Delhi HC okays IFCI sale of Haryana Steel''s NPAs
08 Dec 2006
A division bench of the high court upheld the decision by a single judge bench, which was challenged by HSAL, seeking that IFCI be restrained to sell its non-performing assets to Kotak Mahindra Bank, the highest bidder with an offer of Rs5 crore.
HSAL had sought court directions to IFCI that it should reconsider one time settlement (OTS) offer of Rs5.02 crore instead of selling the company''s assets. HSAL, however, had failed to convincingly prove that it stands to lose the NPAs being sold by IFCI to Kotak. The company only made a statement that the sale of NPAs would depress its net worth.
While dismissing HSAL''s appeal, the bench comprising chief justice M K Sharma and justice Hima Kohli declined to interfere with IFCI''s decision to sell HSAL''s NPAs to Kotak, saying otherwise it would not be able to recover its dues. "No writ lies for directing OTS or rescheduling of loan or fixing installments in connection with the loan," the judgement added.
The bench said IFCI was entitled to sell its NPAs to any other banking or financial institution as per the RBI guidelines.
"The appellant (HSAL) cannot be permitted to treat the OTS as a bonanza in reserve, which it may unilaterally encash at any point of time," the judgment noted.
IFCI had, in March this year, made an offer to HSAL to pay Rs3.26 crore as a one-time settlement. The company lost that opportunity, for which it has itself to blame, the court observed.