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2012 (10) TMI 1262
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....1 has been impugned. The impugned judgment and order was rendered while disposing of three writ petitions being W.P. No. 12377 (w) of 2010, W.P. No. 12406 (w) of 2010 and W.P. No. 12412 (w) of 2010. By the impugned judgment and order the learned Single Judge decided only one legal issue namely whether Board of Industrial and Financial Reconstruction (for short BIFR) has jurisdiction to entertain any application for reference made by the Baranagar Jute Factory Plc. which is described to be a foreign company or not. It is held by the learned Trial Judge that the above appellant being a company incorporated and further registered in England cannot maintain any application for reference before the BIFR under the provision of Sick Industrial Companies (Special Provision) Act (hereinafter referred to as 'SICA'). The short background fact leading to filing the above writ petition consequently preferring appeal is required to be recorded as follows:- The above company was incorporated in England in or about 1867. The prices of all shareholding is in pound sterling not in Indian Rupees. Admittedly, the aforesaid company incorporated for manufacturing of jute an....
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....resigned from the office of Director of the Company. On 11th November, 2009 the said two persons challenged the resignation unsuccessfully before the Appropriate Court in London. On 17th November, 2009 BIFR sanctioned the scheme of revival of the BJF. In December 2009 on M/s. Sohanlal Chandanmul and company filed a writ petition No. 1166 [later renumbered as W.P.5535 (w) of 2010] challenging the authority of BIFR to entertain the reference in proceeding No. 209/2004. However the said writ petition was withdrawn. Thereafter the above writ petition being W.P.12377(w) of 2010 instituted by Yashdeep Trexim Pvt. Ltd. Writ petitions being W.P.12377 (w) of 2010, instituted by Yashdeep Trexim Pvt. Ltd. W.P. No. 12406 (w) of 2010 was instituted by Baranagar Jute Company Private Limited Workers' and Employees' Union, W.P. No. 12412 (w) of 2010 was instituted by Daksh Vyapar Pvt. Ltd. In all the aforesaid writ petitions the common and cardinal ground was taken that the BIFR has no jurisdiction to entertain the application for reference under SICA made by and on behalf of the said BJF which is a foreign company. The learned Trial Judge allowed two of three writ pe....
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....92 of the said Act. The statute does not differentiate between a company which has its registered office in India and a company which has registered office outside India. Having regard to the purpose of SICA definition of term 'company' in section 3(d) of the Companies Act cannot be restricted to exclude company incorporated outside India, but registered in India. This would deprive its Indian shareholders, creditors and workers from the protection of SICA, offers, SICA has to be interpreted to extend the foreign company having regard to the public interest it proposes to serve to revive the company in the interest of its workers and creditors. The company was initially wound up by order dated 28th October, 1987 thereafter by an order dated 16.6.1989 winding up order was stayed approving the scheme to run the company. Thereafter the Appeal Court by judgment and order dated 18th November 2004 upset the judgment and order of the learned Single Judge dated 19th December, 2002 by which direction was given to the official liquidator to take up the winding up proceeding and also take over possession and control of the affairs of the company and to represent the company. The said ....
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....FR by challenging the reference. He contends that SICA speaks about sick industrial companies and not its unit. SICA comes into play when net worth of a company becomes negative. BJF has only one unit, and all its shareholders and directors are in India. The entire net worth of BJF is fully eroded. Section 25 of the SICA provides that any person aggrieved by an order of BIFR may within 45 days prefer appeal to the Appellate Authority. 3. Learned counsel appearing for Namakar Vinimay Pvt. Ltd. in its own appeal as well being the respondent No. 21 in F.M.A. 170 of 2012 while supporting the argument of Mr. Hirak Mitra contends additionally that in a proceeding concerning BJF instituted by Chaitan Chowdhury against Bhattar and others English Court by a judgment reported in (2010) 10 AER 1031 held that dispute concerning BJF is to resolve by Indian Court for the sake of convenience. Moreover, section 32 of SICA provides that provisions of the SICA and/or any rules and schemes made therein shall have effect notwithstanding anything contained in any other law. In support of his submission he has relied on the decision reported in case of Navnit R. Kamani vs. R.R. Kamani reported in (19....
