The Karnataka High Court, on Monday, restrained till December 6 the State Bank of India and the companies associated with it from taking possession of “Kingfisher House”, a prime property housing Kingfisher Airlines’ prominent offices in Mumbai.
Justice Anand Byrareddy passed the interim order on a petition filed by the Kingfisher Airlines Limited (KAL) questioning the application, filed by the SBICAP Trustee Company Ltd. before the Chief Metropolitan Magistrate, Esplanade at Mumbai, for taking possession of the property under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.
Abuse of law process
In its petition, KAL has termed the move to take possession of the “Kingfisher House” under the SARFAESI Act as “abuse of process of law” by the banker while contending that the bank, being the secured creditor, could not have filed such an application at Mumbai after approaching the Karnataka High Court by filing a company petition for winding up of the airline.
The KAL also pointed out that the secured creditors, led by the SBI, in a separate petition, have already obtained an interim order on September 3, 2013 from the Karnataka High Court restraining the airline, its promoter UB (Holdings) Ltd. and its managing director from transferring or alienating any of their movable and immovable properties. Claiming that the process of negotiation with prospective investors would be impacted as some crucial process are being undertaken at “Kingfisher House,” the KAL has stated: “In view of the ongoing negotiations with prospective investors, who are at an advanced stage of conducting legal, financial, administrative, secretarial and HR-related due diligence of the KAL, an electronic data room has been set up at Kingfisher House to upload information sought for the due diligence…”
The airline has also told the Court that it would make submission on process of revival of the company during the hearing on the winding up petitions filed by various secured and non-secured companies, which would come up for hearing before the High Court on December 6.