The judgment emphasizes the delicate balance between creditors' rights, company rehabilitation, and public interest, highlighting the importance of upholding the approved rehabilitation scheme despite individual creditors' demands.

( 1 ) THIS case depicts the usual dilemna which creditors, particularly the secured creditors/financial institutions, are faced with whenever a question of reconstruction and revival of a sick company comes up before the Board for industrial and Financial Reconstruction (for short, 'bifr') under the Sick industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as 'sica') or before a Company Judge of the High Court in petitions filed under section 391-394 of the Companies Act, 1956.

( 2 ) THE respondent No. 1 company, namely, M/s. Datar Switchgear Ltd. (hereinafter referred to as 'the company'), had approached the BIFR when it had become a sick industrial company. The reference was registered and ICICI Bank was appointed as the operating agency to formulate the scheme. The scheme has been sanctioned by the BIFR to which most of the secured creditors have consented and are ready to accept the dues as per the sanctioned scheme, that too in a staggered manner. However, the petitioner bank feels aggrieved. Admittedly, the principal amount payable by the company to the petitioner was to the tune of Rs. 9 crores and according to the petitioner, after adding interest and other charges, the total amount that became payable rose upto Rs. 20. 36 crores. As per the sanctioned scheme, the petitioner is to be paid Rs. 9 crores. The petitioner is even agreeable to this. However, the petitioner wants that this payment be made upfront in lumpsum and not over a period of 7 years, as provided in the scheme. The petitioner had challenged the order of the BIFR by filing an appeal before the Appellate Authority for Industrial and Financial Reconstruction (for short, 'aaifr'), but was unsuccessful and, in these circumstances, the present petition is preferred.

( 3 ) BEFORE adverting to the legal issue that arises, we may take stock of bare minimum facts necessary for determining the controversy involved.

( 4 ) THE petitioner is a Co-operative Bank governed by the Maharashtra State Co-operative Societies Act, 1960. The respondent is a company registered under the companies Act having its registered office at Nasik. The petitioner bank also has its registered office at Nasik. The petitioner had advanced a loan in the sum of Rs. 9 crores to the respondent (Rs. 3 crores against the security of immovable property and another sum of Rs. 6 crores towards unsecuredloan ). In the year 2001-02, the company started defaulting in payment of its dues and, thus, became one of the Non-Performing Assets (NPA) of the petitioner bank. Since the company had become sick, it filed a reference with the BIFR, which was registered as BIFR Case No. 260/2001. On 31. 7. 2002, BIFR declared the company as a sick industrial company under Section 3 (1) (o) of the SICA. The process of rehabilitation/re-construction of the company accordingly started. In the month of June 2005, it submitted a draft rehabilitation proposal to all the secured creditors, including the petitioner bank. Some modifications were made to this proposal and the modified rehabilitation proposal was submitted again to all the secured creditors, based on which a joint meeting of the creditors was held on 5. 12. 2005. All the secured creditors approved the proposal. Case of the petitioner bank is that it objected to the same, but was overruled by the company and other creditors, though the company maintains that even the petitioner had agreed to this proposal. We shall advert to this aspect at a later stage.

( 5 ) PROCEEDING further with subsequent events, we may mention that BIFR thereafter passed orders dated 29. 6. 2006 circulating the draft rehabilitation scheme to all the concerned parties, including the petitioner bank, under Section 19 (2) read with Section 19 (1) of the SICA Act inviting their objections/suggestions. Thereafter, BIFR held its sitting on 14. 9. 2006 and approved the scheme. As per this scheme, the petitioner bank is to be paid in a phased manner a