APPLICATION UNDER SUB-SECTION (1) OF SECTION 17 OF

THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL

ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002

For use in Tribunal’s Office

Date of Filling ………………………………

Date of receipt by post ………………………………

Or

Registration No. ………………………………

………………………………

Signature

Registrar

  1. Limitation :-

The applicant further declares that this application is filed within the limitation Prescribed in sub-section (1) of Section 17 of the Securitisation and Reconstruction Of the Financial Assets and Enforcement of Security Interest Act,2002.

  1. Facts of the case :-

The facts of the case are given below :-

  1. The company is manufacturing the M.S. Ingot in induction furnace division and Re-Rolled Products i.e. TMT Bar, Squares, Angles, Rounds etc. in its rolling mill Division.
  1. That the fire accidents have occurred in our company in induction furnace division on 27.09.2009 and 01.10.2009 in which the company has suffered direct loss of Rs.165.00 lacs in addition / repairs & renewals of plant & machinery and in monthly fixed overheads during the close of the production in addition to the losses from the global recession in the iron & steel industries..
  1. That the four fire accidents have occurred on 10.01.2007, 12.01.2007, 26.01.2007 and 06.09.2007 in which the company has already suffered the loss of Rs. 175.00 lacs in repairs & renewals of plant & machinery & in fixed overheads.
  1. The Company has taken the following term loans and OCC Limit from xyz Bank, as under:-

(Rs. In lacs)

Nature of Limit Sanction Limit Outstanding OVERDUES

as on 02.08.10

OCC LIMIT 510.00 531.80 21.80

WCDL 40.00 37.56 -

TL-1 59.03 45.42 4.42

TL-II 100.07 94.30 0.23

Total 709.10 709.08 26.45

The copy of renewal cum sanction letter no. dated /02/2010 is annexed as Annex “C”.

If the bank will give the credit of penal interest which the bank has wrongly charged due to delay in renewal during the period 29.09.2009 to Feb. 2010 by the bank then the net over dues shall be Rs. 20.00 lacs only which is below the 90 days. Our all the accounts were regular as on 31.03.2010.

  1. That the company has submitted the proposal of fresh term for Automatic Rolling Mill and enhancement of Working Capital Loan on 05.02.2009 to increase the viability and profitability of the company and the bank simply renewed the existing limit in Feb. 2010 i.e. after 13 months.
  1. The bank has charged the penal interest @ 2% since Sept. 2009 due to delay of renewal whereas we have submitted the proposal on 5.02.2009 and the bank has renewed the same in Feb 2010. We have several times requested to bank to credit the penal interest in our OCC a/c. which the bank has wrongly charged because the delay was done by the bank.

The copy of letter for credit of penal interest is annexed as Annex “ “.

  1. Our loan account was standard and regular as on 31.03.2010.
  1. The bank has not allowed the operation in our OCC account since 20th April 2010 and earlier also even though our several requests.

The copy of our request letter to operate the account is annexed as Annex “ “.

