TMI Blog2004 (7) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as the "Act" for acquiring some of the lands of the petitioner-company. On 26-11-1998 a notification under section 9, sub-sections 3 and 4 was issued by the Special Land Acquisition Officer (14), Pune hereinafter referred to as "SLAO". The petitioner-company pointed out to the SLAO that it is a sick industrial unit and the acquisition should not be proceeded with. Ultimately on 3-1-2000 notice under section 12(2) of the Act was forwarded to the petitioner with a copy of the Award made and its translation. When notice of delivery of possession was issued the present petition was filed challenging the entire proceedings for acquisition of lands taken up under the Act. 4. It is pertinent to note that the proceedings were commenced in the year 1998 and were completed in the year 2000 and throughout these two years though the petitioner had complete knowledge of the proceedings taken up under the Act no challenge of any kind was made before this Court or any other appropriate Court. From the facts noted in the petition it appears that no objection in writing was taken before LAO. However, a communication dated 8-12-1998 was written to the LAO pointed out the provisions of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted in respect of such companies and for enforcement of measures considered appropriate with utmost practicable despatch. The Act provides for identification of sickness in an industrial company on the basis of guidelines spelt out and provides remedial measures for financial assistance and restructuring to avoid sickness or cure sickness. It provides for establishment of the Board for Industrial and Financial Reconstruction as also the Appellate Authority consisting of expert Judges. The Bill received the assent of the President of India on 8-1-1986 and became the Sick Industrial Companies (Special Provisions) Act, 1985. 8. The Act therefore was legislated with the sole purpose of securing timely detection of sick and potentially sick companies owing industrial undertakings, the speedy determination by a Board of experts to undertake preventive, ameliorative, remedial and other measures in respect of such cases. Thus the object of Act was to take care of sick industries and take steps to remove the sickness. This being the object of the Act it is necessary to interpret all provisions contained therein in the light of these objects for the purposes of which the Act was estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial company] shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority." It provides that no legal proceedings or contracts shall be undertaken in respect of industry declared to be sick under the provisions of the Act except with the consent of the Board or as the case may be, the Appellate Authority. 10. The contention is that when section 6 notification was issued the petitioner was already declared as sick unit and therefore, proceedings for acquisition of land belonging to the petitioner cannot be commenced except with the prior consent of the Board, that admittedly is not done and therefore, the proceedings are liable to be quashed being void ab initio . We will have to consider therefore whether consent as contemplated by section 22 of SICA is necessary for proceedings under Land Acquisition Act which in turn may require us to consider whether proceedings for acquisition of land under the Act are legal proceedings as contemplated by section 22 of SICA. 11. Let us therefore consider as to what are the legal proceedings contemplated by section 22. Section as quoted above speaks of a sick comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case may be. 12. In our opinion, proceedings analogous to those enumerated above, but not specifically covered by provisions of section 22 also may not be taken up without previous consent of the Board. But it is only such proceedings which are connected with the financial existence and proprietary rights of the Company which are prohibited. Such proceedings directly deal with the existence of the Company itself and where restructuring or reconstruction or financing is pending contemplation. All these proceedings as contemplated by section 22 therefore must relate to the sickness of the Company and no proceedings of the kind mentioned above and similar proceedings be taken without consent of the Board so that activities undertaken by the Board under the provisions of SICA are not hampered by such proceedings. In our opinion, proceedings contemplated by section 22 are obviously legal proceedings. Proceedings taken up by any authorities which are judicial or quasi judicial . What is contemplated in section 22 is therefore no proceedings of the kind referred to above be taken up except with the previous sanction of the Board. There is no prohibition. All that is stipulated by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept in mind that all lands belonging to the petitioner-company were acquired for the petitioner-company as per provisions of part 7 of the Act. It was acquired for the purposes of running of the Company or conducting its business. All that land acquired for the petitioner after its establishment is not sought to be acquired for the purposes of road widening or any other purposes as stated in section 6 notification. Only part of it is being acquired. The acquisition has nothing to do with any of things relating to sick industry. Even if it is assumed that land belonging to the Company can be sold for the purposes of revenue or for reconstruction of the Company this acquisition cannot affect the profits of the Company in relation to its operation as a Company. There is therefore no question of proceedings under the Act in acquiring lands belonging to Company are proceedings as contemplated by section 22. There is therefore no question of prior consent of the Board being taken for that purpose. 16. Reliance was placed by the learned counsel for the petitioner on a judgment reported in the case of Maharashtra Tubes Ltd. v. State Industrial Investment Corpn. of Maharashtra Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ( iii ) an appeal under section 25, no proceedings for winding up of the concerned industrial company or for execution, distress or the like shall lie or be proceeded with in relation to the properties of that concern unless BIFR/appellate authority has consented thereto. The underlying idea is that every such action should be frozen unless expressly permitted by the specified authority until the investigation for the revival of the industrial undertaking is finally determined. It is thus crystal clear that the main thrust of this special legislation is at revival or rehabilitation of the sick industrial undertaking and it is only when it is realised that the same is not feasible that the option of winding up of the unit can be resorted to." (p. 153) It will be seen from the above that the main thrust of this special legislation (SICA) is revival or rehabilitation of sick industrial undertaking. The provisions of section 22 in our opinion, therefore, be interpreted or read in the light of this object of the Act. 17. The Supreme Court then proceeds to note certain judgments of the High Court and Supreme Court in this connection under the provisions of State Financial Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X
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