Limited judicial review of sick company rehabilitation schemes: exclusion of one unit upheld where company-wide revival was rational and material-based.

Judicial review of a statutory rehabilitation scheme for a sick industrial company is limited: interference is warranted only if the decision is irrational, perverse, discriminatory or made without consideration of relevant material. The Board's task is to assess revival of the company as a whole, not to secure compulsory revival of one unit in isolation. Applying that approach, the exclusion of the Adilabad unit from the rehabilitation scheme was upheld because the scheme was formulated after consideration of feasibility, expert material and the competing interests of the company's units. The challenge failed, the scheme was left undisturbed, and implementation was directed to proceed expeditiously.

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Issues: Whether the approval of the rehabilitation scheme excluding the Adilabad unit from revival was vitiated by arbitrariness, non-application of mind, discrimination or failure to consider relevant material, so as to warrant interference under Article 226.

Analysis: The dispute arose in the context of a sick industrial company under the special rehabilitation framework of the Sick Industrial Companies (Special Provisions) Act, 1985. The Board was required to consider revival of the company as a whole, not the standalone rehabilitation of one unit. The scheme had been formulated after prolonged consideration of feasibility, expert material and the competing interests of the company's multiple units. The mere fact that concessions were offered for the Adilabad unit did not compel the authorities to revive that unit in preference to the company-wide scheme. In judicial review, interference with a statutory rehabilitation scheme is limited and is justified only when the decision is shown to be irrational, perverse or taken without due consideration of the relevant material. The Court found that the rehabilitation decision had already been examined by the Delhi High Court and that the reasoning adopted there, as well as the statutory object of reviving viable units while preventing winding up of the company, supported the impugned scheme.

Conclusion: The challenge to the exclusion of the Adilabad unit failed. The rehabilitation scheme was not shown to be arbitrary or illegal, and no ground for interference was made out.

Final Conclusion: The writ petition was held to be without merit and the statutory rehabilitation scheme was left undisturbed, with a direction that it be implemented expeditiously.

Ratio Decidendi: In judicial review, a court will not interfere with a statutorily sanctioned rehabilitation scheme for a sick industrial company unless the decision is shown to be irrational, perverse or taken without consideration of relevant material; the Board is concerned with revival of the company as a whole, not the compulsory revival of a particular unit.

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