# In the matter of Morarjee Textiles Ltd. & Ors. vs. Union of India & Ors.

> HC judgment dated 2026-04-07. Citation: TCN-2026-HC-00013. Morarjee Textiles Ltd. filed a writ petition challenging an award passed against them under the…

- **Court:** HC
- **Order date:** 7 Apr 2026
- **Citation:** TCN-2026-HC-00013
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/bombay-high-court-nagpur/morarjee-textiles-ltd-ors-vs-union-of-india-ors-d5536d6e

## Summary

### Background

Morarjee Textiles Ltd. filed a writ petition challenging an award passed against them under the MSME Act. The High Court directed the petitioners to deposit 75% of the awarded amount as a condition for stay. This order was challenged in the Supreme Court.

## Facts

Morarjee Textiles Ltd. (formerly Brembana Limited) received a work order from respondent no.3 for weaving fabrics.

A dispute arose between the parties, leading respondent no.3 to file a claim against petitioner no.1 under the MSME Act.

Respondent no.2 passed an award dated 20/3/2012 allowing respondent no.3's claim and directing petitioner no.1 to pay Rs.13,44,32,898/-.

The High Court directed the petitioners to deposit 75% of Rs.13,40,00,000/- as a condition for stay of the impugned award.

The Supreme Court stayed the High Court's order to the extent of directing petitioners to deposit 75% and directed to deposit 60% of the principal amount by way of bank draft or bank guarantee.

Axis Bank Limited initiated CIRP against Morarjee Textiles Ltd. under Section 7 of the IBC.

…

## Issues and analysis

### Issue 1: Whether the amount deposited in the Court in terms of the interim order passed by the High Court …

**Ratio:** The amount deposited in the Court is towards compliance of the order dated 5/7/2012 and

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**Reasoning:** The Supreme Court upheld the High Court's order directing the petitioners to deposit 75%

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**Interpretation:** The deposit serves as security for a potential dismissal of an appeal rather

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**Application:** The amount so deposited would belong to the corporate debtor (petitioner –

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## Parties

- **Judges:** Anil L. P…; Nivedita P.…
- **Appellants:** Subhashchandra…; Harsh Pi…; +2 more
- **Respondents:** Morarjee Textiles…; Union of…; +2 more
- **Other parties:** Nagp…; Ravi Se…
- **Advocates:** Akshay D…; V.V. Sh…; +4 more

## Timeline

- **20/3/2012 — Award Pa…**: Respondent no.2 passed the impugned award allowing respondent no.3's claim and directed…
- **2012-07-05 — High Court…**: The Court directed the petitioners to deposit 75% of Rs.13,40,00,000/- within three…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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