Foreign companies excluded from sick company law; tribunal reference and creditor challenge failed for lack of jurisdiction and locus.

The Companies Act definition of "company" was read into the Sick Industrial Companies (Special Provisions) Act, 1985 to mean a company formed and registered under the Companies Act, 1956; a foreign company registered under section 591(2) was not included. The wider definition in section 34 was treated as confined to that provision and not extended to sections 15 to 19. On that basis, the Act was held inapplicable to a foreign company and the reference to the Board for Industrial and Financial Reconstruction was invalid. The writ petition by an unsecured creditor was also held not maintainable because the petitioner lacked a present enforceable right in the scheme proceedings.

---

---

Issues: (i) Whether the Sick Industrial Companies (Special Provisions) Act, 1985 applies to a foreign company carrying on business in India; (ii) Whether the writ petition filed by an unsecured creditor was maintainable.

Issue (i): Whether the Sick Industrial Companies (Special Provisions) Act, 1985 applies to a foreign company carrying on business in India.

Analysis: The definitional scheme of the Act was examined by reading section 3(1)(d) of the Sick Industrial Companies (Special Provisions) Act, 1985 with section 3 of the Companies Act, 1956. The expression "company" in the Act was held to mean a company formed and registered under the Companies Act, 1956, and a foreign company registered under section 591(2) of that Act was not treated as a company formed and registered under the Act. The wider meaning given to "company" in section 34 of the Sick Industrial Companies (Special Provisions) Act, 1985 was held to be confined to that provision and not to control sections 15 to 19. The Court declined to read additional words into section 3(1)(d) and held that the statute could not be stretched by interpretation to include a foreign company.

Conclusion: The Sick Industrial Companies (Special Provisions) Act, 1985 does not apply to a foreign company; the reference of the company to the Board for Industrial and Financial Reconstruction was invalid.

Issue (ii): Whether the writ petition filed by an unsecured creditor was maintainable.

Analysis: The petitioner had been relegated by the Company Court to a civil suit for enforcement of its claim, and that order remained operative. As the petitioner was not covered by the revival scheme and had no present legally enforceable right in the Board proceedings, it lacked locus to challenge the scheme before the writ court.

Conclusion: The writ petition filed by the unsecured creditor was not maintainable.

Final Conclusion: The scheme sanctioned by the Board was quashed for want of jurisdiction, while one writ petition failed for lack of maintainability and the remaining writ petitions succeeded.

Ratio Decidendi: Where a statute incorporates the definition of "company" from the Companies Act, 1956, the term cannot be expanded by interpretation to include a foreign company unless the statutory context clearly requires such enlargement; a tribunal acting on a non-applicable statute acts without jurisdiction.

---