SUZUKI PARASRAMPURIA SUITINGS PVT. LTD v. THE OFFICIAL LIQUIDATOR OF MAHENDRA

Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 – Company Petition filed for winding up of one M/s. MPL – M/s. MPL was also referred for rehabilitation to the Board for Industrial and Financial Reconstruction (BIFR) – During pendency of the same, without permission or knowledge of the BIFR, M/s. MPL entered into an MOU with the sister concern of the appellant for leasing out its properties to the appellant for 20 years for repayment of its debt – Industrial Finance Corporation of India Ltd. (IFCI) was secured creditor of M/s. MPL and held first charge over the assets of M/s. MPL for outstandings of Rs.160 Crores – After the winding-up order, IFCI assigned its dues to the appellant for a sum of Rs.85 lacs – Appellant filed Company Application for substitution in place of IFCI as a secured creditor of M/s. MPL – Company Judge rejected the application on 31.07.2015 holding that the appellant was neither a Bank/Banking company/financial institution/ securitization company/reconstruction company and therefore could not be substituted in place of IFCI as secured creditor for the purpose of the SARFAESI Act– Challenged by appellant for recall/review of said order contending that it never sought the status of a secured creditor in lieu of the IFCI but had simply desired to be adjudged a transferee from IFCI of an actionable claim u/s.130 of the T.P. Act – Held: Appellant in Company Application specifically sought substitution in place of IFCI as a secured creditor consequent to the deed of assignment in its favour from IFCI – After the claim of the appellant of being a secured creditor was rejected by the Company Judge, and the appellant realised the unsustainability of its claim in the law, it made a complete volte face from its earlier stand, contrary to its own pleadings, and contended that it had 906 SUZUKI PARASRAMPURIA SUITINGS P. LTD. v. OFFICIAL LIQUIDATOR OF MAHENDRA PETROCHEMICALS LTD. 907 never sought the status of a secured creditor under the SARFAESI Act – A litigant cannot take contradictory stands in the same case – No merit in the appeal – Transfer of Property Act, 1882 – s.130. Practice & Procedure – Inconsistent stands in the same case – Untenability of – Held: A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands. Dismissing the appeal, the Court HELD: 1.1 That the unregistered MOU was without permission of the BIFR, it was not disclosed to the Company Court till the winding-up order was passed on 19.04.2010, the assignment of debt of Rs.160 crores by IFCI for Rs.85 lacs are admitted facts. The order passed by the Company Judge makes it very explicit that the appellant in Company Application had specifically sought substitution in place of IFCI as a secured creditor holding first charge consequent to the deed of assignment in its favour dated 28.07.2010 from IFCI. The submissions made before the Company Judge leaves no doubts that as an assignee of debts from the IFCI, the appellant essentially sought substitution as a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) and for that purpose sought to draw sustenance from the provisions of Section 130 of the Transfer of Property Act. [Para 8] [910-G-H; 911-A-B]

1.2 The appellant initially took a conscious and considered stand before the Company Judge, staking a claim for being substituted as a secured creditor under the SARFAESI Act consequent to the assignment of debt to it by the IFCI. That the claim was not simply with regard to assignment of an actionable claim under Section 130 of the T.P. Act is evident from its own pleadings and the pursis filed by the IFCI before the Debt Recovery Tribunal. After the claim of the appellant of being a secured creditor was rejected by the Company Judge, and the appellant realised the unsustainability of its claim in the law, it made a complete volte face from its earlier stand and surprisingly, contrary to its own pleadings, now contended that it had never sought the status of a secured creditor under the SARFAESI Act. [Para 10] [912-D-F] A B C D E F G H 908 SUPREME COURT REPORTS [2018] 12 S.C.R. A B C

1.3 A litigant can take different stands at different times but cannot take contradictory stands in the same case. A party cannot be permitted to approbate and reprobate on the same facts and take inconsistent shifting stands. No merit is found in the appeal. [Paras 12, 14] [913-C, G]