Mandatory reference under sick company law is not absolutely time-barred, but belated filings may be refused for abuse or bad faith.

A reference under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 is not barred by an absolute sixty-day limitation; the provision imposes a mandatory duty to act promptly, and late filing does not by itself extinguish the reference. However, the Board may refuse a belated reference where the delay shows supine indifference, lack of bona fides, or an attempt to misuse the Act's protection. On the facts, the short delay and absence of any creditor objection meant rejection solely for lateness was unsustainable, and the reference had to be reconsidered in accordance with law.

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Issues: (i) Whether the period of sixty days prescribed in section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 is a period of limitation barring a reference to the Board if filed beyond that time. (ii) Whether the Board could reject the reference solely on the ground of delay, without examining whether the delay reflected supine indifference, lack of bona fides, or an attempt to misuse the protection of the Act.

Issue (i): Whether the period of sixty days prescribed in section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 is a period of limitation barring a reference to the Board if filed beyond that time.

Analysis: The statutory scheme treats the reference requirement as an obligation cast on the Board of Directors once sickness is noticed, either on finalisation of audited accounts or earlier upon formation of opinion. The time prescription in section 15(1), read with the definition of the date of finalisation in section 3(1)(da), is linked to timely detection and expeditious remedial action. Contravention is visited by the penal consequence in section 33(1), which indicates that the provision creates a mandatory duty rather than a jurisdictional bar. The remedial character of the Act and the continuing nature of industrial sickness also support the view that the Board cannot treat the sixty-day period as an absolute limitation period.

Conclusion: The sixty-day period in section 15(1) is not a strict period of limitation; it is a mandatory statutory obligation, and a reference is not barred merely because it is filed after sixty days.

Issue (ii): Whether the Board could reject the reference solely on the ground of delay, without examining whether the delay reflected supine indifference, lack of bona fides, or an attempt to misuse the protection of the Act.

Analysis: Although section 15(1) does not impose a limitation bar, the Board is not bound to entertain every delayed reference mechanically. Where the facts show supine indifference, absence of bona fides, or that the reference is made only to obtain the protective umbrella of the Act, the Board may refuse to register or entertain the reference on grounds of delay and laches. On the facts, the delay was short and the secured creditor did not object to registration, so the rejection of the reference only on the ground of time was unsustainable.

Conclusion: The reference could not be rejected solely for delay on the facts of the case, and the impugned orders were liable to be set aside.

Final Conclusion: The rejection orders were quashed, the reference was directed to be reconsidered afresh in accordance with law, and the petition succeeded.

Ratio Decidendi: A reference under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 is governed by a mandatory duty to act within the stipulated time, not by an absolute limitation bar, though the Board may refuse a belated reference where delay reflects abuse, want of bona fides, or supine indifference.

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