9911796707
TMI Blog2003 (10) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... s had not come forward with any other proposal, with fully tied-up means of finance, for their consideration for revival of the petitioner-company, the BIFR has confirmed its earlier prima facie opinion, recorded in its order dated 14 May, 2003. By the said order, the BIFR has opined that the petitioner sick company is not likely to make its net-worth exceed the accumulated losses within a reasonable period of time and, therefore, it would be just, equitable and in public interest to wind up the company. 2. Briefly stated, the material facts on the basis whereof the afore-noted opinion has been formed by the BIFR are as follows : The petitioner-company is a manufacturer of blood products. By virtue of some orders passed by the Drug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rseas co-promoter had failed to bring in his contribution of Rs. 372.25 lakhs; the company/existing promoters did not take any action to enter into a legally binding agreement with the new/incoming promoter, stipulating a firm commitment of the latter to ensure timely induction of his contribution in terms of the sanctioned scheme; the company, instead of asking extension of time from the BIFR at that stage to mobilise the funds to the tune of Rs. 145 lakhs from alternate sources to pay the financial institutions as one time settlement, should have mobilised adequate funds from available alternate sources and cleared the dues of the financial institutions/banks; there was no other revival proposal with fully tied-up means of finance for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed amount of the outstanding dues, no other financial institution had received any amount in terms of the package approved by the BIFR. During the course of hearing before the BIFR it was submitted by counsel for the company that the company was willing to deposit Rs. 145 lakhs in an interest bearing no lien account with IFCI within 15 days from that date but subject to confirmation by the BIFR that the scheme sanctioned by it on 22 March, 2001 for rehabilitation of the company would be restored. Clarifying that the scheme sanctioned by them had already been declared as "failed", primarily because of the failure of said overseas co-promoter and even the existing promoters to infuse the envisaged amount of promoters contribution of Rs. 372 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntentions urged on behalf of the petitioner. With a view to test the seriousness and resourcefulness of the petitioner-company, during the course of hearing, we had asked learned counsel for the company, if they were still prepared to deposit the afore-noted amount of Rs. 145 lakhs in a no lien account . Learned counsel, on instructions, stated that the company could deposit the said amount provided it is clarified that the amount so deposited shall be appropriated only against the one time settlement arrived at with the financial institutions in terms of the sanctioned scheme. This proposition was vehemently opposed by learned counsel for the respondents on the ground that the financial institutions had agreed for one time settlement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not serve any purpose. 7. In view of the afore-noted background facts, we are of the view that the BIFR was fully justified in declining to grant further time to the petitioner-company to deposit Rs. 145 lakhs. A rehabilitation scheme sanctioned under the Act binds the industrial company; the promoters and the creditors and is in the nature of a contract. If one of the participants in the scheme fails to discharge his obligation, the entire scheme falls apart. True that under section 18(3)( b ) of the Act power inheres in the BIFR to modify the scheme and grant extension of time to the parties concerned to accomplish their obligations in the process of rehabilitation but in the instant case the BIFR has found that not only the new fore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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