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Issues: Whether the High Court should interfere with the BIFR and AAIFR orders recommending winding up under the Sick Industrial Companies (Special Provisions) Act, 1985 and remand the matter for consideration of a rehabilitation scheme under section 391 of the Companies Act, 1956.
Analysis: The petitions were examined on the limited scope of judicial review over expert statutory bodies acting under the Sick Industrial Companies (Special Provisions) Act, 1985. Repeated opportunities had been afforded to the companies and their promoters to place a fully tied-up and workable rehabilitation proposal, but no acceptable scheme with clear source of funds or binding finance was brought forward. The Court found that the later attempt to place a scheme under section 391 of the Companies Act, 1956 did not justify interference, particularly when the secured creditors were opposing the proposal and the financial liabilities remained substantial. The Court held that it was not sitting in appeal over the commercial assessment of BIFR and AAIFR and that remand would be an idle formality in the facts of the case.
Conclusion: The challenge to the BIFR and AAIFR orders failed, and the refusal to interfere with the winding-up recommendation was upheld.
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