and to revive the assets. An offer for a one time settlement of dues was made by the respondent No. 1 on 6. 11. 2000 but that was not accepted by balaji Hotels. Several options for recovery of the amount due under the said financial assistance were considered from time to time by the Board of Directors of respondent No. 1. Apparently, sometime in May, 2005, the Asset Reconstruction company (India) Ltd. (ARCIL), which had also extended financial assistance to balaji Hotels, entered into an agreement to assign its debt in favour of the petitioner and the said debt was cleared by the commercial area of the property which was belonging to Balaji Hotels.