TaxTMI 
TaxTMI 
TaxTMI 
2009 (10) TMI 968
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....998, respondent No. 2, i.e., Dunlop India Ltd was declared a sick industrial company in terms of Section 3(1)(o) of SICA and IDBI (Industrial Development Bank of India) was appointed as the O.A. (Operating Agency) under Section 17(3) of SICA to examine the viability of the company and submit its report for its revival. Subsequently, the O.A. was changed and State Bank of India was appointed as the O.A. After several hearings, the BIFR vide its order dated 19.10.2001 directed the company to sort out all issues and submit its Draft Rehabilitation Scheme through O.A. within 60 days. Pending approval of draft rehabilitation scheme, on 31.08.2006 and on 06.11.2006, respondent No. 2 filed applications before BIFR seeking its permission for issue of ₹ 2 crore equity shares of ₹ 10/- each fully paid up at par to its promoters and/or its associates on private placement basis against full consideration to be utilized for rehabilitation of the company and passing further specific directions incidental thereto for the purpose of listing these shares in stock exchanges in dematerialized form. On the basis of above request of respondent No. 2, the BIFR passed an order dated 16.03.200....
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....IFR ceased to have any jurisdiction over it and dismissed the appeal on that ground. 3. Aggrieved with the same, the present petition is filed. 4. Learned Counsel for petitioner has contended that respondent No. 2 has shown profits by sale of assets, as such, it should not have been deregistered from BIFR. In this regard, learned Counsel has referred to the order of BIFR dated 23.07.2007. It is contended that vide said order, explanation from respondent No. 2 was sought as to why immovable assets of the company had been sold without the permission of BIFR when restrictions under Section 22 of SICA were in force and further, why action should not be taken against the company/its Directors/officials under Section 24 of SICA and nullify the sale/transfer. It is contended that in the said order, BIFR also noted the contention of O.A. (SBI) that profits are there on account of sale of its assets/shares due to which the net worth has been shown positive and the same was not acceptable being not within the objectives of SICA. Learned Counsel for the petitioner has also contended that the company was declared sick on 22.06.1998 under Section 22 of the SICA due to which, petitioner was p....
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....t the dues of petitioner Bank as it has refused to settle the matter with the respondent No. 2 and is challenging the impugned order of AAIFR. It is contended that impugned order dated 03.03.2008 records that the company has come out of its sickness, against which, the petitioner Bank should not have any grievance as the same does not affect the right/interest of the petitioner Bank in any manner. It is further contended that petitioner has already acted upon the order of AAIFR by filing recovery proceedings of its alleged dues before the Debts Recovery Tribunal, Calcutta. As such, it is estopped from challenging the correctness of the said order. It is further contended that the said fact of filing O.A. for recovery of the dues is concealed by the petitioner in the writ petition, as such, petitioner is not entitled for discretional relief of this Court. It is further contended that the present petition is barred by delay and laches. 7. We have heard learned Counsel for the parties and gone through the material on record. 8. As noted above, the respondent No. 2 was declared a sick industrial undertaking in terms of Section 3(1)(o) of the SICA on 22.06.1998. O.A. had been appoint....
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....(482.68) -(433.58) 31.03.2006 (410.80) -(361.70) 31.03.2007 78.76 +242.65 18. Pursuant to financial restructuring, the petitioner transferred certain assets to its wholly owned 100% subsidiary companies, which in consideration of such transfer allotted fully paid- up equity shares to the petitioner. The surplus arising out of such transfer has inter alia set off the accumulated losses of the petitioner company. The waiver of liabilities arising out of one time settlement by banks and creditors, with necessary induction of funds by new promoters also contributed to the positive net worth. Disclosure to this effect has been made in the audited and published Balance Sheet of the petitioner as 31st March, 2007 which has been approved by the members of the company in the 80th Annual General Body Meeting held on 19th July, 2007. 19. As the net worth of the petitioner company has turned positive, it filed an application in BIFR Case No. 14 of 1998 on 23rd April, 2007 inter alia praying for an order directing deregistration of the case pending before the BIFR. The BIFR did not dispose of this matter even after lapse of 9 months. It is informed that there was a hearing before BIFR ....
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....ain free and the creditors as well as all other parties are again free to proceed against the company. When, however, obvious answers are not provided by obvious express words used by Parliament itself, the Courts fill up the gap. There is absolutely no doubt that once a company ceases to be a sick industrial company as defined by the SICA, 1985, all proceedings taken by the BIFR in relation to it must thereafter absolutely cease. The question crying loud for an answer it whether the BIFR can come to a conclusion as to the loss of its own jurisdiction in relation to any particular company which was once sick and has ceased, at least for the time being, to be sick any longer. In the absence of an express provision allowing a Tribunal to decide about its own jurisdiction, the age-old principle must be applied that an authority cannot aggregate jurisdiction to itself and accordingly it is incompetent to decide about its own jurisdiction. The Courts decide about their own jurisdiction because there is no other authority which can decide it for them, that is to say, which is at a level higher than these ordinary Courts, so as to liable to decide it for them. 23. The sickness or otherwi....
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....to the Respondent No. 2 being declared a sick company. The removal of the intervening impediment of sickness, in fact, enures to the benefit of the petitioner. Further, petitioner never raised any grievance about sale of assets by the respondent No. 2 to its sister concern before the BIFR or the AAIFR and is raising the same for the first time at much belated stage when the same does not affect the petitioner in any manner. 12. The other contention of the petitioner that due to respondent No. 2 being declared 'sick industrial company', petitioner was prevented for 10 years from initiating action for recovery of its alleged dues also has no force. During the period of sickness of respondent No. 2, the petitioner was not prevented from filing O.A. for the recovery of its dues as petitioner could have filed the same by taking permission from the BIFR but no such steps were taken by the petitioner. Fault in not initiating action for recovery lies with the petitioner. Respondent No. 2 cannot be held responsible for the same. It has also come on record that the petitioner has already taken the benefit of impugned order by filing O.A. for its alleged dues before the Debts Recovery Tribun....