9911796707
TMI Blog2000 (8) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... igh interest expenses of Rs. 46.82 crores. For previous year, the loss was Rs. 13.20 crores for 12 months. Provision for bad debts to the extent of Rs. 43.90 crores (previous year - nil ) and loss of Rs. 16.55 crores shown during the period due to expired/soiled goods (previous year - nil ). From the nature of exceptional loss/provision shown by the company in one accounting period it appeared that an attempt by the company to avoid suits filed/likely to be filed against them would not be fruitful. BIFR noted that IDBI had not given any direct comments whether the company was sick or not. It noted that Drug Controller certified about destruction of stocks lifted from debtors, and Rs. 16 crores worth of stocks were destroyed because they were not fit for human consumption and were destroyed in the presence of Drugs Inspector. Interest cost had gone up because the company had to borrow from outside source at a very high rate of interest. It had purchased high value raw-material for Bhiwadi Expansion Project, but because of the entry of multi-national companies, it had a tough time competing with them. Ultimately, it was concluded that the petitioner was a sick company. It was of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for information about movement of certain stock (ten items). List of goods which petitioner claimed to have destroyed by burning on 10-7-1998 includes those ten items of stocks and exactly the same quantities, apart from about 2 million units of 69 formulations of various medicines. No intimation was given to PNB or any other member of consortium banks about the proposed destruction. PNB had sought details about movement of ten items of raw materials because these were not found in stock at the time of the visit of the representatives of the consortium banks and no evidence about their movement was produced. AAIFR found it strange that a prudent person who wants to destroy goods which are hypothecated to banks or against which he has taken finance from banks, would insist on prior consent of such banks to the proposed destruction and would also insist that a representative of the bank would remain present to certify the destruction of goods. This was not done. It was also noticed that though a certificate stated to have been issued by Senior Drugs Inspector was produced, the same did not indicate batch numbers, dates of manufacture and dates of expiry and no affidavit from the Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cility from banks is also not borne out by PPL s account. Short-term loans as cash credit facility from banks against hypothecation of raw materials, works in process, finished goods and books debts were, according to the PPL s accounts : Rs. 17.14 crores (Financial Year 1996), Rs. 27.42 crores (Financial Year 1997) and Rs. 43.50 crores (Financial Year 1998). Despite increase in the exposure of banks during Financial Year 1998, sales drastically declined. ( e )Note 4 of Notes on Account for Financial Year 1997 indicates, as referred to in paragraph 7( a ) above, that the value of realization of current assets (which inter alia include sundry debtors) in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet. If this is correct, the entire provision of Rs. 43.90 crores for bad and doubtful debts relates to the sales during Financial Year 1998. Such a huge write-off of receivables without any effort for recovery is not accepted. ( f )The story of destruction of expired date drugs valued at Rs. 33.88 crores (rounded off) on 15-1-1999 (PPL claims these to be part of the provisions for bad and doubtful debts during Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould have directed further enquiry, because such action is inherent by use of the expression as deems fit . It was further submitted that creditor had sought permission for withdrawal of the appeal before AAIFR. Later on, an application was filed withdrawing the same. The matter finally came up before this Court and by an order dated 24-5-2000 in CW 133 of 2000 this Court directed the AAIFR to consider the effect of the application for withdrawal and acceptability of the prayer for the withdrawal of the application. Reliance is placed on a decision of the Allahabad High Court in Raisa Sultana v. Abdul Qadir Begam AIR 1966 All. 318 to contend that withdrawal of the application to withdraw a case is not permissible in law. Further, it is submitted that the appeal before the AAIFR was barred by limitation. The learned counsel for the respondent submitted that findings of the AAIFR have been arrived at by analyzing factual aspect in detail and scope of interference in this petition is extremely limited. There being no perverse or arbitrary finding, this writ petition is not maintainable. 5. We have considered rival submissions. We find, the conclusions arrived are on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority, or discretion. ( vi )Arriving at a finding which is perverse or based on no material. ( vii )A patent or flagrant error of procedure. ( viii )Order resulting in manifest injuries. The case at hand does not suffer from any of the enumerated deficiencies to warrant interference. 6. Two other aspects remain to be considered. First relates to the question of limitation. It is the stand of the petitioner that the appellant before AAIFR i.e., Goyal MG Gas Ltd., had no right under law to file the appeal against the order dated 31-3-1999 passed by BIFR since it is only unsecured creditor. In any event last date for filing the appeal was 24-6-1999 even if the time requisite for obtaining certified copy is excluded and, therefore, the appeal was filed beyond permissible period of limitation. This plea is clearly untenable. Section 25 of the Act deals with the period of limitation. Same reads as follows : "25. Appeal (1) Any person aggrieved by an order of the Board made under this Act may, within forty-five days from the date on which a copy of the order is issued to him, prefer an appeal to the appellate authority: Provided that the appellate authority may e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd bear the official seal of the Board. (2) Every order of the Board shall be communicated under the signature of the Secretary or any other officer of the Board duly empowered by the Secretary, in this behalf." The requirements of Regulation 15 are ( a ) that the order of the BIFR shall be communicated, ( b ) the Communication has to be under the signature of the Secretary or any other officer of the Board duly empowered by the Secretary in this behalf. Obviously, the order has to be issued by the Board and the manner in which it is to be authenticated is laid down in clause (2) of Regulation 15. The learned counsel for the respondent No. 3 submitted that word used is issued and not served and the person who shall issue is not specifically provided and knowledge from any source other than BIFR would suffice. We do not find any substance in the arguments. The scheme of the statute makes it clear that issuance of the order is an act to be undertaken by BIFR. For the purpose of computation of period of limitation, date of service has to be the effective date. Otherwise a person would be rendered remediless if the order is served after forty-five days or sixty days as the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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