2000 (8) TMI 1003 - HC - Companies Law

Summary

Issues:
Extension of order under Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) by the High Court.

Analysis:
The petitioner, a public limited company, sought an extension of an order passed by the Board for Industrial and Financial Reconstruction (BIFR) under section 22(3) of SICA. The petitioner had made a reference to the BIFR, which declared it a sick industrial company and directed measures for reconstruction. An appeal was filed against this order, and an interim order was passed by the court to keep the decision in abeyance. The petitioner also requested a declaration under section 22(3) of SICA, suspending contracts, which was extended by the BIFR. However, the respondent opposed the extension, citing a suit filed in the High Court of Bombay for recovery of lease property.

The High Court noted that any declaration under section 22(3) of SICA must be made by the BIFR, and the court could only intervene after the BIFR's decision. The court emphasized that the petitioner should have approached the BIFR first before seeking relief from the court. The previous declaration had expired, and the subsequent orders were also terminated due to an appeal decision. The court found that the petitioner should have requested an extension from the BIFR instead of directly approaching the court. Despite this, the court granted the petitioner ten days to seek appropriate orders from the BIFR before dismissing the petition.

In conclusion, the High Court dismissed the petition but allowed the interim order to remain in force for ten days to enable the petitioner to seek remedies from the BIFR. The court emphasized the proper procedure for seeking extensions under SICA and the importance of approaching the BIFR before seeking relief from the court.