9911796707
TMI Blog2001 (1) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... demand for manufacture of electrical cable industries, footwear industry and moulded goods, pipes, agricultural houses, films and various other materials at a different site. Upon consideration of the said scheme, the BIFR rejected the said scheme by a reasoned order passed on 17-4-2000 in BIFR Case No. 2144 of 1998 contained in Annexure H to this petition. It is this order which is the subject matter of challenge in this writ petition. 3. Mr. Bhaskar Sen, the learned Counsel for the petitioner, assails the said order on various grounds. According to him, the rejection of the scheme on the ground that the scheme was not a rehabilitation proposal but a setting up of a new project is bad in law. In such circumstances SICA was promulgated for revival of sick companies and not sick units as is apparent from the preamble of SICA. This contention is supported by him upon a reference to section 3(1)( o ) under which Sick Industrial Company was defined to be a Company. Therefore, in order to rehabilitate the company, it is immaterial as to what project the company would take up. It is also not necessary that the same equipment or the unit is to be used or even the same site has to be u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interfering with the decision of the Tribunal. 5. With regard to the question of maintainability of the writ petition by the counsel for the Bank of Baroda (BoB) it appears to be strange for him. According to him, the BoB was reprimanded for its inept handling of the case and that it was their duty to prepare a scheme under section 17(3) and BoB having failed in that regard, it is not open to it to raise such a question, particularly when the revival and not the winding up will enure to its benefit. With regard to the maintainability that being a provision for appeal the writ Court should not interfere, he contends that where on the face of the order it appears that BIFR had failed to exercise its jurisdiction and that it has proceeded on the basis of certain extraneous consideration, the writ is maintainable, despite alternative remedy. In this context he relied on Appropriate Authority v. Smt. Sudha Patil AIR 1999 SC 181 wherein it was held that a High Court in exercise of jurisdiction under article 226 is entitled to interfere where the Tribunal had failed to consider some irrelevant material or has considered some extraneous or irrelevant materials or that the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der at Joka. Thus, it is not only diverting its activities to altogether a new field but also it is shifting its project to a different site. In fact, it is not a revival of the company but in effect it was the establishment of altogether a new company. It would also necessitate the change its name as has been proposed. That apart, he has pointed out that the land at Falta has already been transferred to someone else by the company. Therefore, it is not at all a revival of the sick industry. He then contends that the order passed by the BIFR is appealable. There being an adequate alternative efficacious remedy, the writ petition cannot be maintained. The questions that are being raised are not free from doubt. It is also not abundantly clear that the view taken by BIFR is so erroneous that no reasonable man can take the view and as such it is not possible to hold that the order passed by BIFR, is wholly without jurisdiction so as to attract the exceptions to the rule of alternative remedy. He had also pointed out from the materials before this Court that the present case does not satisfy any of the tests for excepting the normal rule of alternative remedy. He had sought to distingu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealing with sick industrial companies difficult. A need has, therefore, been felt to enact in public interest a legislation to provide for timely detection of sickness in industrial companies and for expeditious determination by a body of experts of the preventive, ameliorative, remedial and other measures that would need to be adopted with respect to such Companies and for enforcement of the measures considered appropriate with utmost practicable despatch." 10. The Act was enacted for loss of production, loss of employment and loss of revenue, locking up of investable funds of banks and financial institutions which are of serious concern to the Government and the society at large. It aimed at full utilisation of the productive industrial assets and afford maximum production of employment and optimise the use of the fund of the Bank and financial institutions. Therefore, the object of revival of the company or rehabilitation thereof was intended to secure employment, revenue payable to the Government, funds invested by Banks and financial institutions by using of the productive assets. This act is never aimed at helping the Board of Directors themselves or only to facilitate ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt at its discretion may entertain the same. Having regard to the facts and circumstances of this case, the main ground on which the scheme was rejected was that the diversion was incompatible with the scheme and object of SICA and as such cannot be accepted. For this purpose, it is not necessary to determine any disputed question of fact, in order to determine the question raised by Mr. Sen. It is a simple question whether the ground on which the Tribunal had rejected the scheme of rehabilitation, was within its jurisdiction or could be a ground valid for rejection of the scheme. It is pure and simple, a question of law which is required to be gone into. In the circumstances, I propose to decide the question by over-ruling the preliminary objection raised on behalf of the respondent. 14. As discussed above, the object of SICA was to rehabilitate a company so as to secure recovery of the amounts due to the Banks and financial institutions by salvaging the productive assets rehabilitating the potentially viable sick industrial company. The company as referred to must be industrial company. In the present case, if the land on which the industry of the company is situated is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees or anything else. Thus the said ratio cannot be attracted in the present case. Admittedly, as held in Subhash Kumar Bhualka s case ( supra ), the scheme may be formulated even by someone else. But the present case is not one such a case where it is necessary, after lapse of such a long time, to prepare another scheme. It is also a settled proposition that all efforts shall be made for revival of the sick company which is the object of SICA. But in case, the revival is not possible in that event, it may be liquidated. It is not that revival is to be effected at any cost, even if it is outside the scope or purview of SICA or it is not at all viable or it will not serve the purpose of salvaging the productive assets or utilising the employment of the employees or otherwise. If after efforts having been made, it appears that it is not viable, in that event, it can certainly be liquidated for which appropriate orders are to be passed by BIFR according to its own discretion applying its own mind. Thus, the decision in the case of B.P. Choudhury ( supra ) does not help us in the facts and circumstances of the case. 16. In the present case, as I have found that the main groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the sick industrial company by change in, or takeover of, the management of the sick industrial company; ( c )the amalgamation of ( i )the sick industrial company with any other company, or ( ii )any other company with the sick industrial company; [here-after in this section, in the case of sub-clause ( i ), the other company, and in the case of sub-clause ( ii ), the sick industrial company referred to as transferee company ]; ( d )the sale or lease of a part or whole of any industrial undertaking of the sick industrial company; ( da )the rationalisation of managerial personnel, supervisory staff and workmen in accordance with law; ( e )such other preventive, ameliorative and remedial measures as may be appropriate; ( f )such incidental, consequential or supplemental measures as may be necessary or expedient in connection with or for the purposes of the measurses specified in clauses ( a ) to ( e )." 20. Sub-section (1) relates to the preparation of the scheme. A scheme has to be prepared according to the provision contemplated in sub-section (1) of section 18. Any scheme which is beyond the scope and ambit of sub-section (1) is not a scheme which can ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
