M/s. Ramsarup Industries Ltd. Nilesh Sharma, Advocate IFCI Factors Ltd. Ramesh Gopinathan, Advocate Applicant-MA-175/2015 Punjab National Bank KBS Bedi, Advocate Dileep K Jha, Sr. Manager Axis Bank Ltd. Jogendra Singh, Legal Manager Bank of India Prateek Mishra, Manager (L) Asset Reconstruction Company L Dinkar Singh, Advocate (India) Ltd. Development Credit Bank Shyam Sunder Chandhok Assistant Manager(L) Federal Bank Amjith John, Sr. Manager(L) ICICI M L Rajora, Advocate Indian Overseas Bank Sanjeet Suman, Manager-Law Kotak Mahindra Bank Ltd. Abhishek Anand, Advocate Monoj Chauhan Pegasus Assets Reconstruction Monoj K Aich, Consultant Co. Ltd. CASE NO. 67/2012 M/S. Ramsarup Industries Ltd.. 2 UCO Bank IPS Oberoi, Advocate United Bank of India Amit Srivastava, Manager(L) Primetals Technologies India Kanchan Yadav, Advocate Pvt. Ltd. Applicant-MA-54/2016 Central Bank of India Gopal Ram Meghwal, Sr. Manager Vijaya Bank P S Shetty, Advocate D Banerjee, Manager-Law J M Financial Asset Reconstruction Rajive R Raj, Advocate Co. Ltd. Applicant-MA-97/2015 Small Indl. Development of India Ltd. Ashish Sharma, Advocate Director of Income Tax D R Jain, Advocate Govt. of West Bengal Parma Nand, OSD SREI Equipment Finance Ltd. Saquib Arbab, Advocate Govt. of Karnataka Commr.Taxes Gaurav Singh, Advocate ******* Based on its audited balance sheet (ABS) as on 31.03.2012 the above Co. filed a reference with BIFR u/s 15(1) of the sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the Act ) vide Form A received by BIFR on 07.11.2012. The decision to file the reference was taken in the company s Board of Directors meeting held on 05.11.2012. It is noted from Form A and other papers filed by the company that it was incorporated on 09.07.1979 in the State of West Bengal and owned five units. Four Units located at West Bengal and one at Maharashtra (Wind Mill). The Company was engaged in manufacture of Sponge iron, MS billet, TMT Bars under heading 1A( 3,4,& 7) of IDR Act, 1951. The factory, which as per Form A employed 1773 workers was reported to be working. The company s above mentioned ABS showed its net worth (NW) as Rs. 45243.02 lakhs consisting of paid up capital of Rs.6203.84 lakhs and free reserves as Rs. 39039.18 lakhs. The net worth was claimed to have been fully eroded due to the accumulated losses, which CASE NO. 67/2012 M/S. Ramsarup Industries Ltd.. 3 stood at Rs.53466.49 lakhs. The Company s investment in plant & machinery (P&M) in Form A at Rs. 50188.26 lakhs. Under directions from the Board, the Company confirmed having supplied copies of Form A with full set of enclosures to all its secured creditors. 1.1 The subsequent hearings were heard on 24.12.2012, 10.04.2013, 04.06.2013,5.8.2013,8.8.2013,22.8.2013, 01.10.2013, 18.11.2013, 28.11.2013, 09.01.2014. 1.2 In the hearing held on 9.1.2014, the Bench directed the Punjab National Bank and the company to submit the synopsis of their submission in writing within a period of 10 days. Accordingly, The Bench reserved its order on MA No. 486/2013 and will be pronounced later on. 1.3 The Bench release the order dated 19.02.2014 reserved in the hearing held on 09.01.2014, the Bench is of the opinion that PNB on its behalf and on behalf of its other lenders has taken action u/s 13(4) of the SARFAESI Act in the case of Unit-I, Unit-II and Unit-III of the company where it has charge over the respective securities, which is as per authorization extended by the bankers. As such, the reference is abated in accordance with third proviso of section 15(1) of sica. All stakeholders are at liberty to recover their dues as per law. 1.4 The company has filed an appeal before Hon ble AAIFR against the Board s order dt. 19.02.2014. Hon ble AAIFR vide its order dated 03.12.2014 has set aside the Board s order and remanded the case back to BIFR with direction to consider the submission