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2011 Supreme(Jhk) 978
2012 (1) JCR 24
R.K. MERATHIA
B.I.F.R.
Versus
M/s UMI Special Steel Ltd.
Company Petition No. 2 of 2002
Decided on : 11th November, 2011
For the Official Liquidator :Mr. B. Mishra, in person. Mrs. M. Patra, Advocate
For the SASF-IDBI-IFCI-SCB :Mr. J. K. Rai, Advocate.
For the Workman :M/s Bhaiya Ramchandra Pd, Advocate
Successor's right to condone delay in filing proof of debt and adjudicate claim under the Industrial Reconstruction Bank of India Act, 1984, and the applicability of the Limitation Act in such cases.
Headnote:
Delay Condonation - Assignment of Debt - Industrial Reconstruction Bank of India Act, 1984, Section 40 - Limitation Act, Article 137
Fact of the Case:
The Assignee filed a petition to condone the delay in filing the Affidavit of Proof of debt and direct the Official Liquidator to accept the claim. The workmen objected, citing the Limitation Act and lack of information to the Company Court regarding the assignment.
Finding of the Court:
The court found that the Assignee, stepping into the shoes of the secured creditor IIBI, had satisfactory grounds for condoning the delay, and directed the official liquidator to adjudicate the claim. The previous order regarding the forfeiture of the right to lodge claim was modified accordingly.
Issues: Delay condonation, assignment of debt, objection by workmen, applicability of Limitation Act
Ratio Decidendi: The Assignee, as the successor of the secured creditor IIBI, had valid grounds for condoning the delay in filing the Affidavit of Proof of debt, and the objection by the workmen did not hold against the assignment made by IIBI.
Final Decision: The delay in filing the Affidavit of Proof of Debt by the Assignee was condoned, and the official liquidator was directed to adjudicate the claim. The previous order regarding the forfeiture of the right to lodge claim was modified.
I.A. No. 2554 of 2011( at Flag 260), the Objection filed on behalf of the workmen ( at Flag 264) and the Report of the Official Liquidator at Flag 262.
I.A. No. 2554 of 2011 has been filed on behalf of Edelweiss Asset Reconstruction Company Ltd., hereinafter referred to as the "Assignee", for condoning the delay in filing the Affidavit of Proof of debt and direct the Official Liquidator to accept the claim of the petitioner.
2. Mr. J.K. Roy, appearing for the Assignee and also for SASF, IDBI, IFCI, SCB, submitted that Industrial Investment Bank of India ( IIBI), a financial institution, was a secured creditor. He referred to the following paragraphs of the I.A.
"9. That IIBI filed an application under section 40 of the Industrial Reconstruction Bank of India Act, 1984 before the Hon'ble High Court at Ranchi for recovery of its dues aggregating Rs.2,31,84,743/-as on 31.12.2001 with future interest @ 14% p.a. with quarterly rests.
"10. That the Company in liqn. was ordered to be wound up by the Hon'ble High Court at Ranchi vide its order dated 05.08.2003. The OL attached to the Hon'ble High Court took possession of the assets of the Company in liqn. on 04.09.2003.
"11. That IIBI paid its share of security charges to the OL till June 2004.
"12. That thereafter as per the plan of Government of India ( GoI), the IIBI started to wind up its operations in 2005-06. Firstly it transferred all its employees and officers to various nationalized banks, then sold its offices and residential premises and thereafter started selling all its Non Performing Assets. As such IIBI became defunct and was not able to file its claim before OL in 2006 when the same was invited by the OL of the Company in Liqn.
"13. That the IIBI-Assignor being desirous of selling, transferring and assigning its rights under the aforesaid facility documents together with all its other rights, title and interests including security interests, pledges and/or guarantees in relation thereto has invited bids for the aforesaid financial facilities on the terms and conditions set out in the "Tender Document" dated 18.6.2010.
"14. That the IIBI-Assignor after taking approval from GoI has agreed to accept the offer of the Edelweiss Asset Reconstruction Company Ltd-Assignee as a successful bidder in terms of the aforesaid Tender Document.
"15. That the Industrial Investment Bank of India Limited ( IIBI) has assigned all its right, title and interest to the Edelweiss Asset Reconstruction Company Ltd., by a Deed of Assignment dated 3.8.2011 bearing Deed no. 4104/3967 registered on 3.8.2011 registered at Registry Office, Gola, Ramgarh, ( Jharkhand) whereby IIBI assigned, sold, transferred in favour of Edelweiss Asset Reconstruction Company Ltd., inter alia all its right, title and interest in respect of all its debts granted and disbursed to UMI Special Steel Ltd.( Company in Liqn.), along with all the underlying security interest in all the securities created by the Company in liquidation and/or the guarantors. Thus Edelweiss Asset Reconstruction Company Ltd. has stepped into shoes of IIBI and has all the right, title and interest in the debts granted and disbursed by it to the Company in liqn. The Deed of Assignment dated 3.8.2011 has been filed with the Substitution Petition as Annexure-2, which is on the record."
He submitted that in these circumstances, the Assignee could not lodge its claim on or before 30.6.2006, which was the last date fixed for filing claim before the Official Liquidator. Therefore, he submitted that the delay in filing the Affidavit of Proof of debt may be condoned and the Official Liquidator may be directed to adjudicate.
3. Though, notices were given to all the secured creditors but only the workmen has appeared and filed its objection.
4. Mr. B.R. Prasad, learned counsel appearing for the workmen, submitted that IIBI was fully aware of this liquidation proceeding before this Court but did not take any step in this proceeding to safe guard it's in
