9911796707
TMI Blog2000 (8) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction of BIFR established under the Sick Industrial Companies (Special Provisions) Act 1985 (in short the 'Act') to deal with a reference made under Section 15 of the said Act? 2. Undisputed factual position is that BIFR refused to entertain application for reference made by the petitioner under Section 15 of the Act, on the ground that an official liquidator had been appointed, in terms of the consent arrangement made between the parties. The observations in this regard made by the BIFR are in the following terms: After hearing the submissions made and having regard to the facts of the case, the Bench dismissed the case as nonmaintainable in view of the aforesaid orders by Mumbai High Court read with Consent Terms about a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointment of the liquidator, the Board of Directors had no jurisdiction to move the BIFR by passing a resolution. Such a submission cannot be accepted. In a winding up petition the liquidator is appointed to protect the assets of a company for the benefit of its creditors, secured and unsecured and others. It is not the function of the official liquidator to start the process of rehabilitation of the company as is aimed at under the Act. Despite appointment of the official liquidator, the Board of Directors continue to hold all residuary powers for the benefit of the company which includes the power to take steps for its rehabilitation. The Board of Directors in the instant case were not in any way by any judicial order debarred from taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has suppressed many materials and vital aspects. It is also submitted that the petitioner is siphoning away funds by surreptitious disposal of assets with the intention of defrauding the creditors. 6. In Real Value Appliances Ltd. Vs. Canara Bank and Others , it was observed that when Section 16(1) says that BIFR can conduct enquiry in such a manner as may deem fit , the said words are intended only to convey that wide discretion is vested in the BIFR in regard to the procedure it may follow for conducting an enquiry under Section 16(1) and nothing more. In fact once the reference is registered after scrutiny, it is, mandatory for the BIFR to conduct an enquiry. The Act is intended to revive and rehabilitate sick industries before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
