M.SRINIVASA BABJI Vs. UNION OF INDIA

JUDGEMENT

(1.) The Writ Petition is filed seeking issue of Writ of Mandamus, directing the respondents 1 and 2 to withdraw the 'Look Out Circular' issued against the petitioner on the basis of request made by the respondents 3 and

(2.) It is the case of the petitioner that he was inducted as an Independent Director of Vijay Home Appliances based on his personal relationship with the Managing Director of the said Company. In the year 2009, the said Company approached the 3rd respondent-Bank for credit facilities amounting to Rs.13.00 crores to run its operations and said facility was extended to the said Company. The petitioner herein stood as a personal guarantor for proper repayment of the loan amount and executed a Deed of Memorandum of Deposit of Title Deeds in respect of certain immovable properties. The petitioner ceased to be a Director of the Company with effect from 3/12/2012. After the petitioner ceased to be Director of Company, a letter was addressed to the 3rd respondent-Bank to release the personal guarantee and collateral securities offered by the petitioner.

(3.) Subsequently, the Company was admitted into the Corporate Insolvency Resolution Process under the provisions of the Insolvency and Bankruptcy Code, 2016, the assets and liabilities of the Company were taken over by the Resolution Professional appointed by the NCLT. Thus, the Bank became a Financial Creditor and part of the Committee of Creditors constituted under the Act.