The Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has admitted the appeal of Kotak Mahindra Bank Ltd against the Board of Industrial and Financial Reconstruction (BIFR) orders refusing to accept it as a party in the JK Cotton Spinning and Weaving Mills Co Ltd case.
The case has been listed for hearing tomorrow. The BIFR gave orders on Kotak’s representation that charge should be created on the assets in their favour “because they had taken over the debts of the company from the ICICI bank through an assignment.”
The BIFR rejected it on the grounds that the “sanctioned scheme does not envisage charge creation.”
Further, it upheld JK’s plea that the loans the company applied for were not negotiable under the documents executed by the company and it was done without its consent, and the permission of the BIFR was not taken by either party.
On this basis, the BIFR had refused to pass orders on Kotak’s plea and it ordered that “no notice would be issued in future for Kotak Mahindra Bank participation as the board had not approved the arrangement,” thus denying it of any status, locus standi in the matter.
Kotak Mahindra Bank appealed to the AAIFR to get the orders of March 27 meeting reversed.
Stakeholders are keenly watching the outcome because a quick disposal of the case will accelerate the process of reopening of ills.
Hearing on Kotak case appeal today
Vijay Chawla / New Delhi/ Kanpur Jun 13, 2006, 23:07 IST
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