Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on : 08.07.2014
+ W.P.(C) 2385/2012
DENA BANK ..... Petitioner
Through : Sh. Ramesh Kumar, Advocate.
versus
AAIFR & ORS. ..... Respondents
Through : Sh. Dilip Kumar Sharma, AR, for
Resp. No.2.
Ms. Soma Mullick, Advocate, for Resp.
No.3.
Sh. S.K. Tanwar, Advocate, for Resp. No.6.
Sh. Nitesh Jain, Advocate, for Resp. No.9.
Ms. Kittu Bajaj and Sh. Izhar Ahmad,
Advocate, for Resp. No.12.
Ms. Dolly Sharma, Advocate, for Resp.
No.17.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. Heard counsel for the parties.
2. The petitioner is aggrieved by an order of the Appellate
Authority for Industrial and Financial Reconstruction (AAIFR)
W.P.(C)2385/2012 Page 1
dated 30.12.2011, which held that the proceedings before Board
for Industrial and Financial Reconstruction (BIFR) had not
abated.
3. The brief facts are that M/s. Rajat Pharmachem Ltd., the
second respondent had availed of credit facilities from various
banks, including the petitioner bank. The petitioner bank had
inter alia extended these credit facilities in February 2007. The
transaction was secured through mortgage of the borrower’s
property by deposit of title deeds on 15.06.2007. It is averred
that the petitioner enhanced the credit limits, subsequent to
requests by the respondent through letters dated 12.05.2008 and
13.08.2008. Subsequently, its loans were even restructured in
January 2009.
4. While so, the respondent borrower approached the BIFR
in terms of Sick Industrial Companies (Special Provisions) Act,
1985 (SICA) on 02.04.2009. This reference was registered on
09.04.2009. Thereafter on 02.07.2009, the bank issued a notice
under Section 13(2) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI), demanding an amount in excess of 36.5 crores;
`
upon non-compliance, measures under Section 13(4) of the
SARFAESI were sought to be taken through a notice. The
respondent borrower, aggrieved by this, approached the Debt
Recovery Tribunal (DRT) under Section 17 of the SARFAESI
on 16.09.2009. This led to the order dated 22.09.2009 by the
W.P.(C)2385/2012 Page 2
DRT, directing status quo with respect to the said property
which is a subject matter of this case. The DRT modified the
said order of stay on 18.02.2010 and clarified that all action
under Section 13(4) of the SARFAESI were stayed.
5. In the meanwhile, the petitioner bank moved an
application before the BIFR, contending that the proceedings
before it had abated. After hearing the parties, which included
the creditor banks and other third parties interested, such as the
Employees’ Provident Fund Organization (EPFO) and other
statutory creditors, the BIFR held that the proceedings had
abated. Its observations inter alia are to the following effect:
“16. Having considered the facts on record and the
submissions made in today’s hearing, the Bench
observed that Dena Bank, representing not less than
three-fourth of the secured loan outstanding against
the company, had taken possession of the company’s
assets u/s 13(4) of the SARFAESI Act, 2002 on
12.9.2009. All the secured and unsecured creditors
present in the hearing supported the action taken by
Dena Bank u/s 13(4) of the SARFAESI Act, 2002.
DRT, Mumbai vide its order dated 17.9.2009 directed
for maintenance of status quo in the matter.
Therefore, the possession of the assets of the company
remained with Dena Bank and the action u/s 13(4) of
the SARFAESI Act, 2002 was complete. The order of
the Hon’ble Orissa High Court in the case of M/s.
Nobel Aqua Pvt. Ltd. and Ors. v. SBI did not apply to
the instant case, as the company was yet to be
declared sick. The Bench relied on the orders of the
Hon’ble Delhi High Court in the case of PNB & Ors.
and the Hon’ble Kerala High Court in the case of SBI
v. M/s. Prima Agro Ltd. (WPC No. 27033 of 2008)
W.P.(C)2385/2012 Page 3
dated 9.7.2009. The Bench noted that the Hon’ble
Kerala High Court, after distinguishing/disagreeing
with Hon’ble Orissa High Court judgment held that
once action u/s 13(4) of SARFAESI is taken, reference
rd
to BIFR abates under 3 proviso of Section 15(1) of
SICA at any stage of the proceeding but certainly in
cases when company has not yet been declared sick.
