Case Note & Summary
The applicant, ICICI Bank Limited, sought to be impleaded as a respondent or alternatively to intervene in a company application filed by The Bank of New York Mellon (BNYM) in a winding-up petition against GOL Offshore Limited. BNYM, as trustee for holders of unsecured foreign currency convertible bonds issued by GOL Offshore in 2007, had filed Company Application (L) No.549 of 2013 seeking reliefs in relation to a jack-up rig known as Rig V-351 or Rig Somnath. The court had passed orders on 28th October 2013, 29th November 2013, and 11th December 2013 in that application. ICICI Bank's present application sought leave to be impleaded, modification of the 11th December 2013 order, and further reliefs regarding the rig. The court heard senior counsel for all parties and found that ICICI Bank's claim against GOL Offshore was not yet due and that ICICI Bank was otherwise sufficiently secured. The court held that the application was premature and a hasty attempt to defeat the resolution of BNYM's claim. The court was not persuaded to grant any relief and dismissed the application.
Headnote
A) Company Law - Winding-up Petition - Intervention by Creditor - ICICI Bank, not a party to the winding-up petition, sought impleadment and modification of orders to create security over Rig V-351 - Court held that the application was premature as ICICI Bank's claim was not yet due and it was otherwise sufficiently secured - Held that the application was an unjustified attempt to defeat resolution of BNYM's claim (Paras 1-4).
Issue of Consideration
Whether ICICI Bank, a non-party to the winding-up petition, should be allowed to intervene and seek modification of orders to create additional security over a rig in its favour when it has no pre-existing security over that asset and its claim is not yet due.
Final Decision
The court dismissed Company Application (L) No.68 of 2014, refusing to grant any relief to ICICI Bank.
Law Points
- Intervention in winding-up proceedings
- creation of additional security
- premature application
- sufficient security
- claim not yet due
Case Details
2014 LawText (BOM) (03) 61
Company Application (L) No.68 of 2014 in Company Petition No. 510 of 2013
Mr. Virag Tulzapurkar, Senior Advocate with Mr. Ashish Kamat, i/by M/s. Desai & Diwanji for the Applicant; Mr. J.D. Dwarkadas & Mr. R. Narichania, Senior Advocates, with Ms. Jyoti Singh, Mr. Srisabari Rajan i/by Phoenix Legal for the Petitioner; Mr. D.D. Madon, Senior Advocate, with Mr. A.S. Doctor, i/by M/s. Junnarkar & Associates for the Respondent
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Nature of Litigation
Application by a non-party creditor to intervene in a winding-up petition and seek modification of orders to create additional security over an asset.
Remedy Sought
ICICI Bank sought leave to be impleaded as a respondent to the company application, alternatively leave to intervene, modification of the order dated 11th December 2013, and further reliefs in relation to Rig V-351.
Filing Reason
ICICI Bank claimed that it had a security interest over certain assets of GOL Offshore and sought to protect its position by obtaining additional security over Rig V-351.
Previous Decisions
The court had passed three orders in BNYM's Company Application on 28th October 2013, 29th November 2013, and 11th December 2013.
Issues
Whether ICICI Bank should be allowed to intervene in the winding-up proceedings as a non-party.
Whether the court should modify its earlier order to create additional security in favour of ICICI Bank over Rig V-351.
Submissions/Arguments
ICICI Bank argued that it had a claim against GOL Offshore and sought to protect its interests by obtaining security over the rig.
BNYM and GOL Offshore opposed the application, contending that ICICI Bank's claim was not yet due and that it was otherwise sufficiently secured.
Ratio Decidendi
A creditor cannot seek creation of additional security over an asset in winding-up proceedings when its claim is not yet due and it is otherwise sufficiently secured; such an application is premature and an attempt to defeat the resolution of another creditor's claim.
Judgment Excerpts
I am not persuaded to grant any reliefs on this Company Application.
What ICICI Bank seeks is the creation of an additional security in its favour over Rig V-351, although there is no such pre-existing security, and although ICICI Bank is otherwise sufficiently secured for any claim that it might have against GOL Offshore.
The application here is not only premature but is a hasty and unjustified attempt to defeat the resolution of at least part of BNYM’s claim against GOL Offshore.
Procedural History
BNYM filed Company Petition No. 510 of 2013 for winding up of GOL Offshore. BNYM then filed Company Application (L) No.549 of 2013 seeking reliefs regarding Rig V-351. The court passed orders on 28th October 2013, 29th November 2013, and 11th December 2013. ICICI Bank then filed the present application on 11th February 2014, which was heard and dismissed on 5th March 2014.
Acts & Sections
- Companies Act, 1956:
- Banking Regulation Act, 1949:
