Gujarat High Court
Sun Pharmaceutical Industries Limited vs State Bank Of India & on 13 October, 2017
Author: S.G. Shah
Bench: S.G. Shah
C/SCA/19228/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 19228 of 2017
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SUN PHARMACEUTICAL INDUSTRIES LIMITED....Petitioner(s)
Versus
STATE BANK OF INDIA & 1....Respondent(s)
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Appearance:
MR MIHIR THAKORE, SR. COUNSEL with MS MEGHA JANI,
ADVOCATE for the Petitioner(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE S.G. SHAH
Date : 13/10/2017
ORAL ORDER
1. The petitioner has come forward with a simple case that respondent no.1 - Bank has acted purely against basic principles of natural justice and commercial transactions which are purely based upon commitment amongst the parties who are involved in such transaction.
2. It is undisputed fact that petitioner has agreed to purchase the Gujarat NRE Coke Limited (hereinafter referred to as "GNRE") which is in debt of the respondent - Bank. For the purpose, respondent - Bank has by its letter dated Page 1 of 5 HC-NIC Page 1 of 5 Created On Sat Oct 14 01:44:23 IST 2017 C/SCA/19228/2017 ORDER 7.11.2016 conveyed the petitioner that they are pleased to inform the petitioner that its bid for purchase of assets of GNRE is acceptable to the lenders amongst which respondent No.1 Bank is one of the lender and, thereby respondent has declared the petitioner as successful bidder subject to certain conditions. Amongst all other conditions, at present, we are concerned with the condition which confirms that the petitioner is required to pay 25% of the bid amount as mentioned in the bid as an upfront payment within 7 days from the date of such communication on non refundable basis (upfront consideration). However, that is only in the event where NOC for sale of the assets is not received from all lenders within 60 days from the date of receipt of upfront consideration; then the upfront consideration will be refunded to the petitioner without any interest and petitioner will not help the respondents on behalf of all the lenders liable in claim or objection for non receipt of any NOC or for any matter whatsoever. It is undisputed fact that when petitioner has completed the payment of 25% of the amount as aforesaid, on 31.10.2016, the Page 2 of 5 HC-NIC Page 2 of 5 Created On Sat Oct 14 01:44:23 IST 2017 C/SCA/19228/2017 ORDER respondent - Bank has never objected the receipt of such payment or to rescind their offer and accepted such amount without any objection. It is undisputed fact that thereby by all means, respondent with all the lenders is liable to provide NOC to the petitioner either before 7.12.2016 or at least from the date of such payment being 31.10.2016, on or before 31.12.2016. It is undisputed fact that such NOC was furnished only on 12.4.2017 i.e. after executing the agreement for sale of bid assets between GNRE and petitioner on 1.4.2017. Such NOC was forwarded to the petitioner with letter dated 12.4.2017; copy of which is placed on record at Annexure `M' - page No.71 whereby respondent has conveyed the petitioner that they should extend the period of Bank Guarantee which was issued in favour of the Bank till 30.4.2017.
3. However, before such date, the GNRE had already preferred the Company Petition No.182 of 2017 before the National Company Law Tribunal (hereinafter referred to as "NCLT") under Section 10(1) of the Insolvency and Bankruptcy Code, 2016 wherein the Page 3 of 5 HC-NIC Page 3 of 5 Created On Sat Oct 14 01:44:23 IST 2017 C/SCA/19228/2017 ORDER Tribunal has passed order on 7.4.2017 prohibiting transferring, encumbering, alienating or disposing off of any assets or any legal right or beneficial interest by the corporate debtor namely; GNRE.
4. Thereby, when Bank has admitted in their reply dated 8.9.2017 to the legal notice of the petitioner that agreement to sell dated 1.4.2017 was executed between the parties and, therefore, Bank is entitled to encash the Bank Guarantee, it seems that Bank has with full knowledge of insolvency proceedings and other activities by its debtor continued to hold the bid amount by the petitioner and tried to encash the bank guarantee. It is now undisputed fact that on one hand, respondent wants to encash the bank guarantee as a purchase price of the properties which is prohibited to be alienated by the NCLT. Therefore, when petitioner has come forward with a case that they have already conveyed the Bank as back as on 18.8.2017 that they would withdraw proposal of GNRE and demanded refund 25% of deposit alongwith interest, it would not be appropriate for the Bank Page 4 of 5 HC-NIC Page 4 of 5 Created On Sat Oct 14 01:44:23 IST 2017 C/SCA/19228/2017 ORDER to press for encashing the bank guarantee even if NCLT has thereafter allowed the sale transaction by its order dated 22.8.2017.
5. In view of above facts and circumstances, there is prima facie case in favour of the petitioner. Hence, NOTICE, returnable on 7.11.2017 with Interim Relief in terms of Paragraph 9(C) till then. However, with condition that petitioner shall continue to validate such bank guarantee till pendency of this litigation or till such further order.
6. Direct Service, today, is permitted.
(S.G. SHAH, J.) * Kotecha Page 5 of 5 HC-NIC Page 5 of 5 Created On Sat Oct 14 01:44:23 IST 2017