MAFATLAL DENIM LIMITED Vs. SICOM LIMITED

JUDGEMENT

(1.) These two appeals which are being decided by this common judgement, are filed against the decision in Company Application No. 1 of 2009 in Company Application No. 648 of 2008 rendered by learned Company Judge by oral judgement dated 7/8/2009, 26/8/2009, 28/8/2009 & 31/8/2009. One appeal i.e. Appeal No. 67 of 2009 has been filed by Mafatlal Denim Limited which was the applicant before the Company Judge and another Appeal i.e. Appeal No. 109 of 2009 has been filed by SICOM Limited which was original respondent No. 1 before learned Company Judge. The question which was raised before learned Single Judge was where there is an action under the State Financial Corporation Act, 1951 (hereinafter referred to as "SFC Act") and under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "RDB Act"), can the Company Court exercise powers under Section 391(6) of the Companies Act, 1956 (hereinafter referred to "Act of 1956") pending application under Section 391 of the Act of 1956 and stay the proceedings initiated under RDB Act and SFC Act pending before the respective judicial forums?

(2.) The applicant before learned Single Judge Mafatlal Denin Limited availed various loans from different Banks and Financial Institutions which includes AXIS Bank, EXIM Bank and SICOM Limited. The outstanding dues of all these three institutions payable by the appellant as on 4.2.2009, the date on which the meeting of the secured creditors was held pursuant to the orders of learned Company Judge, were as follows: (a) SICOM Limited Rs. 3,057 lakh (b) AXIS Bank Ltd. Rs. 6,922 lakh (c) EXIM Bank Rs. 2,626 lakh

(3.) The appellant Company having defaulted in making the payment to the Banks and Financial Institutions it felt that the loans are required to be restructured. For that purpose, a Scheme was required to be framed under Section 391 of the Act of 1956. For that matter an application was contemplated before the Company Court. While the Company Court was being considered to be moved by Company for getting the Scheme sanctioned by the Company Court under Section 391 of the Act of 1956, SICOM Limited issued a demand notice dated 18.7.2008 calling upon the appellant Company to pay the amounts due to it amounting to Rs. 1,61,74,750/- on or before 25.7.2008 and vide this notice this was also informed to the appellant Company that failing to make the payment, it would be compelled to take action which may be available in law including action under Section 29 of the SFC Act.