of all the parties and pass order afresh after giving specific finding through a reasoned order as to whether M/s PNB along with all other secured creditors on whose behalf it has taken action under sec. 13(4) of sarfaesi act indeed constitute more than 75% of the outstanding dept or not?. 1.5 In the hearing held on 22.01.2015, the Bench observed that Hon ble AAIFR s order dated 03.12.2014 has been made available in today s hearing. The next date of hearing is fixed on 09.02.2015. CASE NO. 67/2012 M/S. Ramsarup Industries Ltd.. 4 1.6. In the hearing held on 09.02.2015, the Bench observed that Hon ble AAIFR vide its order dated 03.12.2014 has set aside the impugned order and remanded the matter back to the BIFR with direction to consider the submission of all parties and pass order afresh after giving specific finding through a reasoned order as to whether PNB alongwith all other secured creditors on whose behalf it has taken action u/s 13 (4) of SARFAESI Act. Accordingly, the next date of hearing is fixed on 23.02.2015. Hearing fixed on 23.2.2015 was subsequently postponed. 1.7 J M Financial Asset Reconstruction Company (P) Ltd.(Applicant) has filed a misc. application no. 97/BC/2015 dt. 20.2.2015 and requested the Board to substitute the name of UCO Bank by the name of the present applicant ARC i.e. J M Financial Asset Reconstruction Company (P) Ltd. in place of and instead of UCO Bank; and consequential amendments /orders thereto. 1.8 IFCI Factors Ltd. has filed a misc. application no. 175/BC/2015 dt. 7.5.2015 and requested the Board to grant them permission to file the recovery proceedings against the company and its guarantors at the appropriate Court. 1.9 In the hearing held on01.06.2015 in MA No. 97/2015, the Bench issued the following directions:
(i) JM Financial Asset Reconstruction Co Ltd to again serve a copy of MA to all concerned parties within a period of one week and submit proof of service to the Board.
(ii) Company and other concerned parties to file reply to the MAs filed by JM Financial Asset Reconstruction Co Ltd and IFCI Factors Ltd within a period of three weeks with a copy to JM Financial Asset Reconstruction Co Ltd and IFCI Factors Ltd.
(iii) The next date of hearing of MA Nos. 97/2015 and 175/2015 is fixed on 08.09.2015. CASE NO. 67/2012 M/S. Ramsarup Industries Ltd.. 5 1.10. In the hearing held on 08.09.2015, the Bench observed that as on date the issue before BIFR is to take a decision on the submissions already made by the parties regarding determining percentage of dues of secured creditors of the company, who took action u/s 13 (4) of SARFAESI Act. However, keeping in view of order of Hon ble AAIFR dated 03.12.2014, a clarification in this regard, needs to be taken. In view of the aforesaid observations, the Bench issued the following directions:
(i) PNB to seek clarification from Hon ble AAIFR on its earlier directions dated 03.12.2014 and submit the same.
(ii) The next date of hearing is fixed on 13.10.2015. Hearing fixed on 13.10.2015 was subsequently postponed. 1.11 Primetals Technologies India Pvt. Ltd.(Applicant) has filed a misc. application no. 54/BC/2016 dt. 24.2.2016 and requested the Board to implead them as a party in the reference filed by the captioned company. They further requested to leave be granted to lodge its claim of Rs.10,17,68,426.91 in the instant proceeding as an unsecured creditors and further requested to direct the company to include the claim of the applicant for a sum of Rs. 10,17,68,426.91 in the DRS to be formulated by the company. 1.12. In the hearing held on 09.05.2016, the Bench issued the following directions:
(i) MA No. 97/2015 is disposed off with direction to substitute JM Financial Asset Reconstruction Co in place of UCO Bank. Company to provide a copy of Form-A to JM Financial Asset Reconstruction Co within a period of one week.