The Hon’ble Kerala High Court further held that once
reference before BIFR has abated in this manner,
even Hon’ble AAIFR has no jurisdiction to entertain
an appeal against the formal recording of the factum
of abatement by BIFR. The Bench hence abated the
reference filed by the company under third proviso to
Section 15(1) of the SARFAESI Act, 2002.”
6. The respondent borrower approached the AAIFR,
contending that the order of the BIFR was contrary to law. Its
contention was that in view of the petitioner bank approaching
the Debts Recovery Appellate Tribunal (DRAT) against the
status quo order dated 22.09.2009, the measure under Section
13(4) of the SARFAESI could not be said to have been taken.
The AAIFR took note of this contention and held as follows:
“8. The question that arises for consideration is
whether the stay granted by the DRT in the present
case would nullify or invalidate the action that had
already been taken by Dena Bank u/s 13(4) of
SARFAESI Act. A perusal of the record of this case
shows that the appellant company had filed an appeal
u/s 17 of the SARFAESI Act before the DRT-I,
Mumbai, which is registered as S.A. No. 12/2009. The
DRT, Mumbai, vide its order dated 22.09.2009
directed the parties to maintain status quo and the
said order was continued vide DRT’s order dated
11.01.2010 wherein the same was confirmed and
extended till disposal of S.A. No. 12/2009. Thereafter,
W.P.(C)2385/2012 Page 4
the order dated 22.09.2009 was modified by DRT-I,
Mumbai vide its order dated 18.02.2010 wherein the
DRT held as follows:
“Therefore, I am of the view that the
order passed by this Tribunal dated
11.01.2010 is required to be modified to the
extent that the order dated 11.01.2010
means and includes that all action under
Section 13(4) of the SARFAESI Act are
stayed until final disposal of S.A. No.
12/2009 including valuing the secured
assets under the said Act.”
9. Clearly, by the above order, the DRT has stayed
until final disposal of S.A. No. 12/2009 all actions u/s
13(4) of the SARFAESI Act. Section 13(4) of the
SARFAESI Act envisages that in case the borrower
fails to discharge his liability in full within the period
specified in sub-section (2), the secured creditor may
take recourse to one or more of the measures
enumerated in the Section to recover his secured debt.
The measures are enumerated at 13(4)(a), (b), (c) and
(d) which include taking possession of the secured
assets of the borrower including the right to transfer by
way of lease, assignment or sale for realizing the
secured asset. Since the DRT has stayed all actions
under Section 13(4), it means that the action taken by
Dena Bank u/s 13(4) in terms of taking possession of
the charged assets of the appellant company has also
been stayed and this implies that till such time as the
stay is lifted, there is no effective action u/s 13(4) of the
SARFAESI Act. In our opinion, such a stay will nullify
or invalidate the action already taken by the Dena
Bank, even though at the point of time when the
impugned order was passed the order dated 18.02.2010
had not been passed. However, thereafter, the DRT
modified its order and stayed all actions u/s 13(4) of
W.P.(C)2385/2012 Page 5
the SARFAESI Act. Therefore, since Section 13(4)
action has been stayed, the reference would not abate.
10. In view of our above findings on the
preliminary objection raised by the appellant company,
we do not consider it necessary to go into the merits of
other contentions raised by the appellant company.
Therefore, in this event, the abatement of the reference
will not be justified. We, therefore, set aside the
impugned order and direct the BIFR to take further
necessary action according to law.”
7. Learned counsel for the petitioner urges that the
impugned order and the reasoning of the AAIFR is
unsustainable. It is submitted that so long as the measures
contemplated under Section 13(4) of the SARFAESI are taken
and the satisfaction recorded in the form of secured creditors,
th
representing not less than 3/4 of the amount outstanding,
agreeing to the abatement of the proceedings under SICA, no
further enquiry can be gone into. It was submitted in this regard
that if measures under Section 13(4) of SARFAESI to recover
the secured debt and under Section 15(1) of SICA were to
depend upon the vagaries and intricacies of litigation initiated at
the behest of borrower or even the creditor to resist the order,
there would be no certainty about the objective event. Arguing
that such fact is dependent upon interpretation of Section 15(1)
would defeat the intention expressed by the legislature, learned
counsel submitted that the scope of enquiry ought to be limited
th
to whether the secured creditors entitled to recover 3/4 of the
value of the outstanding amounts, had consented to the
W.P.(C)2385/2012 Page 6
abatement of the proceedings or not. As long as that is done,
and the Section 13(4) measures are said to have been initiated,
there can be no question of the continuation of the proceedings.
