TaxTMI 
TaxTMI 
2006 (9) TMI 280
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....declared as sick unit by the Board for Industrial and Financial Construction (for short "the Board"). A rehabilitation scheme was framed by the Board but it was declared to have failed by an order on 12-7-2001. By reason of the said order, however, Industrial Development Bank of India (IDBI) was appointed as an operating agency. A fresh report was submitted by the said operating agency on 20-3-2003 which was accepted by the Board whereupon a fresh rehabilitation scheme was sanctioned on 8-4-2003. 3. In the meanwhile, the Respondent No. 2 herein filed a claim petition before the Industry Facilitation Council (for short "the Council") Respondent No. 1 herein in terms of the provisions of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 (for short "the 1993 Act"). Before the Council, the Appellant herein raised a plea that it had been declared to be a sick company by the Board and as such the matter should not be proceeded further. The Council, however, opined that only because the Appellant-Company has been declared sick by the Board, it would not bind the Council to take a decision in the matter. It passed an award directing : "Th....
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....id Scheme, the award made in favour of the Respondents finds place in the category of 'Dormant Creditors'. The liabilities of the Appellant vis-a-vis the Respondent No. 2 was, therefore, indisputably a subject-matter of the said Scheme. The High Court, in our opinion, committed an error in proceeding on the premise that the awarded amount had not been included and could not be included in the sanctioned rehabilitation scheme, the same being part of transactions which took place after 21-11-1997 ignoring the revised scheme made in the year 2003. 10. The High Court furthermore opined that inclusion of the Respondent as a deferred creditor in the fresh rehabilitation scheme dated 8-4-2003 also did not affect the situation in favour of the Appellant presumably on the premise that the 1993 Act was a special Act. 11. Before we advert to the contentions raised by the learned counsel for the parties, we may notice sub-section (2) of section 6 of the 1993 Act which reads as under : "(2) Notwithstanding anything contained in sub-section (1), any party to a dispute may make a reference to the Industry Facilitation Council for acting as an arbitrator or conciliator in respect of the m....
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.... further, except with the consent of the Board or, as the case may be, the Appellate Authority." 17. The said provision, thus, mandates that no proceeding, inter alia, for execution, distress or the like against any of the properties of the industrial company and no suit for recovery of money or for the enforcement of any security, shall lie or be proceeded with further, except with the consent of the Board or as the case may be, the Appellate Authority. The said statutory injunction will operate when an inquiry had been initiated under section 16 or a scheme referred to under section 17 is under preparation and/or inter alia a sanctioned scheme is under implementation. It is not disputed before us that the amount awarded in favour of the Respondent by the Council finds specific mention in the sanctioned scheme which is under implementation. 18. The award of the Council being an award, deemed to have been made under the provisions of the 1996 Act, indisputably is being executed before a Civil Court. Execution of an award, beyond any cavil of doubt, would attract the provisions of section 22 of the 1985 Act. Whereas an adjudicatory process of making an award under the 1993 Act....
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....t that is likely to be caused in the implementation of the scheme. Section 22 was also held to be of wide import as regards suspension of legal proceedings from the moment, the inquiry is started till after the implementation of the scheme or disposal of the scheme under section 25 of the 1985 Act. It was categorically held : ". . .it will be reasonable to hold that the bar or embargo envisaged in section 22(1) of the Act can apply only to such of those dues reckoned or included in the sanctioned scheme. . . ." The ratio laid down in the said decision, therefore, instead of assisting the Respondent assists the Appellant. 23. In Maharashtra Tubes Ltd. v. State Industrial & Investment Corpn. of Maharashtra Ltd. [1993] 2 SCC 144 this Court held : "On the other hand, the 1985 Act was enacted, as its preamble manifests, with a view to timely detection of sick or potentially sick companies owning industrial undertakings, the identification of the nature of sickness through experts in relevant fields with a view to devising suitable remedial measures through appropriate schemes and their expeditious implementation. Here the emphasis is to prevent sickness and in cases of sick ....
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....ned : ". . .When two or more laws operate in the same field and each contains a non obstante clause stating that its provisions will override those of any other law, stimulating and incisive problems of interpretation arise. Since statutory interpretation has no conventional protocol, cases of such conflict have to be decided in reference to the object and purpose of the laws under consideration. . . ." The endeavour of the court would, however, always be to adopt a rule of harmonious construction. 30. In NGEF Ltd. v. Chandra Developers (P.) Ltd. [2005] 8 SCC 219, interpreting sub-section (4) of section 20 of SICA, it was held : "It is difficult to accept the submission of the learned counsel appearing on behalf of the respondents that both the Company Court and BIFR exercise concurrent jurisdiction. If such a construction is upheld, there shall be chaos and confusion. A company declared to be sick in terms of the provisions of SICA, continues to be sick unless it is directed to be wound up. Till the company remains a sick company having regard to the provisions of sub-section (4) of section 20, BIFR alone shall have jurisdiction as regards sale of its assets till an or....