9911796707
TMI Blog2011 (5) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... 28/2006 and order dated 8-3-2006 passed by the Board for Industrial and Financial Reconstruction ('BIFR') in case No. 379/2003. For the sake of convenience the aforementioned orders will be collectively referred to as the impugned orders. 2. In brief the petitioner before us is aggrieved by the order passed by the BIFR which has been sustained by the AAIFR whereby the reference filed by it has been held to be non-maintainable on the sole ground that on the date of institution of the reference it was not an industrial company within the meaning of section 3(1)( e ) of the Sick Industrial Companies (Special Provisions) Act, 1985 ('SICA'). 2.1 The reasoning adopted by the BIFR in passing order dated 8-3-2006 is briefly that the petitioner had filed its reference on 17-10-2003. However, even prior to the said date the Pradeshiya Industrial Investment Corporation of Uttar Pradesh ('PICUP'), which was one of the creditors, had in exercise of its powers under section 29 of the State Financial Corporation Act, 1951 ('SFC Act') sold the plant and machinery of the petitioner in an auction in March-April, 2003. Given these facts the BIFR came to the conclusion that the petitioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there were defaults in respect of the second loan transaction whereby, a sum of Rs. 22.05 lakhs was lent to the petitioner. It is also averred that the petitioner had arrived at a one-time settlement (OTS) with PICUP. Since admittedly the petitioner was unable to adhere to the discipline of paying the agreed instalment as per the OTS, PICUP exercised its powers under section 29 of the SPF Act pursuant to the defaults committed by the petitioner. A notice was issued by PICUP on 21-8-2002. Consequent thereto, on 16-9-2022 PICUP took possession of the plant and machinery. It is also not disputed that the plant and machinery was auctioned and possession handed over to the auctioned-purchaser in March-April, 2003. 4.2 The petitioner, thereafter, filed a reference with the BIFR on 17-10-2003. It appears that the petitioner received a letter from the Dy. Distt. Magistrate informing that PICUP had auctioned even the immovable property, that is, land and building situate at C-294, sector-10, Noida, U.P ('land building'). The petitioner has averred in the writ petition that it had received a communication dated 15-4-2004 from PICUP, informing that it had received a highest bid of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2006 or was renumbered in 2006 is not clear. Both the aforementioned writ petitions were dismissed by a common order dated 17-9-2009. The Division Bench of the Allahabad High Court in the operative part of its order while dismissing the writ petitions observed as follows : "According to us whether repayment loan amount by the petitioner company to the PICUP, automatically creates right in favour of the petitioner company to get back the property from purchaser under the auction sale and/or whether PICUP had right only in respect of the plant and machinery but not in respect of land and building, therefore, the transfer of landed property is bad and/or, whether before completion of BIFR proceedings or without permission of such forum, the sale has rightly taken place and/or whether the guarantor has co-extensive right of repayment of loan amount and/or whether there is any question of payability of interest, all such questions seem to be diversified academic question before the writ court at present. Moot point for consideration is whether the respondent No. 5 being a private party can be able to retain possession of the property in question in spite of repayment of loan amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s passed by the authorities below. Insofar as the first issue raised before us is concerned, it is quite clear that the petitioner ceased to remain an industrial undertaking on the auction and the consequent possession of the plant and machinery in March-April, 2003. Therefore, on the date when reference was filed by the petitioner under section 15(1) of the SICA, the reference was not maintainable. The argument of the petitioner advanced in the petition and before us that it could set up a new plant and machinery is, to say the least rather curious since if it otherwise has finance to set up a new plant and machinery it logically does not require the protective regime of SICA to resuscitate itself. Therefore, the plea raised by the petitioner that the period of twelve (12) months had to be counted from the end of the accounting/financial year and not from the date when the reference was filed cannot lead us astray from the fact that the engagement of the requisite number of workers would only be relevant if otherwise the petitioner on the date of reference was in possession of plant and machinery. The petitioner took its own time in approaching the court by way of a writ petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
