Bombay HC dismisses winding up petition against Ruchi Soya

The Bombay High Court has dismissed the winding up petition against Ruchi Soya Industries Ltd. filed by IDFC Bank Ltd.

The order of dismissal was pronounced on February 14, 2017 after hearing arguments from both sides. IDBI Bank Ltd., as leader of the consortium of lending banks, had pleaded itself as an intervener in the proceedings and opposed the winding up petition.

The petition before the Hon'ble Court by IDFC Bank was filed in July 2016 in relation to an outstanding loan of Rs. 200 crore under the provision of the Companies Act 1956. The judgement by the Hon'ble Court in point 115 recorded that: "Powers of the Company Court under Section 539 of the Companies Act, 1956 are discretionary and have to be exercised cautiously and judiciously. In the facts of this case, I am satisfied that the respondent-company which has a temporary setback and is making a sincere attempt of its revival with the assistance of large number of the creditors, it would not be desirable and in the interest of all the creditors including the petitioner to pass any order of winding up against the respondent-company at this stage."

As part of its judgement, the Hon'ble Court has stated that "If the petitioner proposes to file any proceedings for recovery of its legitimate dues, in accordance with the decision, if any, of the Joint Lender Forum, the said proceedings to be decided on its own merits without being influenced by the observations made by this Court in this order."

Commenting on the judgement, the spokesperson of Ruchi Soya said, "We are relieved by the judgement of the Hon'ble Bombay High Court and will continue our efforts to work with our lenders including IDFC Bank to overcome the challenges being faced by the company. Our discussions with the Joint Lender Forum has been progressive and we are confident of a resolution of the various issues."

Mr. Ravi Kadam was the Senior Counsel for IDFC Bank while. Ruchi Soya was represented by Senior Counsel Mustafa Doctor.