KAY QUINONE ORGANICS INDIA LTD Vs. IFCI LTD

JUDGEMENT

(1.) The petitioner, by invoking extraordinary jurisdiction of this Court under Article 226 of the Constitution, seeks issuance of a writ of mandamus to declare the order dated 19.6.2008 in I.A. No.1225 of 2008 in IN. No.305 of 2008 passed by the Debt Recovery Appellate Tribunal, Chennai, (for brevity ' the DRAT'), as illegal and unreasonable. In the aforesaid LA, the DRAT granted interim stay subject to a condition of the petitioner depositing an amount of Rupees one crore with the first respondent- bank in two equal instalments, each at Rs.50,00,000/-first instalment to be paid on or before 21.7.2008 and the second instalment to be paid on or before 20.8.2008, and, on such deposit, the respondent was directed to keep the said amount in interest earning no-lien account,

(2.) The first respondent-bank invoked the jurisdiction of the Debt Recovery Tribunal on 1.7.2002, pursuant to which, a Recovery Certificate for a sum of Rs. 174,78,02,3 76.45 ps together with interest at the rate of 20.5% per annum with quarterly rests from 15.5.2007 till realization was issued on 15.5.2007. Thereafter, The Recovery Officer of the Tribunal issued demand notice and thereafter initiated the proceedings against the securities and properties of the petitioner and put the same to auction on 19.6.2008. Then, the petitioner invoked the jurisdiction of the DRAT questioning the recovery proceedings in RP No.98 of 2007 in OA No. 1022 of 2002. The DART by its order dated 22.7.2008 in IA No. 1225 of 2008 in IN No.305 of 2008 granted interim stay of auction subject to certain conditions as stated supra, by exercising its discretionary jurisdiction under Section 21 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Aggrieved thereby, the present writ petition is filed.

(3.) This Court, while issuing notice before admission on 22.7.2008, granted interim stay of recovery proceedings initiated in RP No.98 of 2007 in OA No.1022 of 2002 on the file of the Recovery Officer- II, Debt Recovery Tribunal, Visakhapatnam, (for brevity 'the Tribunal') subject to the condition of the petitioner paying Rs.25,00,000/- within a period of fifteen days from the date of the said order. It was observed therein that if the amount referred to above is not paid within a period of twenty days from the date of the said order, the ad-interim relief granted shall stand vacated automatically.