TMI Blog2004 (6) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... us and/or any other appropriate writ, order or direction in the like nature quashing and setting aside the order of the BIFR dated December 31, 1997, in Reference Application No. 24/96, under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, at Annexure F and order dated 21-7-1998 passed by the Appellate Authority at Annexure G; (B)Pending hearing and final disposal of this petition, Your Lordships be pleased to stay and suspend the operation and implementation of the order of the BIFR dated December 31, 1997, in Reference Application No. 24/96, under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, at Annexure F, and the order dated 21-7-1998 passed by the Appellate Authority at Annexure G; (C) Ex parte ad interim relief in terms of prayer (B) may kindly be granted; (D)Such other and further reliefs as may be deemed just and proper in the facts of the case may be granted." 2. It is averred in the petition that Nanikram Shobraj Mills Ltd., (Mill Company) and its associate units, Modern Silk Mills, Crown Silk Mills and J.K. Sovirana Textile Mills are situated at Saraspur and Sobhraj Park, Ahmedabad; the units at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has even otherwise erred in law by not considering relevant factors and the order is contrary to the Scheme and object of the Act. B. ( i ) The Court should mould relief in light of subsequent developments; and alternatively, ( ii ) even if the order is found to be valid in law, in light of the changed fact situation pass an appropriate order to do complete justice between the parties. 6. Elaborating on the submissions made as aforesaid, it was submitted by Mr. Joshi that it was not even a case of inadequate consideration but a case of non-consideration; the Board being final fact finding body ought to have considered the Scheme for revival and given reasons as to why the said Scheme was not acceptable, while in fact, no reasons have been assigned. That the Appellate Authority had also not taken care to examine the Scheme on merits and the reasons assigned by the Appellate Authority were based on irrelevant factors. That both the Board and Appellate Authority had failed to consider the Scheme of the Act with a special reference to sections 18 19 of the Act. 6.1 It was further submitted that it was well established that subsequent facts have to be taken into considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition had been admitted and provisional liquidator was appointed by this Court by an order made on 23-7-1999. That in the circumstances, the order made by the Board and confirmed by the Appellate Authority was proper and the petition was required to be rejected. It was further submitted that, in the alternative, even if the Court found that there was some deficiency in the order made by the Board and the Appellate Authority considering the subsequent events there was no case for remanding the matter to the Board, and that the proposal which was not accepted by the operating agency was not the same which was accepted by secured creditor under directions of the Court. That under directions of the Court in Company Petition No. 2 of 1998 and allied matters some of the assets of the Mill Company had already been sold and the petitioner had even been paid Rs. 50 lakhs out of such sale proceeds as ordered by the Court. Therefore, under the circumstances, the petition was required to be rejected. 7.3 He placed reliance on : ( i ) Gujarat Trade Union Manch v. Gujarat State Textile Corpn. [2000] 99 Comp. Cas. 461 (Guj.) ( ii )Unreported decision - Gujarat Trade Union Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 dated 10-2-2003. 9. Mr. R.D. Dave, learned Advocate appearing on behalf of General Workers Union submitted that the orders of the Board and the Appellate Authority cannot be said to be erroneous or suffering from any jurisdictional error. That the proposed Scheme was contrary to interest of the workers as a whole as the petitioner was only representing a small group of workmen; that the Cooperative Society had been registered subsequently; i.e., subsequent to the filing of the petition. That merely because the Scheme had not been considered to the satisfaction of the petitioner it was not permissible in these proceedings for the Court to reweigh the evidence to decide whether the Scheme was beneficial or not. It was contended that considering the provisions of Sections 17 18 of the Act no public interest was involved as the proposal was only for the revival of a part of the unit and the Scheme did not provide for either change of management or measures to be taken for financial reconstruction of the Company. 9.1 That it was permissible to file a Scheme under Section 391 of the Companies Act, 1956 and the present proposed Scheme did not involve shareholders or the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -imposed limitations and not arbitrarily. The High Court does not sit as an Appellate Court : interference with pure findings of fact and appreciation of evidence is not permissible. Reappreciation of evidence cannot be undertaken. Even if on same set of facts, circumstances and evidence on record a different view may be possible that by itself is not enough to permit the High Court to intervene. A mere wrong decision does not clothe the High Court with jurisdiction, unless it is shown that the Tribunal has reached a decision without any evidence in support of same, or that it has considered evidence which is partly relevant and partly irrelevant. In short, arrived at a decision no reasonable person would arrive at. The High Court confines itself to the question of legality and is concerned only with whether : ( i )decision making authority exceeded its power; ( ii )committed an error of law; ( iii )committed a breach of the rules of natural justice; ( iv )reached an unreasonable decision; ( v )abused its powers. The High Court must while examining the decision making process ensure that the same is not capricious; irrational; discriminatory or violative of Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of 31-12-1997 made by the Board does not assign any reasons and hence is invalid in law is an incorrect statement in the context. 