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The loans from Banks are further secured by unconditional and irrevocable personal guarantees of
promoters, promoters group/ associate companies and secured/ to be secured by pledge of 51%
(Fifty one percent) of equity share capital (present /future) of the company or 100% of shares held/
to be held by promoters, promoters group/ associate companies, whichever is lower. b) Appeals
filed by the Company against its Lenders,viz., Bank of Maharashtra, Edelweiss Asset Reconstruction
Company Limited and others, under section 17 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) before the Hon’ble Debt
Recovery Tribunal, Chandigarh (DRT), against notice u/s 13(4) of the SARFAESI Act, 2002 issued by
the aforesaid lenders, were admitted and are pending adjudication before the Hon’ble DRT.The
Company has alleged that the action taken by the aforementioned lenders was incorrect in law, and
the Company has a claim for damages suffered by it. c) The Lender Banks (Canara Bank, State Bank
of Patiala, Punjab National Bank, UCO Bank, Union Bank of India, Dena Bank) of the Company which
held more than 80% of total outstanding loans of the Company have assigned and transferred their
debts along with underlying rights, benefits and obligations to Edelweiss Asset Reconstruction
Company Limited (EARC). d) Canara Bank, State Bank of Patiala, UCO Bank, Oriental Bank of
Commerce, Dena Bank (now merged with Bank of Baroda), Indian Overseas Bank, Bank of India, ICICI
Bank and Bank of Maharashtra had filed an Original Application under section 19(1) of the Recovery
of Debts due to Banks and Financial Institutions Act, 1993 before the Hon’ble Debt Recovery Tribunal
(DRT) at Chandigarh, which is pending adjudication. Besides this, Edelweiss Asset Reconstruction
Company Ltd. being assignee of Punjab National Bank and United Bank of India has also separately
filed an application under section 19(1) of the Recovery of Debts due to Banks and Financial
Institutions Act, 1993 before the Hon’ble Debt Recovery Tribunal (DRT) at Chandigarh, which is
pending adjudication. e) Edelweiss Assets Reconstruction Company Ltd.(EARC) an Asset
Reconstruction Company has claimed that it is an assignee of debt payable by the company by
certain banks. The actions of the Banks and Edelweiss Assets Reconstruction Company Limited
(EARC), amongst others, for recovery of debt held by them as owed by the Company and action to
seek declaration that the Company being in default of the debt and be declared insolvent, were
disputed by the Company as the debt was not acknowledged, and in any case the actions of Banks
and EARC was barred by limitation. Additionally, the Company had a counter claim against the
claimants for the losses caused by them to the Company. The Company had without prejudice to its
rights and without acknowledging its liability, initiated discussions with claimants to settle the
disputes, which failed. The Financial Commissioner of the State of Punjab has since determined that
the Agreements for Assignment of debt by lenders of the Company to EARC are insufficiently
stamped, and therefore, defective. A demand of Rs. 4.46 crores (interest and penalty to be applied)
was raised against EARC. A writ petition filed by EARC before the Hon’ble Punjab and Haryana High
Court at Chandigarh against the proceedings initiated by the Financial Commissioner was allowed.
The State of Punjab and the Company have filed Letters Patent Appeal (LPA) against the order of the
Single Judge Bench of the Hon’ble Punjab and Haryana High Court, which is being heard.EARC acting
in the matter as assignee of debt by certain banks in case wherein the State of Punjab has held
stamp duty to have been unpaid, had Petitioned the Hon’ble NCLT to initiate insolvency proceedings
against the Company, which was dismissed by the Hon’ble NCLT vide its order dated 17th March
2020 as the assignment deed was held as unenforceable. In an appeal filed by EARC against the
order of the Hon’ble NCLT, the Hon’ble NCLAT vide order dated 21 Jul 2022 has set aside the order
of the Hon’ble NCLT and remanded the matter to the Hon’ble NCLT for rehearing and without
touching the merits of the case and permitting the parties to take all arguments before the Hon’ble

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The loans from Banks are further secured by unconditional and irrevocable personal guarantees of

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