In Brief
UCO Bank sought recovery of dues from National Textile Corporation Ltd. (NTC) for a nationalised textile mill that had borrowed from the bank. The High Court quashed arbitration proceedings before the Permanent Machinery of Arbitration (PMA) and held that NTC was not liable for pre-nationalisation debts. The Supreme Court partly allowed the bank's appeal: while the quashing of arbitration was justified (as the recovery tribunal was the proper forum), the High Court's conclusion that NTC bore no liability was erroneous and premature. The Court left the liability question open for determination by the Debt Recovery Tribunal with opportunity for the parties to adduce evidence.
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