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XLO India Limited v. International Asset Reconstruction Company Pvt. Ltd.

Civil Appeal · 2021 INSC 924Decided 27 Oct 2021
Civil Appeal arising out of SLP (Civil) No. 14464 of 2021
Justice M.R. Shah · Justice A.S. Bopanna

Background

XLO India Limited was contesting a debt-recovery dispute in which the Debts Recovery Appellate Tribunal (DRAT), Delhi had ordered attachment of XLO's shares while a related appeal about the amount actually owed remained pending before the Debts Recovery Tribunal (DRT), Jaipur. The Rajasthan High Court dismissed XLO's writ petition challenging that attachment order, leading XLO to appeal to the Supreme Court.

Decision Breakdown

At the Supreme Court's suggestion, the parties reached a consensual arrangement and the Court disposed of the appeal in those agreed terms. XLO was directed to deposit a further Rs. 5 crore with the DRT within four weeks (without prejudice to its rights in the pending DRT appeal), and the recovery company was permitted to withdraw that amount plus certain other sums already deposited or held by the Recovery Officer, all subject to the final outcome of the pending DRT appeal. The share attachment was to continue and further recovery proceedings were stayed until the DRT decided the underlying appeal, which the Court directed be done within eight weeks, with all questions of law kept open.

Lesson Learnt

Parties to a debt-recovery dispute can resolve ancillary disputes (like an interim attachment) through a court-brokered consent arrangement that protects both sides' rights pending a final decision on the core issue, without having to litigate every procedural skirmish to a contested finish.

Official source (sci.gov.in)View Judgment (PDF)

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