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2014 (2) TMI 1318 - HC - Companies LawSanctioned Scheme for rehabilitation sanctioned by the BIFR - appeal of the Union of India, through the Railway Ministry, ("Railways") against an order of the Board for Industrial and Financial Reconstruction ("BIFR") concerning certain concessions to be provided by the Railways to Cimmco Birla Ltd. ("CBL") - Held that:- It is undisputed that the DRS was circulated to the Railways, for the purpose of obtaining consent and inviting suggestions/objections. No objections were filed by the Railways. It states today - for the first time since the scheme was sanctioned by the BIFR on 11.3.2010 - that the scheme was circulated to the Secretary, Ministry of Railways and then redirected to the Stores Directorate of the Ministry later (which is the concerned department, it is claimed), by which stage "hardly any time was left for filing of objection". The Railways raises this plea after almost three years of the presentation of the claim by CBL to the BIFR. No such stand was taken before, and in any event, no request for extension of time, let alone an objection taken at any stage of these proceedings before the BIRF, AAIFR, this Court or the Supreme Court in the various rounds of litigation witnessed in this matter. Thus, in terms of Section 19(2), deemed consent of the Railways to Clause 11.6 of the Sanctioned Scheme was taken, and it is accordingly binding on it. The object and purpose of Section 19 is to enable and garner support - in the form of wide-ranging concessions - by entities with which the sick company conducts business, in this case the Railways, as CBL is a wagon producer and a captive industry that supplies exclusively to the Railways. The argument that Section 19, thus, does not allow for relaxation of tender requirements in incorrect, especially in a case such as the present one, where the concession is narrowly tailored to ensure that the past performance requirement is not prejudicial to CBL only for the period of its closure. Rather than putting CBL at an unfair advantage, Clause 11.6 only requires that the period of closure be excluded from consideration, and the bids be examined competitively in all other respects, for the time. Given conclusions within the Railways‟ own ranks that Clause 11.6 does not vitiate the tender conditions, and no reasons have been provided to indicate that these concurring legal opinions are incorrect, the Court finds no reason to interfere with the application of Clause 11.6. In any case, Section 32 of the SICA prescribes that the SICA overrides any contrary provisions in any other law, except for the Foreign Exchange Regulation Act, 1973 and the Urban Land (Ceiling and Regulation) Act, 1976, let alone contractual tender conditions or policy guidelines prescribed by the Railways.
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