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....A. 434 of 2005 in Company Petition No. 2 of 1987 seeking winding up of the company. By order dated 5th August 2008 Her Ladyship Hon'ble Justice Indira Banerjee did not pass any order in its favour rather the alleged claim of this writ petitioner was relegated to the suit. It is further submitted that no suit has yet been filed as such Daksh has no locus to challenge the order of BIFR, Daksh however filed an appeal against said order dated 5th August 2008 which was dismissed for default. Hence this writ petitioner/appellant is not a person aggrieved in as much as its alleged right has been protected by granting liberty to file suit. In connection with his submission a decision of the Supreme Court reported in AIR 1971 SC 385 had been cited. BIFR passed an order on 4th November, 2009. Daksh was a party before the BIFR and also filed an affidavit before it on 15th February, 2009. Daksh did not prefer any appeal against the order of BIFR. The appeal having become time barred. Daksh could not be permitted to save the period of limitation by filing writ petition against the order of BIFR. Hence the impugned judgment and order must be set aside. 5. Learned counsel for the BJF Worke....
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....Court: AIR 2009 SC 523, AIR 2008 SC 735, AIR 2008 SC 1246, AIR 1991 SC 1289. He submits that SICA is social welfare legislation made to protect the interest of the workmen of a sick industrial unit and its creditor particularly the unsecured creditors. The provisions of SICA has to be read in harmony with the provisions of Article 39(b) and 39(c) of the Constitution of India. From such context, SICA must be interpreted to include an industrial undertaking belonging to a body corporate incorporated outside India and owning an industrial undertaking in India. According to him on conjoint reading of sections 2, 3(1), 11, 35, 36, 37, 38, 59(1), 592 and 593 to 609 of the Companies Act 1956 that company registered under section 592 would also be deemed to be company under section 3(1) of the Act. Having regard to the purpose of SICA definition of the term 'company' in section 3(d) therein cannot be restricted to exclude a company incorporated outside India, but registered in India. This would deprive its Indian shareholders, creditors and workers from the protection of SICA offers. He further contends that having regard to the date of filing of the windin....
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....erent chapters under the Companies Act. When wisdom of the legislature is clear in its thought and expression as contained in the statute, no other meaning should be attributed and nothing else should be brought within its fold that is the golden rule of literal interpretation and the mischief rule and/or purposive construction rule cannot be applied. Under the literal rule word of a statute must prima facie be given their ordinary meaning, whereas for application of purposive construction/ mischief rule the precondition are - (i) when plain words of statute are ambiguous; (ii) leads to no intelligible results and (iii) if read literally, would nullify the very object of the statute. In support of his aforesaid submission relating to the rule of interpretation he has referred to the following decisions of the Supreme Court (2009) 3 SCC 709 (paragraph 22), AIR 2010 SC 671 (paragraph 6), 2010 AIR SCW 3167 = (2010) 324 ITR 170 (SC), (2001) 4 SCC 534 (paragraph 26), (2003) 1 SCC 730 (paragraph 5), (2003) 2 SCC 593 (paragraph 37)....
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....ommittee of management has been formed. His submission that needs attention of the Court is summarized hereunder: 10. The foreign company does not fall within the purview of definition of company in the Companies Act and therefore, basis of the scheme sanctioned by BIFR is wholly without jurisdiction as such it is unacceptable. The statute should not be given liberal interpretation as it is clear that company is defined under section 3 of the Companies Act, 1956 which has been adopted by and under section 3(1)(d) of SICA 1985, relates to companies formed and registered in India and does not include companies formed and registered in foreign countries. There have been two amendment in SICA whereby all those companies which were included earlier have been included in SICA. 11. Mr. Debasish Kundu, learned Advocate appearing on behalf of the Baranagar Mazdoor Sangha, respondent No. 1 in F.M.A.172 of 2012 and the respondent No. 17 in F.M.A. 170 of 2012 supports the argument of Mr. P.C. Sen and also Mr. Kalyan Bandyopadhyay. In addition thereto he submits what was not submitted before learned Trial Judge contends, for the first time as follows:- That SICA does....
