# In the matter of Swaraj Infrastructure Pvt. Ltd. Civil Appeal No. 1291,1292,1293 & 1294-2019

> SC judgment dated 2019-01-29. Citation: TCN-2019-SC-00096. The case involves the right of a secured creditor to file a winding-up petition after obtaining a…

- **Court:** SC
- **Order date:** 29 Jan 2019
- **Citation:** TCN-2019-SC-00096
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/swaraj-infrastructure-pvt-ltd-civil-appeal-no-129112921293-1294-2019-943946a0

## Summary

### Background

The case involves the right of a secured creditor to file a winding-up petition after obtaining a decree from the Debts Recovery Tribunal (DRT) and a recovery certificate. Several appeals were heard together by the Bombay High Court. Kotak Mahindra Bank Limited, the respondent, advanced loans to companies, with an outstanding amount of INR 48 crores. The respondent approached the DRT, Mumbai, and obtained favorable judgments on 16.01.2015. Recovery certificates dated 12.08.2015 were issued. Attempts to auction the properties securing the loans were unsuccessful. The respondent issued statutory notices on 15.04.2015 under Sections 433 and 434 of the Companies Act, 1956. A company petition was filed before the Bombay High Court on 03.07.2015, and admitted on 26.07.2017,

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## Facts

Kotak Mahindra Bank Limited advanced loans to various companies, resulting in an outstanding debt of approximately INR 48 crores. After the companies defaulted, Kotak Mahindra Bank approached the Debts Recovery Tribunal (DRT) in Mumbai and obtained three separate judgments on 16.01.2015, allowing the bank's applications for debt recovery. Recovery certificates were issued on 12.08.2015. Attempts to auction the properties that served as security for the loans were unsuccessful. Subsequently, Kotak Mahindra Bank issued statutory notices dated 15.04.2015 under Sections 433 and 434 of the Companies Act, 1956. As payments were not forthcoming, a company petition was filed before the Bombay High Court on 03.07.2015. The petition was admitted on 26.07.2017, based on the

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## Issues and analysis

### Issue 1: Whether a secured creditor, having obtained a decree from the Debts Recovery Tribunal (DRT) and a …

**Ratio:** A secured creditor can initiate winding-up proceedings under the Companies Act, 1956,

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**Reasoning:** The Court reasoned that the Recovery of Debts Act does not bar winding-up proceedings for

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**Interpretation:** The interpretation clarifies that the Recovery of Debts Act does not provide an

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**Application:** In this case, Kotak Mahindra Bank, as a secured creditor with a DRT decree, was

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## Parties

- **Judges:** ROHINTON FALI…
- **Appellants:** SWARAJ INFRASTRUCT…
- **Respondents:** Kotak Mahindra…

## Timeline

- **2015-01-16 — DRT Judg…**: Debts Recovery Tribunal delivered three separate judgments allowing the applications…
- **2015-04-15 — Statutory Notic…**: Kotak Mahindra Bank issued statutory notices under Sections 433 and 434 of the Companies…

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