TaxTMI 
TaxTMI 
2023 (4) TMI 909
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....owards contribution, interest and damages. The said company was declared a Sick Industry by the Industrial and Financial Reconstruction (hereinafter referred to as BIFR), and a draft scheme was framed. The respondents were duly informed regarding waiver of interest and damages as per the draft scheme. Since there was no reply and response from the respondents, the BIFR proceeded further in finalising the same. As part of rehabilitation, the company known as "Jeetstex Engineering Limited" was merged with the petitioner. It is stated that with the contribution of the petitioner more than the net worth of the company namely "Jeetstex Engineering Limited", the draft scheme was approved. After the sick company was taken over by the petitioner, pursuant to the rehabilitation scheme which was put in operation under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, the respondents came up with the demand towards liability of the former company "M/s.Jeetstex Engineering Limited" towards ESI amount. In the above background, the order of the third respondent is challenged before this Court by way of this writ petition. 3. The learned counsel appearing for the petiti....
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....s able to locate LMW as a resourceful party and LMW after lot of persuasion finally agreed to take over the assets and liabilities of M/s.JEL for a consideration of Rs.35 crores despite the value of assets was Rs.25.74 crores. 20.02.2006 Operating Agency submitted a draft rehabilitation scheme to the BIFR on the basis of the proposal given by LMW. 23.03.2006 Based on the rehabilitation scheme submitted by Operating Agency, the draft rehabilitation scheme (DRS) prepared by the board taking cut off date as 31.03.2005 and ordered circulation of the DRS to all the concerned for consent as required under Section 19(2) read with Section 19(1)of SICA and fixed the hearing to hear objections/suggestions on 25.05.2006 and directed the Central/State Government Departments/Authorities etc to communicate their consent/objections within 60 days from the date of receipt of the order. DRS suggested the following reliefs and concessions, a) 1st charge holders - 60% of principal dues b) 2nd charge holders- 28.44% of principal dues c) unsecured creditors- 10% of their outstanding as per the books of M/s.JEL d) PF - 43.81 lakhs &nb....
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....e amalgamation of M/s.JEL with LMW. 24.09.2007 Appeal Nos.233/2006, 201/2007, 247/2006 and 248/2006 were filed by Vijaya Bank, ARCIL, ATE Enterprise and Income Tax before the Appellate Authority for industrial and financial reconstruction, New Delhi questioning the order sanctioning the scheme on 25.06.2007. All the appeals were dismissed. 4. On 23.03.2006, based on the rehabilitation scheme submitted by the Operating Agency, a Draft Rehabilitation Scheme (DRS) was prepared by the Board and directed the circulation of the draft rehabilitation scheme to all the stakeholders concerned for consent as required under Section 19(2) read with 19(1) of the Sick Industrial Companies (Special Provisions) Act 1985 (hereinafter referred to as SICA) and fixed the hearing for objections and suggestions to 25.05.2006. Despite all the State and Central Government authorities were directed to communicate their consents and objections within 60 days from the date of receipt of the order, the respondents have not raised any objection or given any consent. It is true that the respondents have not given their consent. Later, it is admitted that the petitioner has invested money on the basis of the S....
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....n 19-3A of the Act which is extracted hereunder: On the sanction of the scheme under subsection (3), the financial institutions and the banks required to provide financial assistance shall designate by mutual agreement a financial institution and a bank from amongst themselves which shall be responsible to disburse financial assistance by way of loans or advances or guarantees or reliefs or concessions or sacrifices agreed to be provided or granted under the scheme on behalf of all financial institutions and banks concerned. 8. The learned counsel appearing for the petitioner relied upon a judgment of a Division Bench of Delhi High Court in Director General of Income Tax Vs. BIFR dated 23.03.2011 which is held as follows: "10. In the context of the above discussion we would like to reproduce specifically the provisions of Section 32(1) of SICA. Section 32(1) of the SICA reads as follows: 32. EFFECT OF THE ACT ON OTHER LAWS: (1) The provisions of this Act and of any rules or schemes made there under shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973(46 of 1973) and t....