Learned counsel for the respondents urged that the petitioner
bank had itself approached the DRAT, complaining against the
said order of the DRT, made in September 2009. Those
proceedings have not concluded. In these circumstances, when
the validity of conditions under Section 13(4) is itself doubtful,
the question whether proceedings by the bank under SICA have
abated, cannot arise. Learned counsel also relied upon the
recent ruling of this Court in M/s. Global Infrastructure v.
Kotak Mahindra Bank Ltd. and Ors. in W.P.(C) 4862/2013
(decided on 16.04.2014), to state that the conditions of Section
15(1) have to be satisfied before an abatement can be inferred.
In the present case, the borrower appears to have approached
the BIFR just before the proceedings under SARFAESI were
initiated by the petitioner bank. In fact, the registration of this
application under SICA took place on 09.04.2009. The notice
under Section 13(2), demanding the outstanding amounts was
issued on 02.07.2009; much close on its heels, the bank issued
notice under Section 13(4). No doubt, the DRT, upon being
approached by the borrower, directed a status quo. However, in
the opinion of this Court, mere direction to maintain status quo
vis-a-vis a particular property would not mean that the legal
effect of the notice has been effaced – at least that is the
essential purport or intent of third proviso to Section 15(1) of
W.P.(C)2385/2012 Page 7
SICA. The Court notices that the intention of the Parliament
while enacting the third proviso to Section 15(1) of SICA was
to avoid possible conflict between the provisions of SICA and
SARFAESI given that both could potentially be construed as
special enactments and that there was a degree of overlap,
especially in the case of sick industrial debtors. To obviate this
conflict, an express provision, making abatement conditional
rather than universal was provided for. In terms of the third
proviso to Section 15(1) of the SICA read with Section 40(1) of
SARFAESI, the proceedings would be deemed to abate if and
only if secured creditors, where more than one exists obviously,
th
who are entitled to recover at least 3/4 or more of the
outstanding amounts, consent to such step. In other words,
where there is more than one secured creditor who is entitled to
a certain amount, the consent of such of the creditors who
th
would be entitled to recover not less than 3/4 value of the
outstanding disbursed to the borrower, alone can dictate
whether proceedings under BIFR can continue or not. In the
present case, this objective factor alone – apart from the
measures to be taken under Section 13(4) was the subject matter
of enquiry before the BIFR. As is evident from the extract of
the BIFR’s order, all the secured creditors unanimously
consented to the abatement of the proceedings. In these
circumstances, the submission of the borrower that the
th
petitioner did not represent the views of the 3/4 or more of
such secured creditors has no force. In the absence of any
W.P.(C)2385/2012 Page 8
special form or proceeding to record such consent, it has to be
held that if such consent is expressed in the course of
proceedings, especially before the BIFR or any other authority
under the SICA, such consent is deemed valid.
8. As far as the main contention – which apparently found
favour with the AAIFR – with respect to the status quo order
which operated in respect of Section 13(4) notice is concerned,
this Court is of the opinion that the reasoning is meritless. The
validity of Section 13(4) or for that matter any statutory matter
cannot be judged on the basis of what an interim order states or
purports to state. An interim order is only an aid or an
arrangement which entitles the parties to the main proceedings,
to work-out the modalities till final adjudication. Till the
measures themselves are set-aside under Section 13(4), it
cannot be said to be invalid or illegal. It goes without saying
that a statutory order, till declared to be so in a legally
constituted proceedings, would have to be accepted and given
effect to (refer State of Punjab and Ors. v. Gurdev Singh 1991 4
SCC 1). For these reasons, the observations of the AAIFR to the
contrary, are held to be without force.
9. For the foregoing reasons, the impugned order is set-
aside. It is held that the proceedings before BIFR stood abated
upon the service of the notice under Section 13(4).
10. The concerned DRT is hereby directed to proceed with
the main appeal preferred by the respondent borrower under
W.P.(C)2385/2012 Page 9
Section 17 and pronounce its final orders within three months
from today. The writ petition is allowed in the above terms.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
JULY 8, 2014
W.P.(C)2385/2012 Page 10
Decided on : 08.07.2014
+ W.P.(C) 2385/2012
DENA BANK ..... Petitioner
Through : Sh. Ramesh Kumar, Advocate.
versus
AAIFR & ORS. ..... Respondents
Through : Sh. Dilip Kumar Sharma, AR, for
Resp. No.2.
