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TMI Blog2004 (11) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... inding up of the company for non-payment of the liability to the extent of Rs. 3,42,800.88. 4. C.P. No. 339 of 2003 has been filed by (1) Gomatha Enterprises and (2) Jawarilal Shantilal and Company, represented by their respective power of attorney holders against the same Vasantha Mills Limited for winding up of the company for non-payment of the liability to the extent of Rs. 10,44,570. 5. The brief facts of the contention of the writ petitioner is as follows : 6. The petitioner-company, Vasantha Mills Ltd., was founded in the year 1930. It changed many hands and came under the control of one Arvind Kikani. Due to mismanagement, the company incurred huge debts and ultimately it came to be referred to the Board for Industrial and Financial Reconstruction. The Board for Industrial and Financial Reconstruction initially found that there was no chance of rehabilitating the company and recommended winding up of the company. The promoters filed an appeal before the Appellate Authority for Industrial and Financial Reconstruction which came to be dismissed. At this stage, the present promoter, K.C. Palaniswamy entered into the picture and filed a W.P. No. 199 of 1992 challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This non-payment of the flight tickets and for a few other hyper-technical reasons the Appellate Authority for Industrial and Financial Reconstruction dismissed the company s appeal on 20-3-2001, stating that reasons would follow. Thereafter it passed a detailed order on 23-3-2001. As against the said order this writ petition is filed. The three company petitions are filed by creditors. 9. The contentions of the petitioner is that the order of Appellate Authority for Industrial and Financial Reconstruction dismissing the appeal on 20-3-2001, is unsustainable in law because the day on which the order has been passed does not contain any reason, i.e., it has not passed a speaking order. The scheme stood approved on 27-9-1993. It was only at the stage of monitoring by the Appellate Authority for Industrial and Financial Reconstruction or Board for Industrial and Financial Reconstruction. On 20-3-2001, the Appellate Authority for Industrial and Financial Reconstruction dismissed the appeal stating the following reasons: "Certain directions were given by us on the last date of hearing on 1-2-2001. Inter alia, the appellant was directed to make payments of Rs. 6,000 to Shri K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for filing nominations, last date for withdrawal of nominations, date of polling, date of counting will be notified by the Election Commission only later, whereas persons connected with political affairs start their activities much earlier than the elections. The elections were said to be due during April/May 2001. As already stated, the promoter being a politician was unable to attend the hearing on 20-3-2001, before the Appellate Authority for Industrial and Financial Reconstruction. Though he has paid the air fare to the trade union leaders on other occasions, for one occasion he has failed to meet the air fare. For these two flimsy grounds, the appeal itself was dismissed without assigning other reasons. The reasons were given later by an order dated 23-3-2001. Whether the Appellate Authority for Industrial and Financial Reconstruction can dismiss the appeal summarily without assigning reasons is a point strongly canvassed by the learned senior counsel Mr. R. Krishnamurthy. Except the Hon ble Supreme Court, the High Courts and Tribunals should pass speaking orders giving reasons. Orders cannot be passed without assigning reasons stating that reasons will follow later. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. The Supreme Court is the final court in the hierarchy of our courts. Order passed by the High Court are subject to the appellate jurisdiction of this court under article 136 of the Constitution and other provisions of the statutes concerned. We thought it necessary to make these observations so that a practice which is not a very desirable one and which achieves no useful purpose may not grow out of and beyond its present infancy." (p. 202) 12. In Vajesingh Salembhai Nayak v. State of Gujarat AIR 1967 SC 148, the Supreme Court has held thus : "6. On a consideration of the language of section 17(1) of the Jagirs Abolition Act and in the context of section 20 of the Jagirs Abolition Act we are of the opinion that it is obligatory on the part of the Tribunal to decide an appeal on merits even though there is default in the appearance of the appellants and to record its decision regarding the merits of the appeal. If an appeal is dismissed for want of prosecution it cannot be said that the Tribunal has decided the appeal and recorded its decision within the meaning of section 17 of the Jagirs Abolition Act. It cannot be supposed that the Legislature intended by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (1) labour-workers, (2) banks and financial institutions, (3) State Government (sales tax), (4) State Government (urban land tax), (5) suppliers, and (6) Provident Fund Department. 