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2000 Supreme(MP) 764

N.K. Jain J.
Kedia Distilleries Limited
vs
Board For Industrial And ...
Decided On : 22 August, 2000

The main legal point established is that a party should first approach the relevant authority for relief before seeking intervention from the court.

Headnote:

SICK INDUSTRIAL COMPANIES - Extension of Order - Sick Industrial Companies (Special Provisions) Act, 1985, Section 22(3) - [Section 22(3) of the SICA]

Fact of the Case:

The petitioner, a public limited company, sought extension of an order passed by the BIFR under Section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Finding of the Court:

The court found that the petitioner's application for extension was not maintainable as the record had been requisitioned by the court, and the petitioner had not approached the BIFR for the necessary declaration.

Issues: The main issue was the maintainability of the petitioner's application for extension of the order under Section 22(3) of the SICA.

Ratio Decidendi: The court held that the petitioner should have first approached the BIFR for the necessary declaration before seeking relief from the court.

Final Decision: The court dismissed the petition but granted the petitioner 10 days to approach the BIFR and seek appropriate orders.

JUDGMENT

N.K. Jain J.

1. The petitioner, a public limited company, by this petition seeks extension of the order dated January 25, 1999, passed by the BIFR-- respondent No. 1--under Section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, "the SICA"), for a further period of one year or until the proceedings initiated by the petitioner-company before the BIFR by application dated June 22, 1998, are concluded.

2. The petitioner-company on June 22, 1998, made a reference to the BIFR under Section 15 of the SICA. The BIFR by its order dated August 6, 1998, declared the petitioner-company, a sick industrial company and directed for taking further measures under the provisions of the SICA for its reconstruction. Respondent No. 2 went in appeal against the said order before the AAIFR. The appellate authority vide its orders dated September 26, 1999/JuIy 1, 1999, and set aside the aforesaid order of the BIFR. Against this order of the AAIFR, the petitioner has filed a writ petition (W. P. No. 903 of 1999) before this court. This court on July 13, 1999, has passed an interim order (annexure P-2) in the following terms :

"In view of the aforesaid facts, the impugned order passed by the AAIFR shall remain in abeyance."

3. This interim order was continued till August 16, 1999, and then until further orders. The court on August 16, 1999, further directed for summoning of the records of the case from the BIFR. It appears that the record was not received until September 16, 1999, and the court, therefore, directed the Registrar of the BIFR to himself bring the record.

4. Another set of relevant facts is that the petitioner on January 18, 1999, i.e., before the order in appeal was passed by the AAIFR, made an application to the BIFR for making a declaration in terms of Section 22(3) of the SICA. The BIFR on January 25, 1999, passed order (annexure P-5) making declaration that enforcement of all contracts, agreements, assurances and other instruments to which the petitioner-company is a party, against the petitioner-company shall remain suspended for a period of three months. This order (annexure P-5) was extended for a further period of three months by the BIFR by its subsequent order dated May 14, 1999 (annexure P-6). It is this order (annexure P-5) which is sought to be extended further by the petitioner through this court as according to the petitioner the BIFR is unable to pass any order in the matter in the absence of the record of the case which has now been requisitioned by this court.

5. This prayer is opposed vehemently by respondent No. 2 who has filed a suit in the High Court of Bombay for recovery of the lease property and the lease rent against the petitioner. The Bombay High Court has already passed an order for appointing a receiver of the suit property.

6. Any declaration under Sub-section (3) of Section 22 has to be made by the BIFR. Obviously, any such declaration made can be extended by the Board itself. This court does exercise superintendence over the BIFR and can, therefore, make necessary orders in exercise of its jurisdiction under Article 226/227 of the Constitution. But the occasion for making any such order would arise only when some order/declaration is first made by the BIFR. I am afraid, this court cannot assume original jurisdiction of the Board and pass an order under that Sub-section (3) straightway without the party first approaching the BIFR in the matter. That the record of the case has been requisitioned by this court, in my opinion, is no ground for the petitioner not to first make the application before the BIFR. It is only when his prayer is refused by the BIFR that the petitioner could approach this court under Article 226/227.

7. Even otherwise the ground taken by the petitioner did not actually exist on the date the petition was made.

8. As already pointed out, the record had not reached this court on or before September 16, 1999. The declaration made on January 25, 1999, had


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