9911796707
TMI Blog2000 (12) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Board for Industrial and Financial Reconstruction (BIFR) dated 30-11-1998. By the impugned orders the authorities under the Sick Industrial Companies (Special Provisions) Act, 1985 (the SICA) directed that the sick company, namely, Allied International Products Ltd. (AIPL) be wound up under section 20(1) of the SICA. 2. To give a brief background, AIPL was promoted in the year 1962 for setting up a plant for manufacture of industrial fasteners, components and sub-assemblies for automobiles and aircrafts including nuts, bolts, screws, brackets, couplings etc. The cost of the project was originally estimated at Rs. 110 lakhs which was to be financed by equity share capital amounting to Rs. 75 lakhs and term loan of Rs. 35 lakhs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the company s Board meeting held in December 1978. The Industrial Financial Corporation of India (IFCI) and the Industrial Development Bank of India (IDBI) filed suits for recovery of their respective dues. Another round of litigation started. The company s bankers, i.e., Central Bank of India stopped the working capital assistance to the company in July 1980. In the result the operations of the company became marginal and ultimately came to a complete halt in 1985. 4. On 14-12-1979 the IFCI filed an application under section 30 of the IFCI Act in this Court praying for sale of the properties mortgaged by the company which were subject-matter of the Indenture of Mortgage and the various deeds of Hypothecation executed by the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a consultant. The progress on the case however was held up for four years on account of the above legal cases filed by the company. No efforts were however made by the promoters for revival of the unit in the meantime. In November 1994 BIFR directed OA to revise, the rehabilitation scheme. The revised rehabilitation scheme was submitted to BIFR. BIFR in March 1995 directed OA to visit the plant and revise the rehabilitation scheme again. The visit was organised in August 1995, however, the OA was excluded from the visit, as reported by OA vide its letter dated September 5, 1995. The scheme was however again revised. The revised rehabilitation scheme submitted by the OA required additional funds of Rs. 21 crore besides the cost of scheme o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 6. The Operating Agency expressed its inability to prepare any rehabilitation scheme for the company. It stated that it had been trying to devise a viable rehabilitation package since 1985. Due to the promoters inability and lack of support to furnish even critical information, no scheme could be formulated. 7. We have heard the learned counsel for the parties. We note from the order of the BIFR that before passing the impugned order dated 30-11-1998 the Board had given a show-cause notice as to why the AIPL be not ordered to be wound up under section 20(1). The AIPL was given fresh opportunity to give proposals for rehabilitation. The Board noted that no specific objections have been received from anywhere regarding pro- posed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its dues. There are huge dues on account of sales-tax against the company. Keeping all these aspects in view, the Board ordered that it would be just and equitable in public interest if the sick industry, i.e., Allied International Products Ltd. is wound up under section 20(1). This order was challenged by way of appeal before the AAIFR. The appellate authority noted that efforts made by the BIFR/OA for revival of the sick company by change in the management did not yield any positive results. It also noted that the contention of the promoters of AIPL that they could revive the company by their own resources was without any merit. The appellate authority found that the promoters either did not have or they did not propose to induct th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
