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

When debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company

In SHITAL FIBERS LTD.  vs  INDIAN ACRYLICS LIMITED, as per the respondent, appellant had made a payment of Rs.61,83,218/­. However, there was an outstanding balance of Rs.8,92,723/­ as on 28.7.2008. Since despite repeated requests, balance amount was not paid, the respondent issued a statutory notice to the appellant. The same was duly responded to. As the payment was not made despite notice being duly served on the appellant, the respondent filed the aforesaid Company Petition seeking winding up of the present appellant for its inability to pay admitted debts. The learned Company Judge vide order dated 28.9.2015 admitted the Company Petition. However, while doing so, the learned Company Judge observed, that since the appellant was an on­going concern, an opportunity should be granted to it to settle the accounts with the respondent by 31.12.2015. Only in case of failure of the settlement, the citation was directed to be published. On appeal, the Division Bench of the High Cou...
Post a Comment
Read more

Abusing in-laws a ground for divorce: SC

Abusing in-laws and not allowing them to reside in the matrimonial home by a woman amounts to cruelty to her spouse, ground enough for grant of divorce, the Supreme Court has ruled while allowing an NRI's plea for legal separation from his wife. A bench of Justices Vikaramajit Sen and A M Sapre said such incidents could not be termed as "wear and tear" of family life as held by Madras High Court which had said that a couple must be prepared to face such situations in matrimonial relationship. The NRI had filed a divorce petition alleging that his wife was abusive to his family members and did not allow his parents and siblings to stay in his house when they visited the US. Referring to an incident, the husband told the court that his wife had once locked him and his sister out of the house and abused them saying they belonged to a 'prostitute family'. She refused to allow her sister-in-law to enter the house and even lodged a police complaint against her hu...
4 comments
Read more