Skip to main content

Lenders can claim dues only after passing of Interim Award

In a case of a company involved in a dispute and undergoing arbitration, a bench comprising of G.S. Patel, J. directed its lenders to wait for the passing of interim award before taking steps to get their money back. In the instant case, a company was incorporated to construct a bridge on a build, operate and transfer basis. A tax policy announced subsequently gave vehicles operating within a 5 km radius a substantial discount in toll rates, which affected the profitability and feasibility of the project. As the plaintiffs were unable to service their debts, the lender banks moved to sell off the pledged shares. The plaintiff company then approached the Court to restrain the lender banks from selling off the pledged shares before the passing of interim award in an arbitration between the company and State Government as they were expecting a favourable decision.

The Court held the request of the plaintiffs to be ‘reasonable’ and ‘moderate’ and in interest of both the parties and thereby directed the consortium of lenders to wait for arbitrators to pass the interim award. The Court further clarified that if the Interim Arbitral Award was not in favour of the Plaintiffs, the Defendants would be at liberty to immediately take steps to enforce the pledged security of 20,00,000 shares of the company without further reference to the Court. The lenders could sell pledged shares as well as invoke the personal guarantee given by the company's promoters and directors. [Kalyan Sangam Infratech Ltd vs. IDBI Bank Ltd, 2015 SCC OnLine Bom 2055 10-04-2015]

 Article referred: http://blog.scconline.com/post/2015/05/06/lenders-can-claim-dues-only-after-passing-of-interim-award.aspx

Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more