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TMI Blog2010 (8) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... n the petitioner-company and its secured creditors. The company has prayed here in this petition that the scheme of arrangement which has been considered in the meeting of the secured creditors of the Company held on 6.9.2008, as per the report of the Chairman of the meeting dated 9.2.2010, be accepted. The petitioner-company having its registered office in Mathura, U.P. vide company petition no.10 of 2008 applied under Section 391 394 of the Act for sanction of the scheme of arrangement which was approved by the Board of Directors of the Company; and for convening a meeting of the secured creditors in that regard. This Court vide order dated 14.5.2008 directed for convening the meeting of the creditors of the petitioner-company on 28.6.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad already been submitted, the Court vide order dated 9.3.2010 without going into the merits of the matter, disposed of the appeal on consensus of the parties, relegating respondent no.11 to raise the objections about the maintainability of the proceedings under Section 391- 394 before the Company Judge at the time when the matter comes for confirmation and the Company Judge was permitted to proceed with the matter only after dealing with the objections with regard to the jurisdiction of the Court. It is in pursuance of the order of the Division Bench passed in Special Appeal and on submission of the report by the Chairman when this second motion petition has been moved, respondent no.11 and respondent no.1 have filed these objections. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged pendency of a reference under Section 15 of the SICA before the BIFR/AAIFR. Sri Jaideep Mathur refuting the above objection has strongly contended that first of all there is no reference or proceeding pending before the BIFR and, therefore, the objection so raised is misconceived; the jurisdiction of the Company Judge does not stand completely ousted even if SICA being a special statute is permitted to prevail over the Act. The decision of Tata Motors (supra) is upon concession of the parties and the directions issued therein are under Article 142 of the Constitution of India and, as such, its ratio is not a binding precedent. Let me first take up the matter as to whether any reference or proceeding of the petitioner-company for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess of preparing and sanction of the scheme for the nourishment and rehabilitation of the company commences and is formulated, if possible. In ( 1998) 5 SCC 554 Real Value Appliances Ltd. Vs. Canara Bank and others and connected matters their Lordships of the Supreme Court held that an enquiry by the BIFR under Section 16 of the SICA commences as soon as registration of reference is completed after scrutiny. Meaning thereby that once a reference has been registered the enquiry commences which connotes that the reference has been entertained commencing the proceedings under the SICA before the BIFR. Admittedly, in the present case, on a second reference by the petitioner-company, reference has been registered as case no.114 of 2009. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission is that two simultaneous proceedings virtually having a same effect cannot be permitted. Undoubtedly, SICA is a special enactment vis-a-vis the Act and, therefore, it shall have priority over the Act as has been held in NGEF Ltd. Vs. Chandra Developers (P) Ltd. (2005)8 SCC 219. In Tata Motors (Supra) also it has been observed that the SICA being the special law qua the Act it shall prevail over the latter. It is only this part of the decision which has been recorded on a concession of the counsel. However, this concession in no way alters the position of law that SICA would prevail over the later, especially in the light of the further observation of the Supreme Court in this connection. The Supreme Court in the aforesaid decision w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Court. Such a conflict has been avoided by placing the SICA on a higher pedestal than the Act and by laying down that jurisdiction of the company court in the formation/acceptance of any scheme is limited and subject to SICA or a scheme framed by SICA. In the instance case, there is no such conflict as so for till date BIFR has not proceeded with and made out even a tentative scheme with regard to the petitioner-company. It may be noted that the scheme for revival or rehabilitation is permissible under SICA only on an enquiry and conclusion that the company is sick, whereas under the Companies Act a scheme can always be framed and sanctioned even if the company is not sick and is running and viable. The spectrum of the Act as such is m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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