1990 (3) TMI 322

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....dgment of the Court was delivered by   K. JAGANNATHA SHETTY, J.-The petitioners seek leave to appeal against the decision of the Bombay High Court in Writ Petition No. 6108 of 1987 quashing the proceedings for recovery of property tax and other expenses due from the first respondent-company. The matter arises in this way: For the purpose of prevention and revival of sick industries, the Central Government has enacted an Act called the Sick Industrial Companies (Special Provisions) Act, 1985 ("the Act"). The Act extends to the whole of India including the State of Jammu and Kashmir. It came into force (except sections 15 to 34) with effect from May 15, 1987. The Act covers only sick industrial companies or industrial companies whi....

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....yat could not recover the amount due to it from out of the properties of the sick industrial company without the consent of the Board. Section 22 provides, as far as material, as follows: "22. Suspension of legal proceedings, contracts, etc.-(1) Where, in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then notwithstanding anything contained in the Companies Act, 1956, or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the ....

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....ermining whether any industrial company has become a sick industrial company. Where the Board is satisfied that a company has become a sick industrial company, it could give a reasonable time to the company to make its net worth positive [section 17(2)]. Where it is not practicable for a sick industrial company to make its net worth positive within a reasonable time, section 17(3) steps in authorising the Board to direct any operating agency to prepare a scheme in relation to the company. The Board may specify the various measures to be considered by the operating agency. These measures are detailed in section 18. The operating agency has to prepare a scheme as per the order specified by the Board. In the instant case, the Board, by o....