Judgment

KASLIWAL, J. :- Special leave granted.

2. The appellant Crescent Iron and Steel Corporation Limited (in short the appellant-company), a private limited company was running a foundry. The appellant declared a lock out in its foundry in July 1985. The appellant-company made a reference to the Board for Industrial and Financial Reconstruction (hereinafter referred to as the BIFR) u/S. 15(1) of the Sick Industrial Company (Special Provisions) Act, 1985 (in short SICA). During the pendency of the said reference the appellant-company made an application to the State of Maharashtra under S. 25-0 of the Industrial Disputes Act, 1947 for seeking permission to close down its undertaking located at Goregaon and requested the BIFR to revive the undertaking at another location preferably in a backward area of Maharashtra. The appellant-company also alleged to have paid up all the secured and unsecured creditors of the company as well as all the workers employed in the foundry. The BIFR on 15-2-1991 passed an order proposing the winding up of the appellant-company. On 16-5-1991 at a general meeting of the appellant-company a special resolution was passed by the shareholders that the order of BIFR dated 15-2-1991 was not in the interest of the company. The appellant-company forwarded the aforesaid special resolution along with a letter dated 21-5-1991 requesting the BIER to revoke its order dated 15-2-1991. The BIFR vide its order dated 23-5-1991 observed that it was not possible to adopt any measures for revival of the company and reiterated its stand that the appellant-company should be wound up.

3. Aggrieved against the aforesaid order of the BIFR dated 23-5-1991, the appellant-company filed an appeal before the Appellate Authority for Industrial and Financial Reconstruction, New Delhi. The Appellate Authority by its order dated September 13, 1991 upheld the order of the BIER and did not find any reason to take a different view. The Appellate Authority further held that even carrying out the same activity at the new site does not constitute rehabilitation of a sick unit. It also held that developing of the land for commercial activity also does not constitute rehabilitation of a sick unit and there was no provision in the SICA to drop a case, once a reference has been made and heard by the BIFR. The appellant-company has now come in appeal before this Court challenging the aforesaid order of the Appellate Authority.

4. It was contended by Mr. Ashok Desai, learned senior counsel appearing for the appellant-company that during the pendency of the reference before the BIFR the shares of the appellant-company held by Voltas Limited, were transferred in favour of the present shareholders, after obtaining approval of the concerned authorities. The new management had settled liabilities of all the creditors, workersdues, as well as government dues, by arranging funds of their own. As regards the claims of the Canara Bank, the dues had been settled to the satisfaction of that Bank and in case of United Bank of India, part of the dues had been settled and for the balance amount undertaking had been given, supported by bank guarantee to the satisfaction of that bank. All the workers of the foundry had also voluntarily resigned and have been paid their dues, except for two workers whose whereabouts could not be traced. The final settlement of the dues of the workers was done with a view to shifting the location of the industrial undertaking outside the metropolis of Bombay and for establishing a new foundry unit. It has now been submitted by Shri Desai that the State Government by its order dated 13-7-1992 has also taken the view that no permission for closure under S. 25(0) of the Industrial Disputes Act, 1947 would now be necessary. The aforesaid letter of the Government of Maharashtra dated 13-7-1992 has been placed on record. It was thus submitted that it would not be in the interest of justice to wind up the company.

5. Mr. Desai also subm