TaxTMI 
TaxTMI 
2023 (4) TMI 909
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....re was a demand for a sum of Rs.29,64,917/- towards 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. ....
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....ding up, since OA could not locate any alternate bidder for M/s.JEL. Finally Operating Agency was 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 &....
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....Property tax 14.98 lakhs Pollution control board 1.45 lakhs These departments shall waive interest, penal interest, damages, liquidated damages and penalty for late payments if any. 13.06.2006 The Registrar of Companies, Coimbatore issued a Certificate of Registration of order of amalgamation dated 25.05.2006 passed by the BIFR for the 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 suggestio....
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....period or further period, it shall be deemed that consent has been given. 7. The learned counsel for the respondents submitted that there is no provision under the Employees State Insurance Act for waiver of interest or damages, merely because there is an approved scheme only towards interest. The aforesaid submission cannot be countenanced in view of the specific provisions of the SICA, particularly Section 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 d....