Supreme Court to hear Kingfisher Airlines plea against lenders today

Indu Bhan Posted online: Friday, Jul 18, 2014 at 0000 hrs
New Delhi : The Supreme Court will on Friday hear Kingfisher Airlines’ (KAL) appeal seeking to restrain the SBI-led consortium of banks from taking possession of ‘Kingfisher House’ to realise part of the debts due to the lenders.

Kingfisher House, a prime property housing the airlines’ prominent offices in Mumbai, was mortgaged to the banks while availing loan. Even the revenue authorities – service tax and income tax departments - have attached this property in July and August last year for non-payment of dues.

The matter is coming up for hearing before a bench headed by Justice JS Khehar.

The division bench of the Karnataka High Court in January this year had rejected the KAL's request and said that the company court had rightly held that provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002, a special enactment, overrides the provisions of Companies Act 1956 in such circumstances.

KAL had challenged the application filed by SBI associate company — SBICAP Trustee Company — in August 2013 before the Chief Metropolitan Magistrate, Esplanade, Mumbai seeking possession of the Kingfisher House under the Act to realise part of the debts due to the banks from KAL.

KAL in its appeal against the HC order said that the SBI being a secured creditor cannot file both a winding up petition before the high court and a plea in the trial court for takeover of the mortgaged property.