  1. We have given the FDR & NSC of RS. 18.00 lacs in collateral and several times requested to bank to release the same because the company has suffered the heavy fire loss of Rs. 175.00 lacs in 2007 and Rs. 165.00 lacs on 27.09.09 and 01.10.2009. The company is SSI Units and given the more than 100% collateral instead of 50% but the have relieved only 16.00 lacs on 30.06.2010 when the bank has declared the our account as NPA as per recall letter No. dated 02.08.2010. The copy of our request letter dated is annexed as Annex “ “.
  1. That the company has also suffered from the heavy losses from the global recession in the industries since Sept. 2008 in which the suddenly the 50% to 60% of the prices of the iron & steel products have been reduced in first initial attempt. After that several times, rates and demands have affected the business of the iron & steel for which the RBI and Government of India has also given some incentive package in finance and taxes to overcome from the aforesaid recession problem.
  1. That the company has suffered loss from the aforesaid losses which are neither business losses nor it is due to mismanagement / failure of managerial control. That the company has suffered the aforesaid heavy losses from the natural calamities i.e. fire accidents and the external reason i.e. global recession in the industries which are beyond the control of the company and us.
  1. That the company has filed the four appeals of fire insurance claims of 2007 in Hon’ble National Consumer Disputes Redressal Commission New Delhi against the decision of the State Consumer Disputes Redressal Commission and all the appeals have been admitted by the Hon’ble National Commission. The total insurance fire insurance claim of 2007 are Rs.110.00 lacs. The last date of hearing was 27.08.2010 and the next date of hearing is 25.10.2010. The copy of the registration of appeal of all the cases in Hon’ble National Commission is annexed herewith as “Annex-1”.
  1. The fire insurance claims of Rs. 95.00 lacs are lying pending with the z as on date. The copy of the both the fire insurance claim is annexed herewith as “Annex-2 & 3”. We have served the legal notice to Oriental Insurance Company on 30.08.2010 to settle the case immediately within 10 to 15 days otherwise we shall take the legal action and file the claim in the court / Forum/ Commission against the insurance company. We shall send the copy of acknowledgement of aforesaid notices separately for your kind perusal.
  1. The bank has sanctioned the short term loan of Rs.30.00 lacs in Feb. 2007 for the repairs and replacement of plant & machinery which have been affected in the fire accidents of 2007 and the company has repaid the same in due time i.e. within 10 months.
  1. That the iron & steel market is always in recession during the rainy season i.e. July to Nov. in each & every year. Therefore, we could not fully regularize our TL & OCC accounts during the quarter ended 30th June 2010. There is no much over dues if you compare with the total loan exposure of the bank for which you have served the aforesaid notice u/s. 13(2) whereas the branch & Zonal Office already knows that our representation is pending since July 2010 with the Chief General Manager at H.O..
  1. As the bank know, that the company is not having the sufficient working capital after happening of the aforesaid natural calamities i.e. fire accidents in which the company has suffered heavy losses in addition to the losses of the global recession and recession in the iron & steel market due to rainy season and company’s representation is already lying pending with the higher authorities and with the branch then the bank may give some more time to regularize the aforesaid accounts instead of issuing the notice U/s. 13(2). The company may pay the aforesaid over dues but after paying the same, the production of the company shall be closed due to lack of working capital because the existing remaining working capital after the aforesaid losses offire accidents is not sufficient to utilize its optimum capacity of the production.
  1. After the fire accidents occurred on 27.09.2009 & on 01.10.2009, the company has made the following requests to you which you have kept pending as on date also, the details of our request are as under:-

Date Subject Date of

Acknowledgement Annex

03.10.09 Request for Adhoc Limit of Rs.50.00 lacs 03.10.09 to branch 4

03.10.09 Request for Term Loan of Rs.50.00 lacs 06.10.09 to branch 5

03.10.09 Request for Term Loan of Rs.50.00 lacs 03.10.09 to ZO by fax 6

25.01.10 Request for WCDL of Rs.100.00 lacs 25.01.10 to branch 7

27.01.10 Request for L.C.Limit of Rs.80.00 lacs&- 27.01.10 to branch 8

BP Limit Rs. 20.00 lacs

02.03.10 Request for L.C.Limit of Rs.80.00 lacs&-

BP Limit Rs. 20.00 lacs & WCDL of

Rs.60.00 lacs. 02.03.10 to branch 9

02.03.10 Request for L.C.Limit of Rs.80.00 lacs&-

BP Limit Rs. 20.00 lacs & WCDL of

Rs.60.00 lacs. 02.03.10 to ZO by fax 10

22.03.10 Request for WCDL of Rs. 90.00 lacs 22.03.10 to branch 11

25.05.10 Request for L.C.Limit against fresh

& existing Collateral 25.05.10 to branch 12

05.06.10 Request for L.C. Limit of Rs.80.00lacs

& WCDL of Rs.25.00 laccs against-

existing & fresh collateral 05.06.10 to branch 13

Therefore, the bank has not given any importance of our aforesaid losses and keep pending all our aforesaid request even though our several reminders to the branch/Zonal Office. The copy of the same are annexed herewith as “Annex -4 To Annex-13 “.

  1. In last, we have also represented to the Head Office which are under process as on date. The details of our request are as under:-

Date Subject Remark Annex No.

