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2017 (1) TMI 1805 - HC - Companies LawMajor shareholder of petitioner company - HELD THAT - The AAIFR has in the impugned order made it clear that the issue of whether VIL is a major share holder of the petitioner company is the subject matter of a suit in this High Court and the issue is yet to be decided. It is not for the BIFR or AAIFR to adjudicate this issue. The suit has since been transferred to the Saket District Court. The impugned order does not call for interference under Article 226 of the Constitution of India. In any case with the enforcement of the Sick Industrial Companies (Special Provisions) Repeal Act 2003 w.e.f. 01.12.2016 the writ petition has become infructuous and the same is dismissed. Petition disposed off.
Issues:
Challenge to order of Appellate Authority for Industrial and Financial Reconstruction (AAIFR) dismissing appeal against order of Board for Industrial and Financial Reconstruction (BIFR) regarding impleading parties in pending reference of petitioner company. Analysis: The writ petition challenged an order of the AAIFR dismissing an appeal against the BIFR's decision to implead certain parties in the petitioner company's pending reference. The petitioner's counsel contested the BIFR's finding that Videocon Industries Ltd. (VIL) and Shekhar Bhandari were major shareholders of the petitioner company, fearing future prejudice. However, the AAIFR clarified that the issue of shareholding was pending before the High Court of Delhi and was not within the jurisdiction of the BIFR or AAIFR to decide. The AAIFR emphasized the need for a prudent and equitable course of action, considering potential prejudice to both parties depending on the outcome of the shareholding dispute. The AAIFR's order highlighted that the question of whether VIL was a major shareholder of the petitioner company was subject to a suit in the High Court, now transferred to the Saket District Court. The court reiterated that the BIFR or AAIFR did not have authority to adjudicate on this issue. Furthermore, the judgment noted the enactment of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, rendering the writ petition moot as of 01.12.2016. The dismissal of the petition did not preclude parties from seeking other legal remedies, including those under the Insolvency and Bankruptcy Code, 2016. In conclusion, the writ petition challenging the AAIFR's order was dismissed, considering the changed legal landscape with the repeal of the relevant Act. The judgment clarified the limitations of BIFR and AAIFR in deciding shareholding disputes, emphasizing the ongoing legal proceedings in the High Court and subsequent transfer to the District Court. Parties were advised to seek alternative remedies available under the law, including provisions of the Insolvency and Bankruptcy Code, 2016.
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