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TMI Blog2006 (11) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... nless a fresh scheme is sanctioned and implemented under the Sick Industrial Companies (Special Provisions) Act, 1985, by the fourth respondent. 2. I have heard Mr. R. Karthikeyan, learned counsel appearing for the petitioner as well as Mr. Shanmugasundaram, learned Government advocate (taxes) for the first respondent and Mr. F.B. Benjamin George, learned counsel appearing for respondent Nos. 5 and 6 and perused the records. 3. The prayer as sought for by the petitioner cannot be countenanced for two reasons. Firstly, the provisions for recovery is very much present in the Tamil Nadu General Sales Tax Act (for short, TNGST Act ). Secondly, the embargo placed upon any further proceedings based upon the provisions of the Sick Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o frame an appropriate scheme. To enable the BIFR to do so, certain preliminaries are required to be followed. It starts with the reference to be made by the board of directors of the sick company. The BIFR is directed to make appropriate inquiry as provided in sections 16 and 17 of the Act. At the conclusion of the inquiry, after notice and opportunity afforded to various persons including the creditors, the BIFR is to prepare a scheme which shall come into force on such date as it may specify in that behalf. It is in implementation of the scheme wherein various preventive remedial or other measures, are designed for the sick industrial company, steps by way of giving financial assistance, etc., by Government, banks or other institutions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that though the language of section 22 of the Act is of wide import regarding suspension of legal proceedings from the moment an inquiry is started, till after the implementation of the scheme or the disposal of an appeal under section 25 of the Act, it will be reasonable to hold that the bar or embargo envisaged in section 22(1) of the Act can apply only to such of those dues reckoned or included in the sanctioned scheme. Such amounts like sales tax, etc., which the sick industrial company is enabled to collect after the date of the sanctioned scheme legitimately belonging to the revenue, cannot be and could not have been intended to be covered within section 22 of the Act. Any other construction will be unreasonable and unfair a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s worth quoting the supporting opinion of Justice B.P. Jeevan Reddy in the Corromandal Pharmaceuticals case ( supra ): "...The fact, however, remains that it is no longer thought advisable to keep alive inefficient and uneconomic industries by injecting public funds or in the name of safeguarding the employment of the workers. And here is this Act, a product of the era of protectionism, seeking to keep alive sick companies by pumping in funds mostly public funds and by providing various concessions. In the process, nobody enquires why a particular industrial company has become sick, viz., whether it is an induced one or whether it is on account of factors beyond their control. The object of the Act is undoubtedly laudatory but it m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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