BY SAM ALFAN.
I&M Bank has suffered major after the High Court discharged its administrators from managing the property of Cape Holdings.
High Court Commercial Division Justice Josephine Mongare revoked appointment of Venkata Ramana Rao and Swaroop Rao as joint administrators of Cape Holdings ltd.
The judge further restrained the lender from appointing an administrator to manage the properties belonging to Cape Holdings Limited, over a loan borrowed in December 2020
Justice Mong’are held that the holding by the Court of Appeal asserts and fortifies the position that Cape Holdings is (mis)using administration proceedings under the Insolvency Act to evade satisfying the decree held by Synergy.
“This is a classic case of abuse of the court process which the court cannot countenance and I am in agreement with Synergy that the placement of Cape Holdings under Administration is prejudicial to the former’s rights and interest and is a fetter to Synergy to fully execute and obtain benefit from the lawful decree it holds,” said the judge.
She added that as such, the Administration proceedings against Cape Holdings cannot proceed as the present proceedings are an abuse of the court process.
The judge said the Court of Appeal found that I&M Bank had no legal interest in the suit property, over which the impugned Debenture was created.
The judge allowed the application by Synergy Industrial Credit Limited seeking to discharge the orders issued on 23 July 2024 by the Court that restraining it from dealing or interfering with the property identified as L.R. No. 209/19436 (IR 120877).
The company further sought the revocation of the appointment of the two Raos as joint Administrators of Cape Holdings.
The court dismissed Cape Holdings application seeking the court to recall and determine the pending application dated 6th May 2024 in Misc. 114 of 2015 Cape Holdings Ltd (Under Administration) v Synergy Industrial Credit Ltd for hearing together or in consolidation.
Cape Holdings had also sought to admit the Administrator’s Report and Minutes of the Creditors Meeting and grant leave to the administrators to dispose the suit property, set out proposals to all creditors for the settlement of all lawful debts and mediation if Synergy declines the settlement offer.
