The Allahabad High Court has directed the Industrial Development Bank of India (IDBI) to consider the representation made by Sanjiv Aggarwal, a founder-director of Tirupati Inks Ltd., who has questioned the bank’s decision to declare him a wilful defaulter.
Through couple of orders dated August 6 and September 15, IDBI sought to declare him a wilful defaulter and demanded payment of a little over ₹48 crore within 15 days. The bank also warned him that it would publish his name as wilful defaulter should he fail to make the payment.
After hearing arguments on both sides, the Allahabad High Court said that operation of August 2 and September 15 orders of the bank would be kept in abeyance “and shall be subject to any final order which may be passed by the respondents”.
Abhinav Gaur, Anoop Trivedi and Abhishek Tripathi represented the petitioner in this case. BSE-listed Tirupati Inks is currently under liquidation following an order passed by the National Company Law Tribunal.
The origin of the case could be traced to sometime in December 2016 when IDBI served a notice on the petitioner under Section 13 (2) of the SARFAESI Act demanding payment of outstanding amount to the tune of over ₹34 crore. The company was by then referred to BIFR (Board of Industrial and Financial Reconstruction). Citing this, the petitioner had contended that a member of the lending consortium could not independently initiate any measure under the SARFAESI Act. This was more so especially since the company was under the revival process under Section 15 (1) of SICA.
However, the petitioner was served with insolvency resolution notice and subsequently wilful defaulter warning notice.
The move to include the petitioner name to Tirupati Inks CIBIL/CICs list of wilful defaulters forced the petitioner to move the High Court. This High Court order in this instance could yet prove a precedent in similar other cases.