(ii) MA No. 175/2015 is disposed off with direction to the company to incorporate the dues of IFCI Factors Ltd in the DRS.
(iii) All the parties to come prepare in the next date of hearing for final argument for abatement of the reference of the company.
(iv) The next date of hearing is fixed on 20.05.2016. CASE NO. 67/2012 M/S. Ramsarup Industries Ltd.. 6 2.1. In the hearing held today (20.05.2016), the ld Advocate of PNB stated that PNB has filed an appeal before Hon ble AAIFR for seeking clarification on its earlier directions dated 03.12.2014. Hon ble AAIFR vide its order dated 03.12.2014 has set aside the BIFR s order dated 19.02.2014 for abatement of the reference of the company and remanded the matter back to BIFR with direction to consider the submission of all the parties and pass order afresh after giving specific findings through a reasoned order as to whether PNB alongwith all other secured creditors on whose behalf it has taken action u/s 13(4) of SARFAESI Act indeed constitute more than 75% of the outstanding debts or not. PNB itself and on behalf of the consortium which constitute more than 75% of total debts, has taken symbolic possession of the assets of the three units of the company. He further stated that in the hearing held on 08.09.2015, the Bench observed that as on date the issue before BIFR is to take a decision on the submission already made by the parties regarding determination percentage of dues of secured creditors of the company, who took action u/s 13 (4) of SARFAESI Act and directed PNB to seek clarification from Hon ble AAIFR on its earlier direction dated 03.12.2014. Hon ble AAIFR vide its order dated 14.12.2015 directed the BIFR to consider the matter in terms of our order dated 03.12.2014 and decide the same within one month after the formation of the Bench and decide the matter in accordance with relevant laws on the subject within stipulated time. He further added that all the secured creditors have already filed their submission and requested the Board to issue reasoned order on the basis of submission. No fresh hearing is required. 2.2. The ld Advocate of the company stated that the total secured debts as per the application filed by PNB is less than 75% as required by law to abate the reference. PNB has not accounted the debts of SIDBI as secured debts for the matter of abatement of reference under SICA, whereas SIDBI is the secured creditor of the company and the company has also shown the name of SIDBI in Form-A. The ld Advocate of PNB in response stated that SIDBI has financed Ramsarup Infrastructure, which does not come under the purview of SICA and hence is not mentioned in Form-A. As such, the debts of SIDBI against the CASE NO. 67/2012 M/S. Ramsarup Industries Ltd.. 7 company cannot be accounted as secured debts for the matter of abatement of reference under SICA. 2.3. On a query from the Bench, the ld Advocate of SIDBI stated that SIDBI has financed the Ramsarup Infrastructure of the company. 2.4. The ld Advocate of ARCIL stated that IDBI, OBC, Karur Vysya Bank, Canara Bank, IOB and CBI have assigned, transferred all their right, title and interest in the financial assets of the company to ARCIL. He further added that since a number of banks have assigned their debts to ARCIL, the entire case should be heard afresh. 3.0. Having considered the submission made during the hearing and material on record, the Bench observed that PNB has not accounted the financial assistance provided by SIDBI for the purpose of calculating the total outstanding secured debts of the company for the matter of abatement reference. Accordingly, the Bench issued the following directions:
(i) SIDBI to submit all relevant documents pertaining to financial assistance provided to the company within a period of one week.
(ii) A Senior Officer from SIDBI to be present in the next date of hearing.
(iii) All the parties to come prepare in the next date of hearing for final argument for abatement of the reference of the company.
(iv) The next date of hearing is fixed on 27.05.2016. (DR.SHASHANK SAKSENA) (ASHISH KALIA) MEMBER CHAIRMAN