TaxTMI 
TaxTMI 
2015 (9) TMI 1700
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....rence Case No. 83 of 2005 under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) before the Board for Industrial and Financial Reconstruction (BIFR), and the Board, at the hearing dated 31st July, 2006, declared the petitioner company as "sick industrial company" under Section 3(1)(o) of the SICA. The Respondent No.11-Bank of India was appointed as the Operating Agency under Section 17(3) of the SICA, with directions to prepare a revival scheme for the petitioner company. 3.1 The Reference Case was heard on different dates. Respondent No.11 - Bank of India - the Operating Agency submitted the Draft Rehabilitation Scheme. On 18th February, 2009, the BIFR-respondent No.12 herein issued certain directions, including for considering the request of the petitioner company for sale of the surplus assets which was to become part of the Draft Rehabilitation Scheme. 3.2 In March, 2009, the Respondent No.1-Mazda Agencies filed Civil Suit No. 315 of 2009 before the Civil Judge (Senior Division), Vadodara against the petitioner company seeking a decree for Rs. 1,45,57,874/-. The Respondent No.1 - Mazda Agencies is one of the secured creditors of....
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....he sanctioned scheme. 4. It was the first submission made at the outset by learned advocate Mr. Apurva Vakil for the petitioner that the appeal filed by respondent No.1 before the AAIFR was not maintainable since it was filed after the permissible period for limitation. Learned advocate for the petitioner relied on Section 25 of the SICA Act to submit that the appeal from order of the BIFR has to be filed within 45 days and the appellate authority may entertain the appeal after the said period, but in total not beyond 60 days on sufficient cause being shown. It was submitted that the period of 60 days expired on or around 15th September, 2013 and the appeal was affirmed on 18th January, 2014 and was actually filed 27th January, 2014 which was clearly beyond the period of 60 days. According to the submission of learned advocate for the petitioner, the appellate authority has no power to condone the delay. It was submitted that on this ground alone that the appeal was not entertained for non-compliance of limitation period, the order of AAIFR was required to be set aside. 4.1 In response to the contention about the appeal having been filed after the statutory period, lear....
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.... unsecured creditor / creditor other than the once mentioned in Section 19(1) of SICA, such creditor shall have to wait till the sanctioned Scheme is implemented to recover its dues. (iv) Respondent No.1 - Mazda Agencies being an unsecured creditor, it has the option not to accept the scaled down value of its dues and thereafter to wait till the Scheme of Rehabilitation of the petitioner company has worked itself out with an option to recover its debts post such rehabilitation. (v) The consent of the Respondent No.1 - Mazda Agencies, being an unsecured creditor of the petitioner-company, was not a precondition for sanction of the Draft Rehabilitation Scheme. (vi) BIFR had already, by its order dated 20th November, 2012 permitted the Respondent no.1 - Mazda Agencies to approach the appropriate civil court for adjudication of its dues and also provided that the decree that may be passed by such civil court, was not to be executed without the prior approval. (vii) Mazda Agencies having accepted the order dated 20th November, 2012 and pursued its civil suit, could not have, at the hearing dated 17th July, 2013 of the Reference, simultaneously raise objection to the Draft Scheme and the....
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....tention that the appeal before the AAIFR was time barred, the provisions of Section 25 of the SICA Act may be noted. Section 25 reads as under, "25. Appeal (1) Any person aggrieved by an order of the Board made under this Act may, within forty-five days from the date on which a copy of the order is issued to him, prefer an appeal to the Appellate Authority:Provided that the Appellate Authority may entertain any appeal after the said period of forty-five clays but not after sixty days from the date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. On receipt of an appeal under sub-section (1), the Appellate Authority may, after giving an opportunity to the appellant to be heard, if he so desires, and after making such further inquiry as it deems fit, confirm, modify or set aside the order appealed against a [or remand the matter to the Board for fresh consideration.]" 5.1 The order of BIFR was dated 17th July, 2013. Considering the maximum period of 60 days available under the aforesaid provisions, the appeal was required to be filed as per the submission on behalf of the petitioner latest ....
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....statutory appeals against order which prima facie seriously prejudice the rights of the aggrieved party without giving reasons is a negation of the rule of law. The emphasis for giving reasons and making the order a speaking order has travelled all along to be ingredient in a justice delivery system. In Kranti Associates (P) Ltd. and anr. v. Masood Ahmed Khan [(2010) 9 SCC 496], the court opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. 7.1 In Daya Ram v. Raghunath [(2007) 11 SCC 241], it was observed thus, "Reasons are live links between the mind of the decision taker to the controversy in question and the decision or conclusion arrived at." Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reasons is an indispensable part of a sound judicial system, reasons at least ....
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....e supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders." (Para 14) 7.4 The availability of reasons in an order passed by quasi judicial or administrative authority who has heard the contentions of both the parties works against the allegations of arbitrary exercise of power by the decision making authority. In Maya Devi (dead) vs. Raj Kumari Batra (dead) thro. lrs [(2010) 9 SCC 486], it was observed thus, "The most effective check against any arbitrary exercise of power is the well-recognised legal principle that orders can be made only after due and proper application of mind. Application of mind brings reasonableness not only to the exercise of power but to the ultimate conclusion also. Application of mind in turn is best demonstrated by disclosure of the mind. And disclosure is best demonstrated by recording reasons in support of the order conclusion." (Para 29) 7.5 In Sant Lal Gupta v. Modern Coop. Group Housing Society Ltd., [(2010) 13 SCC 336], following pertinent observation was noticed on the i....
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....ion as recorded is hallmark of great administration. In Lord Denning's view, "giving of reason is one of the fundamental of goods administration". (See Breen v. Amalgamated Engineering Union, 1971(1) All E.R. 1148) A party appearing before the Tribunal is entitled to know as, either expressly stated by the Tribunal; or inferentially stated, what it is, to which the Tribunal is addressing its mind. (paras 3 & 4) 7.6.2 The court proceeded to observed further, It is settled law that reasons are harbinger between the mind of the maker to the controversy in question and the decision or the conclusion arrived at. Natural justice demands that decision should be passed one some evidence of probative value. The object underlying rules of natural justice is to prevent miscarriage of justice and secure fair play in action. A duty to give reasons entails a duty to rationalize the decision. Reasons therefore, help to structure the exercise of discretion and a necessity of explaining why a decision is reached requires one to address one's mind to the relevant factors which ought to be taken into account. Secondly, furnishing reasons satisfies an important desir....