Suzuki Parasrampuria Suitings Pvt. Ltd. Vs. The Official Liquidator of Mahendra Petrochemicals Ltd. and Ors. - (Supreme Court) (08 Oct 2018)
A litigant can take different stands at different times but cannot take contradictory stands in the same case
The Appellant is an assignee of debt by the Industrial Finance Corporation of India Ltd. ("IFCI") for the outstanding of Mahendra Petrochemicals Ltd. It is aggrieved by the Appellate order declining to interfere with the orders of the Company Judge in Company Application and also the order dated 7th September, 2015, declining to recall/review the order dated 31st July, 2015. The question which is required to be considered in present application is as to whether the Applicant can be permitted to be substituted for and in place of IFCI Limited as the secured creditor of the company in liquidation.
In view of the provisions contained in the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act), when the Applicant company is not a bank or banking or financial institution or securitization company or reconstruction company, the Applicant cannot be permitted to be substituted in place of IFCI as secured creditor for the purpose of SARFAESI Act.
The provisions of Section 130 of the Transfer of Property Act, 1882 are not applicable to the facts of the present case as the IFCI has transferred the debts of the company in liquidation in favour of the Applicant by deed of assignment and therefore, the case of the Applicant is that it may be permitted to proceed against the company in liquidation under the SARFAESI Act as secured creditor. The applicant is not entitled to get any benefit under the SARFAESI Act and cannot be termed as secured creditor. Hence, the reliance placed by Applicant on the provisions of Section 130 of the Act, is misconceived.
The Appellant initially took a conscious and considered stand before the Company Judge, staking a claim for being substituted as a secured creditor under the SARFAESI Act consequent to the assignment of debt to it by the IFCI. After the claim of the Appellant of being a secured creditor was rejected by the Company Judge, and the Appellant realised the un-sustainability of its claim in the law, it made a complete volte face from its earlier stand and surprisingly, contrary to its own pleadings, now contended that it had never sought the status of a secured creditor under the SARFAESI Act.
The recitals in the order sheet with regard to what transpired before the High Court are sacrosanct. A litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands. Appeal dismissed.
Tags : SUBSTITUTION SECURED CREDITOR ENTITLEMENT