15. However, what is more material is that the said order has merged in the order of the Appellate Authority and the Appellate Authority has not only registered the appeal filed by the petitioner, but entertained the same and decided the same on merits. May be ultimate decision is not to the satisfaction of the petitioner but that by itself is not sufficient to permit this Court to exercise the extraordinary and discretionary power conferred under article 226 of the Constitution. It does not bear repetition that a mere wrong decision by itself does not permit the Court to vest itself with jurisdiction unless it is shown that the Appellate Authority arrived at the decision without any evidence in support of the same. None of the aforesaid factors exist in the present case so as to warrant any interference. It is also not a case where any jurisdictional error has occurred, viz., where jurisdiction has been exercised in absence of jurisdiction, or where the Appellate Authority has failed to exercise jurisdiction vested in it; nor is there any erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is obligatory on the High Court to order winding-up of the sick industrial company once it receives an opinion from the Board in this regard without examining the correctness of such opinion, on hearing the concerned parties....." (p. 607) This decision has been confirmed by the Supreme Court in the case of V.R. Ramaraju ( supra ) in the following words : "It is obvious that sub-section (2) has to be construed to mean that the High Court in deciding the question of winding-up of the company has to take into account the opinion of the Board forwarded to it under sub-section (1) and is not to abdicate its own function of determining the question of winding-up. So read, sub-section (2) does not suffer from any infirmity. This in substance is the view taken by the High Court in the impugned order." 17. Thus, the legal position is that an order made by the Board and/or confirmed by the Appellate Authority under the provisions of the Act does not operate as a binding order insofar as the Court taking up the Company matters is concerned. Even after receipt of the opinion from the Board and/or Appellate Authority the Company Court is entitled to look into the merits of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the BIFR dated December 31, 1997, in Reference Application No. 24/96, under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (at Annexure "F"). (C)Your Lordships may be pleased to consider and approve the scheme of revival as proposed by the applicant in respect of Nanikram Shobraj Mills Limited (at Annexure "B"), and/or, be pleased to direct the erstwhile Operating Agency to consider the same and place its analysis and report before this Hon ble Court for further directions; (D)Pending the hearing and final disposal of the application, this Hon ble Court may be pleased to : ( i )stay further proceedings pursuance to the order of the BIFR dated December 31, 1997. In Reference Application No. 24/96, under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (at Annexure "F"). ( ii )consider and approve the scheme of revival as proposed by the applicant in respect of Nanikram Shobraj Mills Limited (at Annexure "B"), and/or, be pleased to direct the erstwhile Operating Agency to consider the same and place its analysis and report before this Hon ble Court for further directions; (E)An ex parte ad interim relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. The Provisional Liquidator shall be at liberty to incur the necessary expenses from the funds available with him or made available by the I.D.B.I. in the first instance. (D)The Provisional Liquidator shall proceed to make inventory and prepare a report of the assets of the company including its plant and machinery, land and building, goods finished or semi-finished, raw materials and other movables and shall also carry out inventory of the books, documents and all other papers of the company lying in the premises. This inventory shall be carried out within 15 days after giving notice in that respect to the parties hereto. (E)The Provisional Liquidator shall appoint a Government approved Valuer for preparing a valuation report in respect of the assets of the company. The Valuer shall be appointed in consultation with the secured creditors and the workers representative. The Valuer shall submit such report to the Official Liquidator within 21 days from the date of appointment of such Valuer. A copy of his report shall be submitted to this Court and if any party desires to have a copy thereof, it will be open to such party to apply before the Court. (F)On receiving the repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has received valuer s report and on or before 28-2-2000 he shall furnish a list of assets which might be required by the workers co-operative for the purpose of running the unit if the scheme which is to be proposed by the workers co-operative is ultimately sanctioned. It has, been further submitted by him that the workers co-operative shall be in the position to submit the proposed scheme on or before 10-3-2000. It is directed that in the meantime the sale committee should convene its meeting and do the needful as directed by this court in the order passed on 23-7-1999. S.O. to 16-3-2000." 23. The petitioner moved Company Application No. 113 of 2000 seeking extension of time envisaged in the aforesaid order dated 22-2-2000 to submit its proposed Scheme by a period of 21 days, and also sought direction that further list of assets required for the proposed Scheme as per the technical appraisal report be permitted to be given to the Official Liquidator. On 15-11-2000, after hearing the learned Counsel for the parties, the Court made the following order : "After having heard the learned Counsel for the parties and without entering into the merits of the order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present petition. Hence, for this additional reason also the present petition is not required to be entertained as the relief sought for by the petitioner can be equally available in the proceedings in Company Petition No. 2 of 1998 and Company Application No. 292 of 1998 and cognate matters. 27. The aforesaid directions vide order dated 23-7-1999 in Company Petition No. 2 of 1998 have created a situation whereby it is not possible to hold that the orders of the Board and the Appellate Authority are bad in law. As can be seen from paragraph No. 5 of the said order the petitioner was permitted to present a revised scheme : therefore, till that date, i.e., 23-7-1999, no acceptable scheme was available on record. Even the list of assets required for revival/running of weaving unit was not available as is evident from Direction F of the said order dated 23-7-1999. Not only that : the said list was not available on 22-2-2000 as submitted by the Official Liquidator and recorded in order dated 22-2-2000. Thereafter, the petitioner moved Company Application No. 113 of 2000 seeking extension of time upto 31-3-2000 for submitting proposed Scheme and the list of assets. These pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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