Back
IN THE HIGH COURT OF DELHI
PRATHIBA M. SINGH, J.
Hero Exports - Appellant
Versus
Tiffins Barytes - Respondent
Original Miscellaneous Petition No. 369 of 2008
Decided on : 31-05-2019
Attachment - Insolvency Resolution Process - Section 9 of Arbitration Act, Section 18 and 14 of Insolvency and Bankruptcy Code, 2016 - [Section 9 of Arbitration Act, Section 18 and 14 of Insolvency and Bankruptcy Code, 2016] - The court discussed the attachment of funds, jurisdiction of NCLT, and the powers of the Resolution Professional in the context of insolvency resolution process. The court emphasized that the NCLT has exclusive jurisdiction to deal with applications related to the assets of a company under insolvency resolution, and any orders passed by the civil court are subject to the NCLT's decision. The court highlighted the provisions of the Insolvency and Bankruptcy Code and cited relevant judgments to support its decision.
Fact of the Case:
The Resolution Professional (RP) sought release/transfer of funds of the Respondent company secured with ABN Amro/RBS Bank, pursuant to previous court orders. The RP argued that the funds were assets of the company under Section 18(1)(f) of the IBC and should be under the control of the RP due to the insolvency resolution process.
Finding of the Court:
The court held that the NCLT has exclusive jurisdiction to deal with the application filed by the RP and the Civil Court's jurisdiction is barred under Section 63 of the IBC. The court emphasized that any orders related to the funds, even if successful in arbitration, would be subject to the jurisdiction of the NCLT during the insolvency resolution process.
Issues: The main issue was the jurisdiction over the funds of the Respondent company during the insolvency resolution process, and the authority of the Resolution Professional in managing these assets.
Ratio Decidendi: The court's decision was based on the provisions of the Insolvency and Bankruptcy Code, particularly Section 63, and relevant judgments emphasizing the exclusive jurisdiction of the NCLT in matters related to the assets of a company under insolvency resolution.
Final Decision: The court directed that the amount deposited by ABN Amro/RBS Bank shall remain deposited with the Registrar General of the Court, but the NCLT shall have jurisdiction to decide the application filed by the RP as to the manner in which the said amount is to be dealt with and whether the same is to be put at the disposal of the RP. The NCLT shall take into consideration any orders passed by the Civil Court previously and hear the Petitioner's objections, as per the provisions of IBC. All the objections of the Petitioner are left open. Parties are permitted to approach the Registrar General for release of amounts, if any, in compliance with any orders that may be passed by the NCLT.
JUDGMENT :
Prathiba M. Singh, J.
I.A. 7004/2019 in O.M.P. 369/2008
The present application has been filed by the Resolution Professional ('RP') seeking release/transfer of funds of the Respondent company secured with ABN Amro /RBS Bank, pursuant to the orders dated 18th July, 2008 and 26th November, 2008 passed by this Court.
2. The background of the present application is that a Section 9 petition came to be filed being OMP 369/2008. The same related to a sale/purchase transaction between the Petitioner and the Respondent. In the said OMP, order dated 18th July, 2008 was passed by the ld. Single Judge of this Court wherein this Court was of the opinion that the amount, which was due to the Petitioner, was liable to be secured. The relevant portion of the said order reads as under:
“Having regard to the nature of the transaction , whereby the respondent had agreed to supply the goods and apparently obtained full consideration but was later unable to do so and that the copies of the documents placed on record show that it promised to return the amounts this Court is of the opinion that if an appropriate interim order is not made, at this stage, the remittances made by the respondent's Foreign buyers to its bankers as sale price would in all probability be withdrawn and taken away. This would thwart the future course of dispute resolution through arbitration. The materials on record suggest prima facie, that the respondent is liable to pay the amount of Rs. 8.5 lakhs (sic Rs. 8.5 crores) to the Petitioners. The Court is also of the opinion that unless an ex-parte order is made, the petitioner would be put to grave hardship.
In the circumstances, the respondents are hereby restrained from encashing the proceeds of the sums, placed at their disposal, towards the sale consideration of iron ore which constitutes consideration for the quantity of 388 MT, for which remittances would be received by them in their bank accounts namely ICICI Bank, Chennai (A/C No.602605037810); Union Bank, Chennai (A/C No.101153 ING), Vysya Bank, Chennai (A/c. No.403011009619), CITI Bank Chennai (A/c. No.0133944443), Standard Chartered Bank, Chennai (A/c.No.42705001861) and ABN Amro Bank, Chennai (A/c.No.09844899), to the extent of Rs.8,50,00,000/- (Rupees eight crores fifty Lakhs only) till the next date of hearing.
It is open to the petitioners to serve a copy of this order to the concerned Banks.”
3. Subsequently, further orders came to be passed dated 26th November, 2008 wherein the amount lying with ABN Amro/RBS Bank was attached and was directed to be kept in the form of fixed deposit yielding maximum interest. The said order reads as under:
“The senior counsel for the respondent opposes the OMP under Section 9 off Arbitration Act on the ground that there is no arbitration agreement between the parties. the senior counsel for the petitioner has handed over a copy of the order dated 2nd September, 2008 in an Arbitration Application under Section 11 of the Arbitration Act between the same parties and relating to same transaction where also the same plea was raised by the respondent and where this Court had held that the said plea of the respondent can be adjudicated by the arbitrator. Accordingly, an arbitrator was appointed. The respondent has preferred an SLP against the said order and which is stated to be listed on 12th December, 2008 for final disposal. The senior counsel for the respondent has urged that the question can be gone into independently in these proceedings under Section 9 of the Act. However, it is deemed appropriate to await the decision in the SLP aforesaid.
That in terms of order dated 18th July, 2008, money to the extent of Rs. 8.5 crores in the several bank accounts of the respondent was ordered to be secured. One of the banks being ABN Amro Bank has informed that they are holding a sum of Rs. 5.89 crores in the bank account (A/c No. 09844899) of the respondent subject to the further orders of this Court. The senior counsel for the respon
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
