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Issues:
1. Interpretation of provisions of Sick Industrial Companies (Special Provisions) Act, 1985 regarding availing public offer for purchase of shares. 2. Consideration of objections raised by unsecured creditor regarding the petitioner's right to avail the public offer. 3. Analysis of the powers of the Board for Industrial and Financial Reconstruction (BIFR) under section 22 of the Act in relation to pending legal proceedings and awards. 4. Determination of the petitioner's right to sell shares at a specified price and the management of proceeds for the benefit of creditors. Issue 1: Interpretation of Sick Industrial Companies Act provisions The judgment involves a petition filed under the Sick Industrial Companies (Special Provisions) Act, 1985, concerning the petitioner's application to avail a public offer for purchasing shares. The court considered sections 19A and 22(3) of the Act, which allow companies to participate in such offers for the rehabilitation of the applicant-company. The court emphasized that the Board for Industrial and Financial Reconstruction (BIFR) has the authority to suspend legal proceedings and enforce contracts to facilitate the company's revival. The judgment clarified that even with existing injunctive orders or awards, the BIFR retains the power to issue necessary directions in line with the Act's objectives. Issue 2: Consideration of objections by unsecured creditor The judgment addressed objections raised by an unsecured creditor regarding the petitioner's eligibility to benefit from the public offer. The court noted the creditor's opposition based on legal proceedings and an award in their favor. However, the court rejected the argument that the creditor's award under the Arbitration and Conciliation Act, 1996, should take precedence over the BIFR's directions under the Sick Industrial Companies Act. The court highlighted the need to prevent unsecured creditors from impeding the rights of secured creditors or other stakeholders, especially in the context of pending recoveries and creditor hierarchy. Issue 3: Analysis of BIFR's powers under section 22 The judgment extensively analyzed the powers vested in the BIFR under section 22 of the Act, particularly regarding the suspension of legal proceedings and contracts for the rehabilitation of sick industrial companies. The court emphasized that the BIFR's authority supersedes other legal processes, including awards or injunctions, to ensure the company's restructuring and creditor protection. The judgment underscored the BIFR's overriding power, as outlined in section 32 of the Act, to further the Act's objectives and schemes for industrial revival. Issue 4: Determination of petitioner's right to sell shares and manage proceeds The judgment granted the petitioner the right to sell shares at a specified price per share and directed the proceeds to be held in a separate account for the benefit of secured creditors. The court mandated the amount to be kept in a non-lien account subject to BIFR's directions after considering submissions from both secured and unsecured creditors. Additionally, the judgment outlined the management of the amount in a fixed deposit account, renewable based on BIFR's directives, to ensure equitable distribution among creditors. The court disposed of the writ petition, with each party bearing its own costs, and declined a request to stay the order. This detailed analysis of the judgment provides a comprehensive overview of the legal issues addressed and the court's interpretation of the relevant provisions under the Sick Industrial Companies Act, 1985.
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