Ms. Soma Mullick, Advocate, for Resp.
No.3.
Sh. S.K. Tanwar, Advocate, for Resp. No.6.
Sh. Nitesh Jain, Advocate, for Resp. No.9.
Ms. Kittu Bajaj and Sh. Izhar Ahmad,
Advocate, for Resp. No.12.
Ms. Dolly Sharma, Advocate, for Resp.
No.17.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. Heard counsel for the parties.
2. The petitioner is aggrieved by an order of the Appellate
Authority for Industrial and Financial Reconstruction (AAIFR)
W.P.(C)2385/2012 Page 1
dated 30.12.2011, which held that the proceedings before Board
for Industrial and Financial Reconstruction (BIFR) had not
abated.
3. The brief facts are that M/s. Rajat Pharmachem Ltd., the
second respondent had availed of credit facilities from various
banks, including the petitioner bank. The petitioner bank had
inter alia extended these credit facilities in February 2007. The
transaction was secured through mortgage of the borrower’s
property by deposit of title deeds on 15.06.2007. It is averred
that the petitioner enhanced the credit limits, subsequent to
requests by the respondent through letters dated 12.05.2008 and
13.08.2008. Subsequently, its loans were even restructured in
January 2009.
4. While so, the respondent borrower approached the BIFR
in terms of Sick Industrial Companies (Special Provisions) Act,
1985 (SICA) on 02.04.2009. This reference was registered on
09.04.2009. Thereafter on 02.07.2009, the bank issued a notice
under Section 13(2) of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI), demanding an amount in excess of 36.5 crores;
`
upon non-compliance, measures under Section 13(4) of the
SARFAESI were sought to be taken through a notice. The
respondent borrower, aggrieved by this, approached the Debt
Recovery Tribunal (DRT) under Section 17 of the SARFAESI
on 16.09.2009. This led to the order dated 22.09.2009 by the
W.P.(C)2385/2012 Page 2
DRT, directing status quo with respect to the said property
which is a subject matter of this case. The DRT modified the
said order of stay on 18.02.2010 and clarified that all action
under Section 13(4) of the SARFAESI were stayed.
5. In the meanwhile, the petitioner bank moved an
application before the BIFR, contending that the proceedings
before it had abated. After hearing the parties, which included
the creditor banks and other third parties interested, such as the
Employees’ Provident Fund Organization (EPFO) and other
statutory creditors, the BIFR held that the proceedings had
abated. Its observations inter alia are to the following effect:
“16. Having considered the facts on record and the
submissions made in today’s hearing, the Bench
observed that Dena Bank, representing not less than
three-fourth of the secured loan outstanding against
the company, had taken possession of the company’s
assets u/s 13(4) of the SARFAESI Act, 2002 on
12.9.2009. All the secured and unsecured creditors
present in the hearing supported the action taken by
Dena Bank u/s 13(4) of the SARFAESI Act, 2002.
DRT, Mumbai vide its order dated 17.9.2009 directed
for maintenance of status quo in the matter.
Therefore, the possession of the assets of the company
remained with Dena Bank and the action u/s 13(4) of
the SARFAESI Act, 2002 was complete. The order of
the Hon’ble Orissa High Court in the case of M/s.
Nobel Aqua Pvt. Ltd. and Ors. v. SBI did not apply to
the instant case, as the company was yet to be
declared sick. The Bench relied on the orders of the
Hon’ble Delhi High Court in the case of PNB & Ors.
and the Hon’ble Kerala High Court in the case of SBI
v. M/s. Prima Agro Ltd. (WPC No. 27033 of 2008)
W.P.(C)2385/2012 Page 3
dated 9.7.2009. The Bench noted that the Hon’ble
Kerala High Court, after distinguishing/disagreeing
with Hon’ble Orissa High Court judgment held that
once action u/s 13(4) of SARFAESI is taken, reference
rd
to BIFR abates under 3 proviso of Section 15(1) of
SICA at any stage of the proceeding but certainly in
cases when company has not yet been declared sick.
