Hc Stays Criminal Case Vs Arvind

The Gujarat High Court has stayed a criminal complaint filed in Ahmedabad by Commerzbank AG against principal officers of Arvind Mills Ltd.

Earlier on June 13, the high court had issued an injunction restraining Commerzbank and Bank of Nova Scotia from proceeding with a civil suit filed by them against Arvind MIlls in the London High Court.

Arvind Mills' chief financial officer Jayesh Shah said, "Following the injunction, the banks, through their counsel, agreed to adjourn the case against the company and ICICI till the outcome of the Scheme of Arrangement filed in the high court."

In its petition to quash the criminal complaint and the order of the magistrate, Arvind Mills stated that the case filed by the bank is an abuse of the judicial process to pressure the company to make preferential and higher payments to the bank.

Admitting that the transactions disputed by the bank are valid, the company pointed out that assuming there was an issue, it should have been a matter of civil suit and not a criminal complaint.

Citing media reports that appeared even before the company and its officers were served with a notice, Arvind Mills said that this was done to destabilise the restructuring process and scare away the creditors who were otherwise supporting the proposal.

With both the civil and criminal complaints stayed, Arvind Mills now expects the Scheme of Arrangement, filed under section 391 of the Companies Act to go through smoothly.