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TaxTMI 
TaxTMI 
TaxTMI 
2003 (1) TMI 522
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....ber, 1993. At that time the net worth of first Petitioner Company eroded and they had accumulated losses exceeding the entire net worth. Sick Industrial Companies (Special Provisions) Act, 1985 ('SICA') was amended by Sick Industrial Companies (Special Provisions) Amendment Act, 1993. The amendment Act came into force on 1st February, 1994 whereby the definition of "sick industrial company" was substituted. It is the Petitioners case that upon amendment of SICA by Amendment Act of 1993 with effect from 1st February, 1994, the first Petitioner Company satisfied all the conditions of sick industrial company and the Board of Directors of the first Petitioner Company passed a resolution in its meeting held on 1st April, 1992 (sic) forming an opinion that Petitioner Company was sick industrial company and therefore a reference be made to the Board of Industrial and Financial Reconstruction under section 15 of SICA. Accordingly on 12th April, 1994, the reference was made. The Registrar of Board for Industrial and Financial Reconstruction (for short "BIFR") declined to register the reference on the ground that there were no workmen engaged in the first Petitioner Company and therefore it ....
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.... made within sixty days by the first Petitioner Company it was not maintainable. Relying upon the explanation appended to clause (o) of section 3(1) of SICA, the learned Counsel submitted that the first Petitioner Company shall be deemed to have become sick industrial company on 31st March, 1993 and therefore the reference ought to have been considered by the BIFR on merits and the AAIFR ought to have set aside the order of BIFR. The learned Counsel submitted that the first Petitioner Company submitted voluminous record before the BIFR to show that as on 31st March, 1993 fifty or more workers were employed in the factory of the first Petitioner Company. In substance submission of the learned Counsel for the Petitioners is that on 31st March, 1993, the first Petitioner Company established to be a sick industrial company and therefore the reference should have been entertained and considered on merits. 3. There is no dispute that in respect of the accounts for the year ended 31st March, 1993 the Auditors submitted their report on 30th August, 1993 and the accounts were finalised and approved by the Board of Directors on 30th September, 1993. The Auditors in their report made on 30th....
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....your letter dated 12-4-1994 filing a reference in Form 'A'. The reference is not in order and you were asked, vide this office letter of even number dated 24-5-1994, to furnish certain information/document by 17-6-1994, failing which the reference would be declined for registration. So far no reply has been received from you. 2. Further the Bombay High Court have appointed Court Receiver in two petitions filed by creditors against the company for its winding up. It has been the consistent approach of this Board that it should not by its orders put itself in conflict with the directions given by the High Courts and that the forum of BIFR should not be used to thwart the process in High Courts. 3. Secondly there are no workers presently working in the factory. Thus the applicant company does not have an industrial undertaking/and is therefore not an "Industrial Company" as defined in section 3(1)(e) read with section 3(1)(f) of SICA, 1985. In the light of the above, the reference is declined for registration." 6. Admittedly no Appeal was preferred against the order passed by Registrar declining registration of reference. Be it noted that Board for Industrial and Financial Reconst....
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.... Petitioner Company filed fresh reference on 11th September, 1995. The question therefore has to be seen whether on the date the reference was made on 11th September, 1995, the first Petitioner Company was sick industrial company within the meaning of section 3(1)(o) or not. The "sick industrial company" is defined under clause (o) which means an industrial company, being the company registered for not less than five years and which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth. "Industrial company" means a company which owns one or more industrial undertakings and "industrial undertakings" means any undertaking pertaining to a scheduled industry carried on one or more factories by any company. "Factory" is defined under the Industries (Development and Regulation) Act, 1951 which inter alia means where manufacturing process is being carried on with the aid of power provided fifty or more workers are working or were working thereon on any day preceding of twelve months. It is not in dispute before us that after 31st March, 1993 the factory was closed and that no payment was made towards salary or wages of any of the employees. It ....