1. The petitioner challenges in this writ petition, an order passed by the respondent, rejecting the request of the petitioner for using the interest accumulated on the SLR amount, for making payment to the secured creditors under a One Time Settlement Proposal.

2. I have heard Mr.Arvind P.Datar, learned Senior Counsel for the petitioner and Mr.T.Poornam, learned counsel for the respondent.

3. The petitioner was established as a Non-Banking Finance Company incorporated under the Companies Act, 1956. When the petitioner-company, got into a financial crisis, the respondent issued a communication dated 18.1.2005 prohibiting the petitioner from accepting any further deposits from the public and also prohibiting the petitioner from selling, transferring, creating a charge or mortgaging the assets of the company, without the written permission of the respondent. The said order was passed in terms of Section 45-MB (2) of the Reserve Bank of India Act, 1934.

4. By a further communication dated 28.6.2005, the respondent permitted the petitioner to dispose of the Statutory Liquidity Ratio Investments, in excess of the requirement computed on the level of deposits, as at the end of the second preceding month. The permission so granted was subject to various conditions including the condition that the sale proceeds will be kept in an Escrow Account with a Scheduled Commercial Bank and that those funds will be utilised only for payment of matured deposits. The company should also speed up the process of realisation of dues to repay the deposits and to submit a monthly return of realisation of assets.

5. Thereafter, the petitioner approached this Court by way of a petition in C.P.No.160 of 2005 under Section 391 of the Companies Act, 1956, proposing a Scheme of Compromise with the deposit and bond holders. The Scheme was approved by the Company Court by an order dated 19.8.2006. But the said order was reversed by the Division Bench by an order dated 30.4.2008 in O.S.A.No.308 of 2006. The petitioner filed Special Leave Petitions in SLP (Civil) Nos.12737 to 12740 of 2008. But the Special Leave Petitions were dismissed by the Supreme Court by an order dated 16.7.2013.

6. In the meantime, after the order of the Division Bench of this Court, rejecting the Scheme of Compromise proposed by the petitioner, the petitioner approached the respondent on 19.6.2008, seeking permission to sell the SLR securities as well as some assets, so that the secured creditors, with whom the petitioner had entered into One Time Settlement Proposals, could be paid off.

7. But the said request was rejected by the respondent by an order dated 17.2.2009. The petitioner, however, renewed their request on 9.3.2009 and 5.1.2010, both of which were again rejected on 26.4.2010.

8. In the meantime, under a Government Order G.O.Ms.No.152, dated 8.3.2013, the Bank Accounts of the petitioner company as well as its immovable properties were attached in terms of the provisions of the Tamil Nadu Protection of Interests of Depositors Act, 1997. Challenging the said order, the petitioner filed a writ petition in W.P.No.13030 of 2013. The writ petition was admitted and an interim stay was granted.

9. In the meantime, some of the creditor banks of the petitioner assigned their debts to the Asset Reconstruction Company of India Limited (ARCIL). The Banks that assigned their debt in favour of ARCIL were the United Bank of India, the State Bank of Patiala, the Indian Overseas Bank, the State Bank of Saurashtra and Catholic Syrian Bank.

10. ARCIL accepted a One Time Settlement Proposal from the petitioner, by a letter dated 4.3.2013. Under the said proposal, ARCIL was prepared to accept an amount of Rs.1,28,02,000/-, in discharge of the liabilities due to those 5 Banks to the tune of Rs.43.55 crores. The acceptance of the OTS was subject to two conditions, namely, (i) that the petitioner should make upfront payment of 25% and (ii) should pay the balance amount, on or before 15.4.2013.

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