9911796707
TMI Blog1997 (8) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantially similar to the facts of the other appeals. 2. The said appellant was, on 9th February, 1988, declared a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 (now referred to as "the Central Act"). On a reference under Section 15 of the Central Act made on 23rd December, 1989, an enquiry under Section 16 was made and a scheme was sanctioned by the Board for Industrial and Financial Reconstruction (now referred to as "the Board") for the said appellant's benefit and it was at the relevant time under implementation. 3. For the Assessment Years 1983-84 and 1984-85 the said appellant was in arrears of sales tax under the Orissa Sales Tax Act, 1947 (now referred to as "the State Act"). Rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of the Vallabh Glass Works' judgment. The High Court expressed its inability to do so. 6. Hence, these appeals. 7. For the purposes of appreciating the controversy, Section 22(1) of the Central Act needs to be set down. "22. Suspension of legal proceedings, contracts, etc. - (1) Where in respect of an industrial company, an enquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Cmpanies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the said Board, this Court said, the various proceedings set out under Section 22(1) of the Central Act were deemed to have been suspended. Creditors could then approach the said Board for permission to proceed against the sick company for recovery of their dues and the said Board, at its discretion, could accord such approval. If approval was not granted, the creditors' remedy was not extinguished. It was only postponed. The section provided for exclusion of the period during which the remedy was suspended while computing the period of limitation for recovery of the dues. 9. Learned Counsel for the appellants submitted that in the case of Vallabh Glass Works this Court had dealt with proceedings for recovery of dues under a State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clauses (b) and (c) of Article 39 of the Constitution", namely, "that the ownership and control of the material resources of the community are so distributed as best to serve the common good" and "that the operation of the economic system does not result in the concentation of the wealth and means of production to the common detriment". The Central Act does not impair or interfere with the rights of the States to legislate with respect to sales tax under Entry 54 of List II of the Seventh Schedule. In the larger interest of the industrial health of the nation, Section 22 of the Central Act requires all creditors seeking to recover their dues from sick industrial companies in respect of whom an enquiry under Section 16 is pending or a sche ..... X X X X Extracts X X X X X X X X Extracts X X X X
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