04.02.2010To ED, Bank HO Met & handed-Over 14

Personally

04.02.2010 To GM (SME) Bank, HO ----do--- 15

08.03.2010 To ED, Bank HO ----do--- 16

08.03.2010 To GM (SME), Bank HO ----do--- 17

08.03.2010 To ZM, Bank ZO on 22.03.10 by fax 18

31.05.2010 To CGM, Regarding difficulties in Met & handed-Over 19

sanction of Credit facilities & - personally.

Operation in the OCC a/c.

01.07.2010 ------do------Do---- 20

24.08.2010 To CGM, submission of Restructured Submitted --

Proposal & Sanction of Fresh OCC On 24.08.10

Limit.

The copy of the aforesaid request letter is annexed herewith ass Annex –14 to Annex-20”.

  1. We have also requested to the bank to sanction the L.C. of Rs. 80.00 lacs & Working Capital Demand Loan of Rs. 25.00 lacs against the additional collateral securities of Rs. 70 lacs in addition to the existing collateral securities which the bank has also kept pending. The copy of the same is annexed herewith as “Annex-13 “.
  1. We have also requested to the branch on 24.05.10, ZO & GM(SME) on 08.03.10, if the bank is not interested to sanctioned any further credit facilities then please give the permission for the multi banking & parri-passu charge so our company may take the further required credit facilities from the other financial institutions but the bank has not given the same. The copy of the same is annexed herewith as “Anne-21 & 18 & 17 “.
  1. The company has submitted the proposal in Feb. 2009 for the additional term loan for automatic rolling mill and enhancement of working capital limit in which the bank has simply renewed the existing limit in Feb. 2010 i.e. after 13 months instead of our several reminders and charged the penal interest in our OCC Account for the period from 22.09.09 to Feb. 2010 due to delay of renewal whereas the delay was done by the bank. Therefore, the branch has charged the penal interest due to delay in renewal is totally wrong & illegal. We have several times requested to the branch, Zonal Office and the H.O. to waive the penal interest which the bank has wrongly charged due to delay in renewal but the same has not been given the credited in our OCC a/c. The copy of our request letters are annexed herewith as “Annex-22 to Annex- 25” and as under:-

Date Particulars Receipt of Branch Annex No

02.03.10Request to allow the time for adjustment

Of interest of OCC of Feb.10 & adjust from

Penal interest 02.03.10 22

26.04.10 Request for waiver of penal interest 26.04.10 23

17.05.10 ------do------17.05.10 24

08.06.10 ------do------08.06.10 25

  1. We have several times requested to you to release our FDR & NSC in March 2010 which you have kept in collateral securities because the company has suffered heavy fire accident losses which the bank has released the FDR of Rs. 16.00 lacs only on 30.06.2010 when the account classified by the bank as NPA. If the bank released the NSC also & in due time then our account may be saved from the classification as “NPA”. The particulars of our request letters are as under:-

Date Particulars Receipt by Annex

branch on No.

25.03.10 Regarding set-off deposits held by bank 26.03.10 26

02.04.10 Request for release of FDR & NSC 02.04.10 27

28.05.10Request to release the FDR & NSC &

Adjust all over dues 28.05.10 28

08.06.10 ------do------08.06.10 29

The copy of the aforesaid letters are annexed herewith as “Annex- 26 to Annex- 29 .

  1. We have several times requested to you to give the permission to operate the OCC accounts but you have not given the same. The details are as under:-

Date Subject Date of Receipt Annex No.

19.09.09Request to allow the operation

in OCC 19.09.09 to Branch 30

19.09.09 ------do------19.09.09 to ZO by fax 30

02.12.09 ------do------03.12.09 to branch 31

03.10.09 ------do------05.10.09 to branch 32

03.10.09 ------do------03.10.09 to ZO by fax 32

29.03.10 ------do------29.03.10 to branch 33

17.05.10 ------do------21.05.10 to branch 34

The copy of the aforesaid request letters are annexed as “Annex-30 to Annex 34 “.

