Case Note & Summary
The appeal arose from a judgment of the High Court of Rajasthan which dismissed a writ petition filed by XLO India Limited and another against the order of the Debts Recovery Appellate Tribunal (DRAT). The DRAT had maintained the attachment of shares held by XLO India Limited while allowing recovery proceedings to continue. The appellants disputed a claim of approximately Rs.29 crores due to the respondent, International Asset Reconstruction Company Private Limited, asserting that the debt had been settled. The court heard arguments from both parties and noted a consensus to resolve the matter by requiring the appellant to deposit Rs.5 crores with the Debts Recovery Tribunal (DRT) and allowing the respondent to withdraw certain amounts while preserving the rights of both parties in the ongoing appeal. The DRT was directed to expedite the resolution of the appeal within eight weeks. The court also ordered that the attachment of shares would continue until the appeal was resolved, and recovery proceedings were stayed pending this outcome. The appeal was disposed of in accordance with the agreed terms, and the court kept open any questions of law for future consideration.
Headnote
A) Debt Recovery - Attachment of Shares - Continuation of Attachment - Recovery of Debts and Bankruptcy Act, 1993, Section 25 - The court upheld the continuation of the attachment of shares held by the appellant during the pendency of the appeal, ensuring that recovery proceedings would proceed in accordance with the law. Held that the attachment would remain until the final disposal of the appeal (Paras 8-9).
Issue of Consideration
Whether the appeal against the attachment of shares and the order of the Debts Recovery Appellate Tribunal should be upheld or set aside.
Final Decision
The Supreme Court disposed of the appeal, directing the appellant to deposit Rs.5 crores with the DRT and allowing the respondent to withdraw certain amounts while maintaining the attachment of shares until the appeal was resolved. The DRT was instructed to expedite the decision on the pending appeal.
Law Points
- Debt recovery
- attachment of shares
- pre-deposit
- recovery proceedings
- jurisdiction of DRT
