JUDGMENT - KHANWILKAR A.M., J.:-By this chamber summons, the respondents pray for declaration that the rights of the claimants are governed by the sanctioned scheme dated 30th October, 2002 read with order dated 16th January, 2003 and are not entitled to recover any further amounts from the respondents under consent terms dated 20th January, 2000 and 31st July, 2000. The respondents further pray that the Court Receiver, High Court, Bombay, appointed as Receiver in the award/arbitration proceedings and execution proceedings be discharged, with directions to hand over formal possession of the hypothecated equipments back to the respondents.

2. The claimants had extended loan facility to the respondents, in respect of which loan agreement dated October 17, 1994, was executed between the parties. Besides the loan agreement, memorandum of hypothecation of equipments, belonging to the respondents, was also executed. As dispute arose between the parties, the matter was referred to sole arbitrator, who, in turn, passed Arbitral Award on 21st January, 2000 as per the consent terms signed by the parties. The claimants had filed Arbitration Petition No. 359 of 1999, in which Court Receiver was appointed as per order dated 29th October, 1999. The Court Receiver took possession of the subject property and appointed the respondents as agents of the Court receiver in December, 1999. The above factual position is not in dispute. However, after the Arbitral Award was passed by the sole arbitrator, in February 2000 Case No. 104 of 2000 came to be filed before the B.I.F.R. at the instance of the respondents under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as SICA for the sake of brevity). While the said proceedings were pending, Execution Application Lodging No. 270 of 2000 came to be filed by the claimants in this Court, which, however, was disposed of, again on the basis of consent terms on 28-8-2000. Clause 8-A of the consent terms provides that the respondents do pay to the claimants amount specified therein together with further interest at the rate of 21% per annum on the reducing balance from 1st July, 2000 till the date of actual payment and/or realisation thereof, on or before the dates and in the manner set out in the schedule appended thereto as Exhibit 2-A. Clause 8-B provides that the respondents do pay to the claimants the Indian Rupees equivalent of US Dollar 315,040.50, together with further interest thereon at the rate of six month London Inter Bank Offer Rate (LIBOR) plus 3.665 percentage points per annum on the reducing balance from 15th May, 2000, on or before the dates and in the manner set out in the schedule annexed as Exhibit 2-B. It further provides that the Indian Rupee equivalent shall be worked out on the basis of the prevailing exchange rate as on the relevant dates of payment and/or realisation. Clause 10 of the said consent terms provides that the respondent is ordered and directed that if a revival package for the respondent is sanctioned by B.I.F.R., the respondent do pay to the claimants the entire balance of the decretal amount outstanding as on that date, within a period of 6 (six) months from the date of disbursement of amounts under such revival package. It is apposite to make reference to Clause 16 of the said consent terms, which reads thus :

"It is further ordered that if any of the aforesaid default is committed or occurred, then in that event.

(i) the entire decretal amount together with further interest as provided herein till the date of payment and/or realisation thereof (less the amounts paid if any after the date hereof), shall become forthwith payable by the respondent to the claimants and the respondent do pay the same to the claimants; and

(ii) Without preceding to the other rights and remedies of the claimants including right and remedy to recover and receive from the respondent the amount mentioned in sub-clause (i) hereinabove, the Cour

Click Here to Read the rest of this document