M/S. VEESONS ENERGY SYSTEMS PVT., LTD., REP. BY ITS MANAGING DIRECTOR MR. V. RAMAKRISHNAN C Vs. THE ASSISTANT GENERAL MANAGER, STATE BANK OF INDIA, SME BRANCH, THUVAKUDI INDUSTRIAL ESTATE, THIRUCHIRAPPALLAI

JUDGEMENT

(1.) The Writ Petitioner is an industrial machinery manufacturing company. It seeks to challenge the validity of the notice issued by the respondents under Sub-Section 2 of Sec. 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short, referred to as SARFAESI Act henceforth).

(2.) According to the petitioner, it had been manufacturing engineering machinery, particularly, process boilers and industrial power boilers. It has earned name for itself for the precision and skill employed by it in making boilers as well as for the quality of the products manufactured. It has, in fact, started earning foreign exchange to the country by exporting the machinery manufactured by it to Thailand. It has reached a peak turnover of Rs.210 crores by 2010-2011. During the year 2010-2011, it has entered into an export order for supplying process boilers to a sugar industry in Thailand. It has erroneously considered that EURO is more stable than US$ and hence negotiated for payment in Euros. Unfortunately, the economic conditions in Europe have started taking a downward slide resulting in the Euro losing much of its value. As a consequence of fluctuation of value of foreign currency, the petitioner company, it is, averred, has sustained losses. The turnover has just fallen to Rs.98 crores. But, still, it has a 140 crore worth export order in its hands. But, unfortunately, because of the accumulation of losses for the past over three years, the company has become a sick company.

(3.) In this backdrop, the Writ Petitioner has challenged the notice served under Sub-section 2 of Sec. 13 of the SARFAESI Act. According to the writ petitioner, the petitioner-company has filed for a reconstruction arrangement before Board for Industrial and Financial Reconstruction (BIFR). It was registered. In that view of the matter, the action initiated by the respondent bank has to be withheld.