  1. The Zonal Office has sanctioned the excess drawl of 25.00 lacs on 31.08.2009 and the branch has stopped the operation in our OCC account till the regularization of the OCC limit and we have requested to the branch & ZO on 19.09.09 to permit to operate the account.

The copy of the our request letters are annexed herewith as “Annex- 30 “.

  1. We further inform you that the branch has not allowed the 5 to 7 days time for servicing of monthly interest and returned our Cheque and stop the operation in the accounts whereas as per your bank rule 5 to 7 days normal time is to be allowed to borrower to serve the interest. The branch has not allowed the same even our several request.
  1. We have requested to the branch to give the details of monthly interest and penal interest in our OCC/Adhoc & TL a/cs during the period from 01.04.09 to 30.04.10.But the branch has not given the same till to-day.
  1. We have requested the branch regarding the modification of terms & conditions of your letter no. 0493/52/103 dated 25.05.10 in which you have changed the repayment period of WCDL of Rs. 40.00 lacs from 36 months to 12 months without verifying the our financial statements and financial position. Therefore, we have requested to the branch to modify the same & sanction the repayment period in 12th quarterly installments. The copy of the aforesaid letter is annexed herewith as “Annex- 35”.
  1. The existing collateral securities (excluding the Primary Security) is 720.00 lacs as per the valuation report dated 11.02.2009 which present market value has already gone upto more than Rs. 1000.00 lacs as on date i.e August 2010. Therefore, the total collateral securities including the primary security is not less than 1800 lacs to 2000 lacs are available with the bank against the total exposure of Rs.709.00 lacs.
  1. That the company has already offered further security to the bank if the bank sanction some more credit facilities to run the company smoothly. The details of which already given in the restructured proposal of the company.
  1. We have met and also discussed in telephone regarding the our representation to the Zonal Manager and CGM HO and after discussion all of them, the company has already submitted the restructured proposal with the Raipur Branch and Chief General Manager, H.O. on 24.08.2010 for the conversion of OCC Limit of Rs. 300.00 lacs into Long Term Loan which has been lost in the aforesaid fire accidents and in global recession and requested to sanction the fresh OCC Limit of Rs.300.00 lacs to run & utilize its maximum production capacity

In view of the above narration made by us, we mark a copy of our reply to your securitization notice u/s. 13(2) dated 14.08.2010 to the controlling authority of the bank to represent them, the non-cooperation meted out to us by the local branch authority from time to time since Oct. 2009.

  1. Relief (s) sought :-

In view of the facts mentioned in paragraph 5 above, the applicant prays for the

Following relief (s) :-

  1. To vacate and restore the possession of the company & other properties to the borrower & Guarantors & mortgagors.
  1. To Restructure the account of the company as per the restructure proposal submitted by the borrower.

Ground for relief (s) and the legal Provisions (if any) relied upon

Prays for following Relief:

  1. Interim order, if prayed for :-

Pending final decision on the application, the applicant seeks issue of the following

Interim Order :-

  1. To vacate and restore the possession of the company & other properties to the borrower & Guarantors & mortgagors.
  1. To give the instruction to the bank to sanction short term loan of Rs. 100.00 lacs.
  1. Matter not pending with any other court, etc.:

The applicant further declares that the matter regarding which this application has Been made is not pending before any court of law or any other authority or any Other Bench of the Tribunal .

  1. Particulars of Bank Draft /Postal Order in respect of the application fee in terms of

[rule 13] of these rules :-

(1) Name of the bank on which drawn:

(2) Demand Draft No.:

Or

(1) Number of Indian Postal Order (s) :

(2) Name of the issuing Post Office :

(3) Date of Issue of Postal Order (s) :

(4) Post Office at which payable :

  1. Details of Index :-

An Index in duplicate containing the details of the documents to be relied upon is

Enclosed.

  1. List of enclosures :-

VERIFICATION

I……………………………………………………………………………son/daughter/wife

(Name in full block letters)

Of Shri…………………………………….. the applicant / for and on behalf of theApplicant hereby solemnly verify that the contents of paras 1 to 11 are true to my personal knowledge and belief and that I have not suppressed any material facts.

Place………………. Signature of the applicant

Date……………….