# In the matter of Usha India Limited vs. Union Of India and Anr.

> HC judgment dated 2024-08-27. Citation: TCN-2024-HC-00041. The case involves a writ petition filed by M/S Usha India Limited through its Resolution…

- **Court:** HC
- **Order date:** 27 Aug 2024
- **Citation:** TCN-2024-HC-00041
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/usha-india-limited-vs-union-of-india-and-anr-5b640d42

## Summary

### Background

The case involves a writ petition filed by M/S Usha India Limited through its Resolution Professional (RP) seeking the release of fixed deposit amounts held by Indian Bank. Usha India Limited, identified as the Corporate Debtor, had its properties auctioned in 2007 under the SARFAESI Act due to its failure to repay debts. IFCI Ltd., another creditor, also challenged the actions taken by other creditors. The DRT-1 took possession of the surplus amount from the auction. Subsequently, CIRP was initiated against Usha India Ltd. by an order of the NCLT, Allahabad. The IRP informed DRT-1 about the moratorium declared under Section 14 of the IBC and approached the High Court for the release of the fixed deposits.

## Facts

Usha India Limited (Corporate Debtor) defaulted on debt repayments, leading to the auction of its mortgaged properties by Indian Bank on 2007-01-23 under the SARFAESI Act. The auction generated Rs. 29,93,01,000. Usha India Limited challenged the auction by filing an SA under Section 17 of the SARFAESI Act. IFCI Ltd., another creditor, also challenged the actions of other creditors. DRT-1 took possession of the surplus amount and issued FDRs in favor of Registrar DRT-1. SA No. 01/2007 was dismissed for non-prosecution on 2018-01-31. CIRP was initiated against Usha India Ltd. by NCLT, Allahabad. Mr. Chirag Rajendra Kumar Shah was appointed as the Resolution Professional on 2023-10-05. The IRP informed DRT-1 about the moratorium under Section 14 of the IBC on 2023-10-08

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## Issues and analysis

### Issue 1: Whether the petitioner company, through its IRP, is entitled to the release of the aforesaid FDRs …

**Ratio:** The principle of facilitating the Corporate Insolvency Resolution Process (CIRP) while

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**Reasoning:** The court reasoned that since the respondent bank (Indian Bank) had no objection to the

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**Interpretation:** This issue involves interpreting the interplay between the SARFAESI Act, the

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** DHARMESH…
- **Appellants:** M/S USHA INDIA…
- **Respondents:** Usha India…; Union of…
- **Other parties:** Kohi…

## Timeline

- **2007-01-23 — Auction of Pr…**: Properties of Usha India Limited were…
- **2018-01-31 — Dismissal…**: SA No. 01/2007 was dismissed for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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