The resolution professional of Deccan Chronicle Holdings (DCHL) on Tuesday approached the Hyderabad High Court challenging Indiabulls Financial Services’ attempt to seize the company’s corporate office in Secunderabad.
Armed with an order by Hyderabad’s chief metropolitan magistrate, the officials of the non-banking financial company on Monday initiated seizure of Deccan Chronicle head office in Secunderabad under the Sarfaesi Act.
Indiabulls claimed to have an exclusive lien over the media house’s corporate office and a printing press property at Kompally on the city outskirts.
However, resolution professional Mamata Binani filed a writ petition in the high court against Indiabulls action on the grounds that there was a moratorium on all such actions — legal or otherwise — by the company lenders in view of the ongoing insolvency resolution process. The Bench comprising Justice Ramesh Ranganathan and Justice K Vijayalakshmi heard the matter on Tuesday.
But Indiabulls argued that it could take possession of the property as it was not registered under the company’s name. One of the promoters of company owns this premises, the lender said.
In a caveat filed in the high court, Indiabulls contended that since the building was in the name of the promoters, its action won’t hinder the process of the ongoing corporate insolvency resolution process in any manner.
NCLT’s Hyderabad bench had directed the committee of creditors (CoC) to examine a revised resolution plan submitted by Srei group’s Vision India Fund following the extension of insolvency resolution period by the appellate tribunal. The company owes close to Rs 800 billion to the lenders, according to the claims approved by the resolution professional.
Last month, Srei had got a favourable order from the National Company Law Appellate Tribunal (NCLAT) to its claim to be recognised as a financial creditor and a place in the CoC.
It was denied the status of a financial creditor by the adjudicating authority on the grounds that Srei has a share-holding in the company.
Vision India Fund’s original resolution plan had failed to get the mandatory 66 per cent vote in CoC on July 10, the last day of the mandatory resolution period. The CoC was yet to take a view on the revised resolution proposal.
Last year, the Hyderabad bench disallowed Srei’s claim for a place in the CoC as a financial creditor citing an allotment of 660 million shares in Deccan Chronicle in its favour through conversion of a portion of debt into equity based on the loan agreement between the lender and the borrower. These shares were allotted for Rs 200 million of the total loan of Rs 2.40 billion advanced by Srei.
The appellate authority reverted these orders stating that the allotment of shares to Srei Infra Finance in the company was not accepted by the stock exchange.