LexBHARAT STEEL TUBES LIMITED versus IFCI LIMITED
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[201 O] 15 (ADDL.) S.C.R. 993 BHARAT STEEL TUBES LIMITED IFCI LIMITED (Special Leave Petition (C) No. 29421 of 2010) NOVEMBER 30, 2010 [ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.] Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - ss. 3 and 13(2) A B - Moneys were borrowed by Petitioner-Company from Bank C which it was unable to repay in full - One-Time Settlement arrived at between Petitioner-Company and Bank - Petitioner- Company made part payment and defaulted in payment of the rest - It entered into an agreement with ACE, a third-party financier to pay off the entire dues of the Bank, which it did - D ACE assigned its rights to IFCI Ltd - Question regarding auction of the assets of Petitioner Company - Proceedings before the Debts Recovery Tribunal - Stayed by Debts Recovery Appellate Tribunal - Writ Petition filed by IFCI Ltd. seeking to set aside the order passed by the Debts Recovery E Appellate Tribunal - Interim order passed by the High Court - SLP against - Held: The entire dues of the Bank stood satisfied, but a new liability was created by the Petitioner- Company in favour of ACE which assigned its rights to IFCI . Ltd - Issues involved regarding steps taken under the F SARFAESI Act yet to be determined by Debts Recovery Appellate Tribunal - However, since meanwhile the impugned order of High Court had ceased to exist, SLP disposed of with a direction upon the Debts Recovery Appellate Tribunal to dispose of the pending appeal expeditiously - Till a decision G is arrived at by the Debts Recovery Appellate Tribunal, auction proceedings being conducted under the SARFAESI Act to remain stayed - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - ·s. 17. 993 H 994 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R. A Contempt of Courts Act, 1971 - s.3(b) - Stay order passed by Supreme Court - Alleged violation of - Contempt petition filed - Held: It is for the Petitioner in a contempt petition who alleges contempt, to establish that the alleged contemnor had defied and/or violated the order deliberately B and wilfully, despite having knowledge thereof- In a contempt proceeding, which is entirely of a summary nature, a person can be sentenced to imprisonment and also punished with fine, withoJt a regular trial, even in the nature of a summons trial - Accordingly, the Courts have to strictly construe the c provisions of s.3(b) of the Contempt of Courts Act, 1971, in order to find a person guilty of having committed contempt of Court - On facts, Supreme Court was not satisfied with the materials placed that the alleged contemnors had any knowledge of the stay order passed by Supreme Court - 0 Contempt petition accordingly dismissed. In relation to an order passed by the Debts Recovery Tribunal, on an application· filed by the Petitioner under Section 17 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, a direction was given by E the Tribunal to the Petitioner to deposit a sum of Rs.35 crores with the Industrial Finance Corporation. of India Ltd. (IFCI Ltd.) without prejudice to its rights and contentions. The Respondent was also directed not to implement the possession notice as well as the public F notice till the next date of hearing. Against the said order, IFCI Ltd. fired Misc. Appeal before the Debts Recovery Appellate Tribunal, which stayed the proceedings before the Debts Recovery G Tribunal. Aggrieved by such direction, the respondent filed writ petition, in which an interim order was passed by the High Court directing that during the pendency of the writ petition, the writ petitioner would be free to proceed in pursuance of the public notice, but the bid H BHARAT STEEL TUBES LIMITED v. IFCI LIMITED 995 was not to be finalized. Since a winding-up qrde~ had A been passed in respect of the petitioner company on the recommendation of the Board for Industrial and Financial Reconstruction (BIFR) and the Official Liquidator had been appointed, it was also directed that the Official Liquidator would be associated with the proces~ .of s auction and the amount received by the Petitioner from prospective purchasers, as earnest money under .the bids, would be kept in a No Lien· Account. · Aggrieved by the said interim order of the Division C Bench of the High Court, the Petitioner Company moved the instant Special Leave Petition. While issuing
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