SALEM TEXTILES LIMITED Vs. AUTHORISED OFFICER

JUDGEMENT

(1.) The challenge in this writ petition is to the notice issued under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI' Act).

(2.) The Petitioner is a Company incorporated under the Indian Companies Act of 1956. The said Company has secured loan from various creditors, Banks etc. including the first Respondent herein. But unfortunately, the Company could not honour its commitments to the creditors. The Company became sick. Therefore, the Petitioner-Company filed a reference before the Board for Industrial and Financial Reconstruction (hereinafter referred to as 'BIFR') under Section 15 of the Sick Industrial Companies (Special Provisions) Act 1985 (hereinafter referred to as 'SICA') for rehabilitation of the company. Admittedly, the reference was taken on file as a Case in Case No. 252 of 1998. Initially, ICICI Bank was appointed as an Operating Agency under Section 16 (2) of the SICA and thereafter by an order dated 20.09.99, the BIFR declared the reference made by the Petitioner as not maintainable. As against the said order of BIFR an appeal was filed by the Petitioner before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and by order dated 28.04.2000, the order of BIFR dated 20.09.99 was set aside and the case was remanded back to BIFR for fresh consideration. Again, the BIFR by order dated 29.12.2000 rejected the reference, as against which, the Petitioner once again preferred an appeal before AAIFR. By order dated 10.05.2001, AAIFR set aside the order of BIFR dated 29.12.2000 and once again remanded the matter back to the BIFR for decision in accordance with law. Thereafter, on 31.01.2002, BIFR appointed ICICI Bank Ltd as Operating Agency under Section 16 (2) of the Act. Subsequently, on the ground that ICICI Bank was not co-operating with the proceedings, the BIFR issued a show cause notice to the said Bank and thereafter, by order dated 30.08.2005 BIFR declared the Petitioner company as a Sick Industrial company under Section 3 (1) (o) of SICA and appointed the second Respondent IDBI Ltd as the Operating Agency under Section 17(3) of the SARFAESI Act to carry out the techno Economic feasibility studies of the company and to prepare rehabilitation scheme for the company, if possible, by fixing the cut of date as 31.12.2005. The Petitioner has thereafter filed a draft rehabilitation scheme with IDBI Ltd on 08.08.2009 as directed by BIFR and the same is pending.

(3.) When BIFR proceeding is so pending as narrated above, the first Respondent has issued a notice under Section 13 (2) of the SARFAESI Act on 03.06.2010 claiming a sum of Rs. 13,36,48,133.64 which is due as on 31.05.2010 with further interest thereon. It is against the said notice, the petitioner has come up with this writ