Shridhar Vasudeo Bedekar & Ors vs M/s. V P Bedekar and Sons Private Limited & Ors

Shreesha Merla, Member (T)]

Challenge in this Appeal is to the Impugned Order dated 26.03.2021, passed by the National Company Law Tribunal (‘NCLT’), Mumbai Bench, Special Bench, Court – II, in CA No. 1004/2020 in CP No. 26/241/MB/2018 by which Order, NCLT has permitted the Applicant Company namely M/s. V.P. Bedekar & Sons Private Limited to avail Secured and Unsecured Loans to further their business interest as per the borrowing limits and security approved by the majority of the Board, including Security Facilities offered by Janata Sahakari Bank (‘JS Bank’) Pune.

Ms. C.S. Anagha Anasingaraju representing the Appellant vehemently argued that the NCLT while passing the Impugned Order, has gone one step further giving the Respondent Company blanket permission to borrow Secured and Unsecured Loans and create further liabilities, despite the fact that the Respondent Company is in final distress and there are several outstanding amounts of Sundry Creditors and the Company was in default of payments to these Creditors even as on 31.03.2020. It is further submitted that the Respondents have suppressed material facts in their Application in MA 1004/2020. It is also submitted by Ms. Anagha Anasingaraju that the Order dated 26.03.2021 amounts to modification of the Order dated 15.02.2016 of the Company Law Board (‘CLB’) which was not interfered with by the Hon’ble High Court.

Learned Sr. Counsel Mr. Nakul Dewan appearing for the Respondent submitted that the Appeal is infructuous as JS Bank issued a fresh sanctioned Letter dated 06.07.2021 and Bank of Baroda (‘BOB’) issued a No Due Certificate with respect to the Credit Facilities sanctioned by BOB. Further, Interim Order passed by NCLT on 14.07.2020 allowing the Company to avail the facilities from JS Bank, subject to final Orders of the NCLT and that the Company shall not create any further liability while availing facility, has not been challenged. By the said Order, NCLT disposed of MA4114/2019 as infructuous. It is submitted that the Impugned Order does not amount to review or recall of the 15th February Order as that Order did not impose any restriction on the Company from raising loans.

A brief perusal of the 15th February Order shows that the Order only directed the Respondent to maintain Status Quo with regard to Fixed Assets with a rider that if any necessity is felt to alienate, encumber or dispose of or create any third party rights and/or interests in any Immovable Property including plant and machinery, it may be done only after obtaining prior permission of the Board. The Orders dated 22.04.2016 and 13.10.2016 passed by the Hon’ble Bombay High Court recognize the business needs of the Company and permitted the Company to deal and raise Interim Finance from time to time. It is significant to mention that the Orders passed by Hon’ble Bombay High Court have been passed with consent of both the parties. A perusal of the Applications 3/2017 & 52/2018 in TCP No.26/2014 show that the Company’s Capital Requirements have been recognized and permission granted to deal with its Assets on a lease cum license basis. Therefore, we are of the considered view that the Impugned Order does not amount to review/recall of any of the Orders passed by the Hon’ble High Court of Bombay. The Company is in the business of manufacturing Pickles and Spices and has taken a financial toll during the pandemic and under the sanctioned Letter dated 06.07.2021, the Company had offered the Assets which were already encumbered in favour of JS Bank as security cover for additional facilities.

Regard being had to the fact that MA 4114/2019 was dismissed as infructuous and NCLT had permitted the Respondent Company to avail the Facility from JS Bank and this Order was not challenged, we do not find any substantial grounds in the submissions made by the Appellants.

Furthermore, the main Company Petition is still pending before the NCLT. Having regard to the facts and circumstances of the attendant case, this Appeal is dismissed with a request to the NCLT to decide the main Company Petition 26/241/MB/2018 as expeditiously as practicable, preferably within 6 months from the date of the receipt of this Order.