Tip Top Furniture Land Vs Reserve Bank of India (Kerala High Court)
Kerala High Court held that passing of order and classifying account of petitioner as fraud without following Master Directions on Frauds and without furnishing a copy of the audit report is not tenable in law. Accordingly, writ petition is allowed.
Facts- The first petitioner is a firm and the petitioners 2 to 7 are its partners. The 1st petitioner is one of the units of M/s.Tip Top Furniture Group. The Group manufactures, trades, imports, and exports wooden and other allied furniture. The six units of the Group had availed financial assistance from the HDFC Bank, which was taken over by the 2nd respondent bank in 2015. Since the petitioners defaulted in repaying some of the loans, the Bank initiated recovery proceedings, which are pending consideration before the Debt Recovery Tribunal – 1, Ernakulam. The Bank had also initiated proceedings for the liquidation of one of the Units of the Company under the Insolvency and Bankruptcy Code, 2016. The National Company Law Board, Kochi, had ordered the liquidation of the company, and the official liquidator conducted the sale of the company’s assets in a public auction. The Group had submitted several one- time settlement proposals to the Bank, but they were all rejected.
