Board communication without formal application of mind is not an order in law; reconsideration required for inquiry decision.

A Board communication conveyed through an officer's letter, without a formal decision taken after application of mind, was not an order in law. Information placed before the Board had to be independently considered to decide whether inquiry under section 16(1)(b) of the Sick Industrial Companies (Special Provisions) Act, 1985 was warranted. The material could not be treated as a suo motu proceeding merely because it was placed before the Board. The matter was therefore required to be reconsidered afresh to determine whether inquiry should be initiated, and the earlier communication and appellate order became inoperative.

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Issues: Whether the communication issued by the BIFR could be treated as an order in law and whether the matter required reconsideration by the BIFR under section 16(1)(b) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The communication conveying the Board's view, without a formal decision after application of mind, did not satisfy the requirement of an order in the legal sense. Under section 16(1), the Board could make an inquiry not only on a reference under section 15, but also on information received or on its own knowledge regarding the company's financial condition. On the facts, the petitioner's request was information placed before the Board for inquiry and was not rightly treated as a suo motu proceeding. The Board was therefore required to consider the acceptability of the information and decide whether action under section 16(1)(b) was called for.

Conclusion: The communication was not a valid order in law, and the BIFR was directed to reconsider the matter and decide afresh whether inquiry under section 16(1)(b) should be initiated.

Final Conclusion: The petition succeeded to the extent of securing reconsideration by the BIFR, and the earlier communication and appellate order were rendered inoperative.

Ratio Decidendi: A Board's view communicated through an officer's letter, without a formal decision taken after application of mind, is not an order in law, and information placed before the Board must be independently considered for possible inquiry under section 16(1)(b).

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