16. Admittedly, the promoter has settled all the workmen under section 18(1) of the Industrial Disputes Act on 20-12-2002, and payments have been made to all the workmen in pursuance of the settlement. More than 600 workmen have received payments and only five workmen challenged the settlement under section 18(1) of the Industrial Disputes Act by filing W.P. No. 2020 of 2003 to restrain the company from implementing the settlement. Though interim injunction was granted at the initial stage, the said injunction was subsequently vacated by this court and no appeal has been preferred by the workmen. It is pertinent to reproduce a portion of the order dated 16-9-2003, in W.V.M.P. No. 232 of 2003 in W.P. No. 2020 of 2003. "5. The only point for consideration in this petition is, whether the petitioner sangam has made out a prima facie case for continuing the injunction granted on 22-1-2003. Though the petitioner sangam has claimed that it represents substantial majority of the workers of the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the settlement arrived. It is also brought to my notice that the immovable properties have to be sold to clear the dues of SBI, income-tax, property tax and other creditors. The management has also produced a copy of the agreement entered with one Subramaniam of Maruthi Textiles in respect of the sale of machinery and superstructure. With the materials furnished, I am of the view that the first respondent-management has established that the properties to be sold only to settle the remaining creditors and in such a circumstance, absolutely no loss or hardship will be caused to any one. The management has also produced details to the effect that they sold machineries in pursuance of section 18(1) settlement and raised a sum of Rs. 245 lakhs by the sale of the machineries. They also furnished break-up figure distributing the said sum of Rs. 245 lakhs in the following manner. (1)Payment to workers Rs. 130 lakhs. (2)Provident fund Rs. 30 lakhs. (3)Sales tax Rs. 12 lakhs. (4)IDBI dues Rs. 65 lakhs. After sale of the machineries and disbursement of the amount to the workers and statutory dues including the loan amount due to IDBI now the management wants to dispose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 27-8-2001, the assessee preferred an appeal in M.P. No. 1012 of 2002, which was dismissed by the Additional Appellate Assistant Commissioner on 15-3-2002, holding that the appeal is not maintainable in law as the petitioner did not file proof of payment of admitted tax of Rs. 15,35,625 before the expiry of the time limit. 3.3 Thereafter, the petitioner preferred a further appeal before the Sales Tax Appellate Tribunal, Coimbatore in CTA. No. 549 of 2002. The Tribunal by its order dated 5-2-2003, refused to entertain the appeal observing that the assessee has paid the admitted tax after the order of the Additional Appellate Assistant Commissioner. Hence the assessee preferred. P. No. 621 of 2003 before the Tamilnadu Taxation Tribunal, Chennai which confirmed the orders of the appellate authorities dated 15-3-2002, and May, 2003 by an order dated 30-9-2003, which is impugned in the above writ petition. Hence the above writ petition. . . 6. However, since counsel for the petitioner submits that the petitioner suffers with an ex parte assessment order and agrees to pay the tax components and 50 per cent of the penalty, we are inclined to interfere with the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said company petition has agreed to receive the principal amount with 9 per cent interest. As far as C.P. Nos. 96 of 1989 and 38 of 1984 are concerned, the promoter is prepared to pay the principal amount with 9 per cent interest. The petitioner is willing to settle the claim made in C.P. No. 339 of 2003 also. All claims in the said CPs to be settled in three months. All subsequent events have to be taken note of by the court while passing orders as has been held in 2003 (4) CTC 731. 22. The non-speaking order of the Appellate Authority for Industrial and Financial Reconstruction, dated 20-3-2001, as already stated, cannot be sustained in the eye of law. Being a quasi-judicial body it has to adjudicate the cases only on the merits and cannot dismiss the cases on hyper-technical reasons. Moreover the issue has reached the monitoring stage and what remains to be seen is only to monitor whether the scheme is being properly implemented. The Appellate Authority for Industrial and Financial Reconstruction cannot supply reasons subsequently which will not cure the earlier order. As already held, only the Hon ble Supreme Court has the power to pass an order, without reasons and sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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