The Hon’ble Kerala High Court further held that once
reference before BIFR has abated in this manner,
even Hon’ble AAIFR has no jurisdiction to entertain
an appeal against the formal recording of the factum
of abatement by BIFR. The Bench hence abated the
reference filed by the company under third proviso to
Section 15(1) of the SARFAESI Act, 2002.”
6. The respondent borrower approached the AAIFR,
contending that the order of the BIFR was contrary to law. Its
contention was that in view of the petitioner bank approaching
the Debts Recovery Appellate Tribunal (DRAT) against the
status quo order dated 22.09.2009, the measure under Section
13(4) of the SARFAESI could not be said to have been taken.
The AAIFR took note of this contention and held as follows:
“8. The question that arises for consideration is
whether the stay granted by the DRT in the present
case would nullify or invalidate the action that had
already been taken by Dena Bank u/s 13(4) of
SARFAESI Act. A perusal of the record of this case
shows that the appellant company had filed an appeal
u/s 17 of the SARFAESI Act before the DRT-I,
Mumbai, which is registered as S.A. No. 12/2009. The
DRT, Mumbai, vide its order dated 22.09.2009
directed the parties to maintain status quo and the
said order was continued vide DRT’s order dated
11.01.2010 wherein the same was confirmed and
extended till disposal of S.A. No. 12/2009. Thereafter,
W.P.(C)2385/2012 Page 4
the order dated 22.09.2009 was modified by DRT-I,
Mumbai vide its order dated 18.02.2010 wherein the
DRT held as follows:
“Therefore, I am of the view that the
order passed by this Tribunal dated
11.01.2010 is required to be modified to the
extent that the order dated 11.01.2010
means and includes that all action under
Section 13(4) of the SARFAESI Act are
stayed until final disposal of S.A. No.
12/2009 including valuing the secured
assets under the said Act.”
9. Clearly, by the above order, the DRT has stayed
until final disposal of S.A. No. 12/2009 all actions u/s
13(4) of the SARFAESI Act. Section 13(4) of the
SARFAESI Act envisages that in case the borrower
fails to discharge his liability in full within the period
specified in sub-section (2), the secured creditor may
take recourse to one or more of the measures
enumerated in the Section to recover his secured debt.
The measures are enumerated at 13(4)(a), (b), (c) and
(d) which include taking possession of the secured
assets of the borrower including the right to transfer by
way of lease, assignment or sale for realizing the
secured asset. Since the DRT has stayed all actions
under Section 13(4), it means that the action taken by
Dena Bank u/s 13(4) in terms of taking possession of
the charged assets of the appellant company has also
been stayed and this implies that till such time as the
stay is lifted, there is no effective action u/s 13(4) of the
SARFAESI Act. In our opinion, such a stay will nullify
or invalidate the action already taken by the Dena
Bank, even though at the point of time when the
impugned order was passed the order dated 18.02.2010
had not been passed. However, thereafter, the DRT
modified its order and stayed all actions u/s 13(4) of
W.P.(C)2385/2012 Page 5
the SARFAESI Act. Therefore, since Section 13(4)
action has been stayed, the reference would not abate.
10. In view of our above findings on the
preliminary objection raised by the appellant company,
we do not consider it necessary to go into the merits of
other contentions raised by the appellant company.
Therefore, in this event, the abatement of the reference
will not be justified. We, therefore, set aside the
impugned order and direct the BIFR to take further
necessary action according to law.”
7. Learned counsel for the petitioner urges that the
impugned order and the reasoning of the AAIFR is
unsustainable. It is submitted that so long as the measures
contemplated under Section 13(4) of the SARFAESI are taken
and the satisfaction recorded in the form of secured creditors,
th
representing not less than 3/4 of the amount outstanding,
agreeing to the abatement of the proceedings under SICA, no
further enquiry can be gone into. It was submitted in this regard
that if measures under Section 13(4) of SARFAESI to recover
the secured debt and under Section 15(1) of SICA were to
depend upon the vagaries and intricacies of litigation initiated at
the behest of borrower or even the creditor to resist the order,
there would be no certainty about the objective event. Arguing
that such fact is dependent upon interpretation of Section 15(1)
would defeat the intention expressed by the legislature, learned
counsel submitted that the scope of enquiry ought to be limited
th
to whether the secured creditors entitled to recover 3/4 of the
value of the outstanding amounts, had consented to the
W.P.(C)2385/2012 Page 6
abatement of the proceedings or not. As long as that is done,
and the Section 13(4) measures are said to have been initiated,
there can be no question of the continuation of the proceedings.
