Skip to main content

Lenders can claim dues only after arbitration is over: Bombay High Court

The Bombay High Court has ruled that if a company involved in a dispute has sought arbitration, its lenders must wait for the proceedings to conclude before taking steps to get their money back. The court directed a consortium of lenders led by IDBI to wait for arbitrators to pass an interim award in a row between road builder Kalyan Sangam Infratech and the Maharashtra government before moving to recover Rs 250 crore owed by the company.

If the dues aren't paid by June 30, after the arbitration is over, then the lenders can sell shares pledged by the company, Justice GS Patel said in his order dated April 10. Kalyan Sangam Infratech, which was contracted to build a bridge in the state, is seeking compensation from the government after toll for some users was reduced.

Kalyan Sangam Infratech was incorporated in 2008 to construct the South Kasheli and North Kasheli bridge in Thane district on a build, operate and transfer basis. A tax policy announced in July 2009 gave vehicles operating within a 5 km radius a substantial discount in toll rates, which the company said affected the profitability and feasibility of the project.

The company also sought to terminate the concession agreement with the Maharashtra government and the dispute was referred to a three-member arbitration panel.

To fund projects, Madhya Pradesh-based Kalyan Sangam Infratech had taken a five-year term loan from the consortium of banks in 2010, with the promoters pledging about 20 lakh shares of group company Sangam (India) Ltd as security.

Article referred: http://economictimes.indiatimes.com/industry/banking/finance/banking/lenders-can-claim-dues-only-after-arbitration-is-over-bombay-high-court/articleshow/47066525.cms

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Vanishing promoters and languishing shareholders

Over Rs 60,000 crore of shareholders’ wealth is stuck in 1,450 companies suspended by the stock exchanges. More importantly, near 100 per cent pledging of promoter holding appears to be common in many of these companies. This, almost rules out any chance of the companies bouncing back. The suspension is for non-compliance of the listing norms. Vanishing Companies - Definition As per the definition stipulated by SEBI, any listed company, which raised moneythrough initial public offer and, thereafter, stopped operations, did not file returnseither with the RoC or SEBI and did not exist on the registered premises wastermed as vanishing.There are provisions under Companies Act under which companies are termedvanishing companies on satisfying certain conditions. it is provided a companywould be deemed to be a vanishing company, if it satisfies all the conditions given below : a) Failed to file returns with Registrar of Companies (ROC) for a period of two years; b) Failed to fil...
3 comments
Read more

Property can be sold on power of attorney - Delhi High Court

As reported in the Hindusthan Times on 5th May:-  http://www.hindustantimes.com/India-news/NewDelhi/Property-can-be-sold-on-power-of-attorney/Article1-1054964.aspx In a judgment that will benefit lakhs of Delhi residents living in co-operative housing societies and DDA flats, the Delhi High Court has quashed a Delhi government circular banning property sale in the Capital through general power of attorney (GPA). The court found that the directions in the circular, issued by the revenue department on April 27 last year, were contrary to the Supreme Court judgment dated October 11, 2011. The HC order will increase the number of saleable properties in Delhi and could bring down the value of freehold properties. According to realty watchers, on an average, around 20% of properties are registered through GPA transfers — a common way of selling leasehold properties and those that don’t have a clear title. The judgment came on a petition filed by a company, Pace Developers and ...
5 comments
Read more