Bombay HC directs CBI court to hand over documents to the liquidator of Parekh Aluminex

The Bombay High Court has directed the special CBI (Central Bureau of Investigation) court to hand over the original documents to the liquidator of Parekh Aluminex Ltd to sell the company's assets.

The liquidator for the country’s largest aluminium foil containers and aluminium foil rolls maker had approached the High Court after the special CBI court had refused to hand over the documents since the proceedings are still ongoing.

The CBI has filed a charge sheet against Parekh Aluminex and 23 others, including its directors, for allegedly causing over Rs 292 crore to Indian Overseas Bank.

Avil Menezes, the liquidator for Parekh Aluminex, argued in the High Court that the liquidation under the Insolvency & Bankruptcy is a timebound process. The original documents will be required for selling the assets.

In his plea, the liquidator further argued that he had approached the CBI to seek the files, documents and hard disks containing information, data, records etc., concerning the company’s businesses and affairs. But, the agency informed him that all those data and documents are part of the charge sheet and are in the judicial custody of the special CBI court.

However, when he approached the special CBI court, the adjudicating authority had refused to part away with the original documents.

“Obviously, for selling the assets during the liquidation process, the buyers would insist for original title documents either to avail credit facilities for purchasing the assets or otherwise,” observed Justice Sandeep K Shinde in his order of September 9.

“If such documents are not provided, the purchaser/bidders may withdraw from their bids which will eventually cause loss to public-sector banks, besides hardship for bonafide purchasers,” said the court in its 8-page order. “It is therefore essential that the original title documents seized by the CBI and presently in the custody of the Special Court are required to be returned to the purchaser.”

The court had directed the special CBI court to hand over those documents to the liquidator and also directed that the CBI shall certify all the documents and place a set of certified documents on record of the subject case, which will form part of the charge sheet.

The court also clarified that the certified copies of the documents should be treated as ‘primary evidence’ for all purposes in the subject trial.

Apart from the CBI, Mumbai-based Parekh Aluminex is under investigation by multiple agencies, including the Economic Offences Wing (EOW) of Mumbai Police, the Enforcement Directorate (ED), for defaulting on loans of about Rs 2,500 crore to its lenders.

Last year on October 7, the Mumbai bench of the NCLT had ordered the company's liquidation in the absence of any viable revival plan for the company.