P. NAVEEN CHAKRAVARTHY, SUSPENDED BOARD OF DIRECTORS OF M.K.CABLES & CONDUCTORS (P.) LTD Vs. PUNJAB NATIONAL BANK, CHENNAI

JUDGEMENT

(1.) At the highest, if the writ petition succeeds it may only be a pyrrhic victory and there may not be much cheer for the writ petitioner at the end of the day.

(2.) The essential facts are undisputed. The petitioner was a shareholder and director in a company. The respondent bank accorded credit facilities to such company which were secured, inter alia, by a mortgage or the like of an immovable property against which the bank proceeded under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. Upon the bank seeking to auction the property in favour of the respondent auction purchaser, the debtor company challenged the transaction by way of proceedings under Section 17 of the Act of 2002. On grounds that are not relevant for the present context, the relevant Debts Recovery Tribunal annulled the transaction. The concerned bank carried an appeal to the appropriate Debt Recovery Appellate Tribunal.

(3.) During the pendency of the proceedings before the DRAT, an operational creditor of the debtor company invoked the provisions of the Insolvency and Bankruptcy Code, 2016 and brought an action before the National Company Law Tribunal in such regard. In due course, a declaration of moratorium under Section 13 of the Code of 2016 came to be made on July 30, 2019 upon admission of the application of the operational creditor.