Delay and laches do not defeat a writ without a bona fide explanation; BIFR could still incorporate Section 72A relief in the scheme.

Delay and laches barred the writ challenge because the petition was filed nearly eleven months after the AAIFR order without a satisfactory explanation; administrative processing and governmental approvals were held insufficient for delayed litigation. On the merits, amendment of Section 72A of the Income-tax Act did not impliedly extinguish the express power preserved by Section 32(2) of the Sick Industrial Companies Act. The BIFR remained competent, while sanctioning an amalgamation scheme, to direct inclusion of the Section 72A tax benefit in the rehabilitation scheme without the earlier recommendation procedure. The statutory scheme and prior Supreme Court authority supported that approach.

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Issues: (i) Whether the writ petition challenging the AAIFR order was liable to be dismissed on the ground of inordinate delay and laches; (ii) Whether, after the amendment of Section 72A of the Income-tax Act, 1961, the BIFR retained the power under Section 32(2) of the Sick Industrial Companies (Special Provisions) Act, 1985 to direct that the benefit of Section 72A be incorporated in the rehabilitation scheme.

Issue (i): Whether the writ petition challenging the AAIFR order was liable to be dismissed on the ground of inordinate delay and laches.

Analysis: The writ petition was filed almost eleven months after the AAIFR order, and no satisfactory explanation for the delay was placed before the Court. The explanation that governmental sanctions and internal processing consumed time was found insufficient, particularly in light of the principle that State authorities must show a reasonable and bona fide explanation for delayed litigation.

Conclusion: The challenge suffered from delay and laches.

Issue (ii): Whether, after the amendment of Section 72A of the Income-tax Act, 1961, the BIFR retained the power under Section 32(2) of the Sick Industrial Companies (Special Provisions) Act, 1985 to direct that the benefit of Section 72A be incorporated in the rehabilitation scheme.

Analysis: The amended Section 72A dispensed with the earlier requirement of a Central Government declaration on the recommendation of the specified authority, but it did not render Section 32(2) otiose. Section 32(2) continued to provide that, in the case of amalgamation of a sick industrial company under a scheme framed under the Act, the benefit of Section 72A would apply with the modification that the BIFR could exercise the power without any recommendation by the specified authority. The statutory scheme and the earlier Supreme Court authority supported the view that sanction of an amalgamation scheme by the BIFR necessarily carried the authority to make the relevant direction in the scheme itself.

Conclusion: The BIFR was competent to direct inclusion of the Section 72A benefit in the scheme, and the AAIFR's view affirming that approach was correct.

Final Conclusion: The petition failed both on delay and on merits, and the impugned administrative determination was sustained.

Ratio Decidendi: A statutory amendment removing one procedural requirement does not impliedly extinguish an express power preserved by a parallel provision, and where the statutory scheme entrusts the rehabilitative authority with sanctioning the amalgamation, it may incorporate the corresponding tax benefit in the scheme itself.

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