In Brief
UCO Bank sought recovery of outstanding dues from Shree Sitaram Mills Ltd., which had been taken over and nationalized by National Textile Corporation Ltd. (NTC). The Bank initiated arbitration before the Permanent Machinery of Arbitrators (PMA) for dues allegedly not covered by the Textile Undertakings (Nationalization) Act award. The High Court quashed the arbitration, holding NTC was not liable for pre-nationalization debts. The Supreme Court partly allowed the appeal, upholding the quashing of arbitration but setting aside the liability conclusion. The Court held that whether NTC inherited the pre-takeover liabilities was a factual question requiring evidence and should be determined by the Debts Recovery Tribunal, not by writ proceedings, leaving the question of liability open for examination by the appropriate forum.
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