TaxTMI 
TaxTMI 
2015 (5) TMI 1260
X X X X Extracts X X X X
X X X X Extracts X X X X
....ccordingly discharged. W.P.(C) 4600/2015 & C.M. No.8318/2015 (stay) 1. The petitioner challenges the order of the DRAT dated 22.04.2015 by which it refused to entertain an application for suspension of proceedings before the Debt Recovery Tribunal (DRT) in OA No.57/2008 on the ground that a scheme under Section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "SICA") was pending. The DRT before which the petitioner made the application for suspension declined it, observing that the original reference made sometime in 1997 had worked itself out and relied on order dated 4.10.2001 for that purpose. Learned counsel appearing for the petitioner urges that the impugned order is clearly erroneous. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....accumulated losses within a reasonable time as per the agreed package (copy enclosed) in terms of the provisions of Section 17(2) of the Act. 7. The Bench also made it clear that it would be for the company to approach State Govt. concerned for further exemption from Sales Tax and Income Tax Deptt. for seeking exemptions from the provisions of Income Tax Act. In the event of any liability arising on this account, it would be for the company/promoters to bring the requisite funds to meet the shortfall. 8. ICICI would monitor the repayment as per the settlement, on their own accord, along with secured creditors and others concerned and report to the Board if there were defaults in repayment of settled dues. The Company is directed to su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....harged from the purview of BIFR. 3. Now, therefore, we consider that the company has ceased to be a sick industrial company within the meaning of Section 3 (1) (o) of the Act and has also discharged all its major financial obligations; its case is no longer required to be dealt with under SICA by the BIFR. The proceedings in the case are, therefore, closed. However, the unfulfilled obligations, if any, under the approved package would continue to remain in force for the unexpired period and shall be discharged by all concerned accordingly." 4. The petitioner-company continued to function and carry on business. On 5.3.2008 the first respondent - M/s Alchemist Asset Reconstruction Company Ltd. (respondent company) took measures under Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntly both by DRT and DRAT. 6. Mr. Jayant Bhushan, learned senior counsel contends that given the mandate of Section 18 of SICA - which is to be considered together with Section 22, measures and claims cannot be pursued by any creditor or person claiming against the company without the permission of BIFR. He relied upon the orders dated 27.12.1999 and the last preferred order dated 4.10.2001 to say that without seeking the permission of BIFR, the proceedings before DRT could not have continued. It was submitted in this context that the only exception enabling a secured creditor to continue with proceedings is by virtue of third proviso to Section 15(1) of BIFR which was introduced when SARFAESI was brought into force by virtue of Second Sch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n as may be by order in writing, whether it is practicable for the company to make its net worth exceed the accumulated losses within a reasonable time. (2) If the Board decides under sub-section (1) that it is practicable for a sick industrial company to make its net worth exceed the accumulated losses within a reasonable time, the Board, shall, by order in writing and subject to such restrictions or conditions as may be specified in the order, give such company as it may deem fit to make its net worth exceed the accumulated losses. (3) If the Board decides under sub-section (1) that it is not practicable for a sick industrial company to make its net worth exceed the accumulated losses within a reasonable time and that it is necessar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he event of failure of this exercise or if in the first instance under Section 17(1) BIFR feels that it is not possible to revive the company within the existing parameters, that under Section 17(4), it proceeds to take the measures which ultimately culminate in a rehabilitation scheme under Section 18(1). The facts discussed in the present case clearly demonstrate that BIFR was to first explore the possibility of revival of the company by issuing the directions it did on 27.12.1999. The order no doubt refers to a package - but that is not in the sense as understood in Section 18(1). It is not the case of the parties that draft rehabilitation scheme was ever circulated, considered, objected to, revised or finally sanctioned by BIFR. In fact....