Learned counsel for the respondents urged that the petitioner
bank had itself approached the DRAT, complaining against the
said order of the DRT, made in September 2009. Those
proceedings have not concluded. In these circumstances, when
the validity of conditions under Section 13(4) is itself doubtful,
the question whether proceedings by the bank under SICA have
abated, cannot arise. Learned counsel also relied upon the
recent ruling of this Court in M/s. Global Infrastructure v.
Kotak Mahindra Bank Ltd. and Ors. in W.P.(C) 4862/2013
(decided on 16.04.2014), to state that the conditions of Section
15(1) have to be satisfied before an abatement can be inferred.
In the present case, the borrower appears to have approached
the BIFR just before the proceedings under SARFAESI were
initiated by the petitioner bank. In fact, the registration of this
application under SICA took place on 09.04.2009. The notice
under Section 13(2), demanding the outstanding amounts was
issued on 02.07.2009; much close on its heels, the bank issued
notice under Section 13(4). No doubt, the DRT, upon being
approached by the borrower, directed a status quo. However, in
the opinion of this Court, mere direction to maintain status quo
vis-a-vis a particular property would not mean that the legal
effect of the notice has been effaced – at least that is the
essential purport or intent of third proviso to Section 15(1) of
W.P.(C)2385/2012 Page 7
SICA. The Court notices that the intention of the Parliament
while enacting the third proviso to Section 15(1) of SICA was
to avoid possible conflict between the provisions of SICA and
SARFAESI given that both could potentially be construed as
special enactments and that there was a degree of overlap,
especially in the case of sick industrial debtors. To obviate this
conflict, an express provision, making abatement conditional
rather than universal was provided for. In terms of the third
proviso to Section 15(1) of the SICA read with Section 40(1) of
SARFAESI, the proceedings would be deemed to abate if and
only if secured creditors, where more than one exists obviously,
th
who are entitled to recover at least 3/4 or more of the
outstanding amounts, consent to such step. In other words,
where there is more than one secured creditor who is entitled to
a certain amount, the consent of such of the creditors who
th
would be entitled to recover not less than 3/4 value of the
outstanding disbursed to the borrower, alone can dictate
whether proceedings under BIFR can continue or not. In the
present case, this objective factor alone – apart from the
measures to be taken under Section 13(4) was the subject matter
of enquiry before the BIFR. As is evident from the extract of
the BIFR’s order, all the secured creditors unanimously
consented to the abatement of the proceedings. In these
circumstances, the submission of the borrower that the
th
petitioner did not represent the views of the 3/4 or more of
such secured creditors has no force. In the absence of any
W.P.(C)2385/2012 Page 8
special form or proceeding to record such consent, it has to be
held that if such consent is expressed in the course of
proceedings, especially before the BIFR or any other authority
under the SICA, such consent is deemed valid.
8. As far as the main contention – which apparently found
favour with the AAIFR – with respect to the status quo order
which operated in respect of Section 13(4) notice is concerned,
this Court is of the opinion that the reasoning is meritless. The
validity of Section 13(4) or for that matter any statutory matter
cannot be judged on the basis of what an interim order states or
purports to state. An interim order is only an aid or an
arrangement which entitles the parties to the main proceedings,
to work-out the modalities till final adjudication. Till the
measures themselves are set-aside under Section 13(4), it
cannot be said to be invalid or illegal. It goes without saying
that a statutory order, till declared to be so in a legally
constituted proceedings, would have to be accepted and given
effect to (refer State of Punjab and Ors. v. Gurdev Singh 1991 4
SCC 1). For these reasons, the observations of the AAIFR to the
contrary, are held to be without force.
9. For the foregoing reasons, the impugned order is set-
aside. It is held that the proceedings before BIFR stood abated
upon the service of the notice under Section 13(4).
10. The concerned DRT is hereby directed to proceed with
the main appeal preferred by the respondent borrower under
W.P.(C)2385/2012 Page 9
Section 17 and pronounce its final orders within three months
from today. The writ petition is allowed in the above terms.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
JULY 8, 2014
W.P.(C)2385/2012 Page 10