1. This application is filed seeking leave of this Court under Section 446 of the Companies Act 1956 to execute the Consent Decree dated 9th July 2009 obtained in suit no.164 of 2009 by applicant against Coromandel Garments Limited (in liquidation). Coromandel Garments Limited (in liquidation) is hereinafter referred to as the Company. Official Liquidator has, on behalf of the Company, filed a reply opposing grant of such leave. Official Liquidator has also filed Official Liquidator’s Report No.84 of 2017 seeking various directions from this Court including, inter alia, that the Consent Decree dated 9th July 2009 be set aside and that applicant be directed to bring back, along with interest, amounts received by it from out of the sale proceeds of one of the Company’s properties. The company application has also been opposed by a few unsecured creditors of the Company (in liquidation) who have, in this behalf, filed company application (lodging) No.85 of 2018 (hereinafter ‘Interveners’). The counsel appearing for Interveners basically supplemented the submissions of the counsel for Official Liquidator.

2. By its order dated 2nd June 1998, the Board for Industrial and Financial Reconstruction (BIFR) declared the Company (in liquidation) a sick unit under the provisions of The Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and appointed Bank of Baroda as the Operating Agency for framing a scheme for revival of the Company. The said order contained several directions regarding such a scheme including, inter alia, that “Any shortfall in cashflow projection shall be met by the promoters by bringing in interest-free-funds and not by diversion of working capital.” The Company/Promoters were also directed under Section 22A of SICA not to dispose off any fixed or current assets of the Company without the consent of the BIFR.

3. As part of the revival process, the Promoters were required to make a contribution of Rs.400 lakhs to pay off the workers of the Company under a voluntary retirement scheme floated by it. The Company sought the approval of the BIFR to the creation of a second charge on its mortgaged assets in favour of the Promoter Group Company/Companies bringing in the said contribution. By an order dated 16th September 1999, BIFR sanctioned the proposed creation of the second charge and recorded the consent of Bank of Baroda, the first charge holder, in this behalf.

4. Pursuant to the said order, applicant (then Forbes Gokak Limited) appears to have entered into a Loan Agreement dated 21st September 2000 with the Company. The purpose of the loan, the terms on which it was granted and the relationship between applicant and the Company were reflected in the Loan Agreement, the salient portions of which are reproduced hereinbelow:

“…Whereas the Borrower is a wholly owned subsidiary of The Swadeshi Mills Co. Ltd. having its registered office at Swadeshi Mills Compound, Sion, Mumbai – 400 022 and whereas The Swadeshi Mills Co. Ltd. is a Sick Company registered with the Board for Industrial and Financial Reconstruction (BIFR) and whereas the Borrower is also a sick company registered with BIFR.

And whereas the Lender holds a significant portion of the share capital of the Swadeshi Mills Co. Ltd. and whereas the Borrower has finalized a scheme of VRS for its employees and for the purpose, has entered into a settlement with the Unions of its employees and whereas the Borrower has made an application to BIFR for availing of loan from the Lender and BIFR had approved availing of such Loan and providing security and the security for such loan, is agreed to by and between the Lender and the Borrower as detailed in Table ‘A’ hereto.

It is agreed to by and between the Lender and the Borrower as under:

…

3. The amount of the loan provided under the terms of the agreement together with the interest and all other costs recoverable by the Lender from the Borrower, shall be secured by a charge which is hereby provided by the B