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2016 (6) TMI 241 - DELHI HIGH COURTApproval of a scheme by the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 - whether an unsecured creditor has the option not to accept the scaled down value of its dues, and to wait till the scheme for rehabilitation of the respondent-Company has worked itself out, with an option to recover the debt with interest post such rehabilitation'? - Whether the decision of Continental Carbon India Ltd. Vs. Modi Rubber Ltd. reached the wrong destination on account? - Held that:- The decision in Modi Rubber [2012 (7) TMI 980 - DELHI HIGH COURT]comes into conflict with the other decisions with respect to Section 18(8) of SICA, 1985 for the reason the other decisions bring out that there is no distinction between secured and unsecured creditors except those creditors who have to give financial assistance under a scheme to a sick company. In other words, every creditor stands on a same footing with respect to the power of the Board to sanction a scheme. Those creditors which have to provide financial assistance would form a sub-category and their consent alone would be necessary with respect to the financial assistance to be provided. We are therefore of the opinion that prima-facie case is made out to refer the matter to a Larger Bench on the following questions:- Whether the decision in Modi Rubber case has not properly appreciated the mandate and scope of Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”). Which would subsume the questions; Whether the Section vests BIFR with broad and extensive powers to take such measures as are necessary for revival of a sick company; and Whether without consent of unsecured creditors, the scheme for rehabilitation envisaging reduction of their debt is binding on them. The matter be placed before the Hon'ble Chief Justice for necessary directions.
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