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SC permits ICICI Bank to take over Mardia plant

By Our Legal Correspondent

NEW DELHI DEC. 13. The Supreme Court today permitted ICICI Bank to take over the Surender Nagar unit of Mardia Chemicals in Gujarat but made it clear that the bank should not part with the assets of the borrower by way of lease, assignment or sale.

A three-Judge Bench comprising Justice V. N. Khare, Justice Ashok Bhan and Justice Arun Kumar passed this order on application from Mardia Chemicals for a direction to the bank that in the event of its takeover, it should keep the unit in operation condition and must run at a capacity not less than its present turnover.

In its application, the company said after the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest ordinance, the bank had taken over its Vatva unit near Ahmedabad. Now the bank was contemplating take over of the other unit at Surender Nagar.

It said that in the board, the nominees of financial institutions were in majority and the control of the company was not in the hands of the original promoters. Further 800 workers were employed at the Surender Nagar unit and hence if after the takeover the company was not run on the same commercial basis, the company would suffer great prejudice and suffer loss, the applicant said. The Bench said the same order as was passed on October 4 would apply in this case also, namely it would be open to the secured creditors to proceed against the borrowers under the securitisation ordinance but they should not part with the assets of the borrower by way of lease, assignment or sale.

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