27 June 2019: Electrosteel Castings has received a legal notice from UV Asset Reconstruction Company that has taken “symbolic possession” of the company’s land in Elavur in Tamil Nadu where the company has a cast iron pipe unit, Electrosteel Castings notified BSE on Thursday.
The ARC has made the move under the SARFAESI act and the pipes maker has said that it is contemplating legal action to dispute its move.
“…please be informed that the Company has received a Notice dated 19 June 2019 issued by UV Asset Reconstruction Co. Ltd. for taking the symbolic possession of land situated at Elavur under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002,” Electrosteel Castings said in a notification to BSE.
Under the said rules mentioned in the notification, UV ARC has the right to sell or auction the the land to recover its money. The size of the land could not be ascertained. An email sent to both UV ARC and Electrosteel Castings remained unanswered till press time Thursday.
Electrosteel Castings is an associate company of Electrosteel Steels that was acquired by Vedanta last year under the country’s insolvency law for failing to pay more than Rs 14,000 crore worth of banks’ debt. Chaired by Pradip Kumar Khaitan who is also the seniormost partner at law firm Khaitan and Co., EC produces both cast iron pipes as well as ductile iron pipes that find use transmission of water, gas and sewage. It is headquartered in Kolkata and has three facilities in West Bengal at Khardah, Haldia and Bansberia, apart from the unit in Elavur.