9911796707
TMI Blog1998 (10) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... st and equitable that the sick industrial company, the petitioner herein, be wound up, the Board for Industrial and Financial Reconstruction ( BIFR ), has directed issuance of notice under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 ( the Act ), for hearing objections/suggestions or alternative proposals, if any, and the order under annexure 2 of the Industrial Promotion Investment Corp. of Orissa Ltd. calling upon the petitioner to clear up the dues amounting to Rs. 83,47,932 which are outstanding against it. 2. The petitioner-company was set up for the purpose of producing and marketing sal seed oil and sal seed extracts for which the basic raw material is sal seed. The company was established by obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and issued directions to it to examine the viability and to prepare a scheme for rehabilitation of the company. 4. The facts leading to the passing of the impugned notice, annexure-1, can best be ascertained from the counter-filed by the operating agency, i.e., opposite party No. 5 herein wherein it is averred that pursuant to the direction under section 17(3) of the Act, the operating agency had prepared a scheme and submitted the same before the Board on19-3-1992. The operating agency had proposed rehabilitation of the unit at an estimated cost of Rs. 311.03 lakhs which was to be shared by the financing agencies. However, in order to make the scheme successful, the operating agency wanted approval of opposite party No. 1 with spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of Rs. 1,11,21,133 as on August 15, 1992. It is averred that when the company became sick, in terms of rehabilitation scheme, IPICOL had contributed a sum of Rs. 18 lakhs. It is stated that though a scheme was formulated for making the company viable, it could not work out as the then managing director, Mr. A. Samantray, did not agree to raise funds by way of promoters contribution. According to IPICOL before any rehabilitation package is worked out, it becomes necessary to identify a resourceful investor which is interested to invest Rs. 50 lakhs in this company for its revival. It is submitted that time and again IPICOL had extended its co-operation and finance, but in spite of this, the unit could not function and ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Board to declare the unit sick. E. The basic raw material, i.e., sal seed is not freely available as the trade therein has been nationalised. F. The Board appointed opposite party No. 5 as the operating agency and directed it to formulate a scheme for rehabilitation. G. The scheme was, accordingly, drawn up which required an additional sum of Rs. 311.03 lakhs for revival/rehabilitation of the unit. H. The promoters of the petitioner-company have expressed their unwillingness to provide promoters share for the revival package whereafter, the Board on a prima facie view that it was not possible to revive the unit, issued the order under annexure 1. I. The scheme under section 18 of the Act is not found to be feasible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basic idea is to revive sick units, if necessary, by extending further financial assistance after thoroughexamination of the unit by experts and only when the unit is found to be no more capable of rehabilitation, the option of winding up may be resorted to. But, the question is, should financial assistance be provided time and again and every time the unit becomes sick or is there a stage at which it has to be stopped. According to the petitioner, it should go on and on, whereas according to the opposite parties it can go on up to a particular stage and no further. Indeed, keeping in mind the intention of the Legislature a unit should be assisted up to a point and up to a particular limit but further assistance or rehabilitation has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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