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....ctory Co. Limited (SFJC) that it does not have jurisdiction over a foreign company. He is candid enough to say that above judgment of course was not placed before BIFR in this case nor even before the learned Trial Judge. Even otherwise at the time of scrutiny of the reference once the Registrar had discovered that BJF is a foreign company it should have declined to register reference at the very inception. Even if this Hon'ble Court had given direction in writ petition asking BIFR to consider the reference proceedings, it was incumbent upon BIFR to forthwith dismiss the reference on the ground that the same related to a foreign company. He fairly submits that the aforesaid points were not argued before the learned Trial Judge. He however says having regard to the fact that point goes to the root of the jurisdiction of BIFR over a foreign company, as such it is fundamental and well established principle that order and judgment passed by the Court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be embraced or relied upon even in the stage of execution and even in collateral proceedings. In support of his legal propo....
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....nless the context otherwise requires' is to be interpreted to mean that the same would be an inclusive and not an exclusive definition. This phrase in our view denotes context of Act get primacy over wordings of the definition. 15. So, it cannot be said that the Company as defined in SICA has got no other connotation. SICA is a welfare legislation made to protect the interest of the workers of a sick industrial unit and its creditors, banks as well as unsecured creditors if necessary to revive industrial undertakings. SICA being a special Act will override the provisions of the Companies Act. Whenever there is any inconsistency between the two acts SICA will prevail under section 31 of the Act. The strict interpretation cannot be attached to the definition of the term "Company" in SICA. Baranagore Jute Factory PLC undisputedly registered in UK under the provisions of Companies Act of the said country but it is also not disputed that the company has it's the only business unit in India i.e. at Baranagore, Kolkata. The Company's main and only activity is in India being the Jute Mill having approximately 4000 workers. The Company pays about 100 crore every year to worke....
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....aph 30 as follows: 30. Since the Act is a social welfare legislation intended to protect the interest of a weaker section of the society i.e. the workers employed in factories and other establishments, it is imperative for the Courts to give a purposive interpretation to the provisions contained therein keeping in view the Directive Principles of State Policy embodied in Articles 38 and 43 of the Constitution. 18. In view of the principles laid down by the Apex Court in the case of Bharat Prosad & Ors. vs. State of Bihar & Ors. reported in (2009) 6 SCC 698 the provisions of socio economic legislation is to be interpreted for furtherance of purpose of enactment but not to frustrate it. The Hon'ble Apex Court while laying down the interpretation of statute has been pleased to observe as follows: **** 17. The legislative purpose in enacting the provisions of section 48-E of the said Act is to ensure that the disputes between raiyats and under-raiyats are settled as amicably as possible and for that, detailed machinery has been provided under section 48-E of the said Act. In continuation of such legislative scheme....
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....ents, repairs, rates of hotels and eviction of tenants. **** 20. It appears from the record that by an order dated 19th December, 2002 His Lordship the Hon'ble Justice M.H.S. Ansari (As His Lordship then was) directed the Official Liquidator to take up the winding up proceedings and finalised the same in accordance with law. Further it appears from the record that by an order dated 18th November, 2004 the Appeal Court comprising of Their Lordships the Hon'ble Justice Altamas Kabir and Hon'ble Justice Alok Kumar Basu (As Their Lordships then were) have been pleased to set aside the said order and directed the Joint Special Officer to continue to oversee the management and affairs of the company. The Hon'ble Division Bench also appointed the then directors of the company to function as a "Committee of Management" for six months. 21. The Hon'ble Apex Court in the case of Radheshyam Ajitsaria & Anr. vs. Bengal Chatkal Mazdoor Union & Ors. reported in (2006) 11 SCC 771, while disposing of the application observed as follows: **** **** 46. In any event since the Company is fu....
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....clined to accept the jurisdiction on the basis that Indian Courts were the proper and convenient forum for the determination of this dispute. 24. Hon'ble trial Court has been pleased to consider that the provisions of SICA cannot be strained to meet justice of an individual case it is absolutely a matter of coincidence that the majority shareholders of BJC are Indians and its only functional unit is at Baranagar. 25. We are unable to subscribe the findings and observations made by learned Single Judge in the impugned judgment as regards the applicability of SICA in case of a foreign company registered in UK but functioning in India following and observing all the Indian Rules and Regulations as well as laws applicable time to time as framed by Indian legislature. We are also of the view that SICA is a special Act enacted for the purpose of public interest which should be viewed as beneficial legislation and also special enactment having overriding power over the provisions of Companies Act specially in an interpretation the term "Company" as defined in Companies Act as well as SICA. 26. We emphasize very word in this Act "unless the context otherwise requires" and acce....