( 1 ) THE petitioner seeks quashing of order dated 2. 5. 1996 passed in appeal by the Appellate Authority for Industrial and Financial Reconstruction (hereinafter REFERRED TO to as AAIFR), and the order dated 27. 4. 1995 passed by the Board for Industrial and Financial Reconstruction (hereinafter REFERRED TO to as BIFR) and directing the Operating Agency, namely, the Industrial Credit and Investment Corporation of India (hereinafter REFERRED TO to as ICICI) to prepare a fresh scheme of rehabilitation/revival of the petitioner s industry.

( 2 ) THE short facts are, the petitioner set up a mini cement plant at Gunial Gaon in the backward district of Dehra Dun with an investment of more than Rs. 5 crore. The petitioner is a public limited company. It started commercial production from its factory in November, 1982 and provided employment to about 400 persons.

( 3 ) LATER certain petitions were filed in the Hon ble Supreme Court of India praying for closure of industrial and mining activity in the entire Doon Valley as they were polluting and degenerating ecology. These petitions succeeding, as a consequence petitioner s running industrial unit was ordered to be closed down.

( 4 ) THE relevant extracts of the orders passed by the Hon ble Supreme Court of India are quoted as under:- @subpara = "we cannot go back upon our earlier order that the cement factory shall not be permitted to in at the site. Shifting from this place has, therefore, got to be done. " @subpara = "a. R. C. Ltd. (petitioner), a private cement manufacturing concern located within the Mussoorie and Dehradun Development Authority Jurisdiction has been closed down by orders of this Court mainly on account of being a polluting instrumentality in the area. Under our orders, the question of shifting this factory to a non-objectionable area has been under consideration for over four years. Since, it was a running concern and has been closed down under Court s orders we thought it our moral responsibility to provide an alternative site to which the factory could be shifted and the Doon Valley would no more be threatened by yet another industrial unit. " @subpara = "in terms of the Court s decision that the said area would not be used for any manufacturing process which would affect the environment by pollution, under Court s order the manufacturing process has been stopped. As there was already a huge investment, we agreed to monitor the shifting of the factory and made detailed directions on 20th September, 1991. "

( 5 ) DUE to this resultant closure of the operational activities, the petitioner company became a sick industrial company and, thus it applied by way of reference to the BIFR. This reference was rejected, holding that the petitioner was not an industrial company within the definition of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called SICA) vide its orders dated 26. 12. 89/20. 6. 90. The petitioner aggrieved filed an appeal before the AAIFR. The AAIFR in view of the orders passed by the Supreme Court overruled the orders passed by the BIFR. Thereafter, the entire matter again went back to BIFR. The BIFR by order dated 14. 2. 1994 appointed ICICI as the Operating Agency to examine the company s viability and submit its report for its rehabilitation. Thereafter, the BIFR passed its order dated 9. 11. 1994, recorded, as per the ICICI s consultants the cost of the scheme remained at Rs. 32. 85 crores and this included land, machinery and building cost of Rs. 27. 96 crores and other costs like payment to creditors of Rs. 69 lakhs, cash losses during implementation period of Rs. 363 lakhs and margin money of Rs. 56 lakhs. the financing plans envisaged unsecured loans from promoters of Rs. 11. 56 crores, interest from funds/deposits from housing complex Rs. 17. 65 crores and interest funding by Banks and Institutions Rs. 363 lakhs. After considering various submissions, the BIFR observed that the contributions fro