TMI Blog2013 (9) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... overy - If such consent was not secured and the recovery was deferred, the creditors’ remedy was protected for the period of deferment was, by reason of sub-section (5) of section 22, excluded in the computation of the period of limitation - The words ‘any other law’ in section 22 cannot, therefore, be read in the manner suggested by learned counsel for the respondents - The apex court specifically referred to the provisions of clause 13(b)(3) of the scheme and in paragraph 23 of the judgment, it was again reiterated that there being no express wavier of interest, the statutory provision must prevail. Tata Davy Ltd. v. State of Orissa [1997 (8) TMI 78 - SUPREME COURT OF INDIA ] - The rehabilitation scheme framed by the BIFR, the petitioner was not liable for payment of interest and penalty - Section 22 of the Act clearly provides that once proceedings have been initiated under the Act and an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation then, notwithstanding anything contained in any other law for the time being in force no proceeding for the winding up or execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-company, and Sri S. P. Kesarwani, learned counsel for the respondent-Department. Sri Upadhayay also stated that reply to the second supplementary counter affidavit is not required. 5. It has been contended by learned counsel appearing for the petitioner that the company had stopped its manufacturing activities with effect from May 15, 1989. It was registered as a sick company in July, 1990 under the provisions of the Act. It was further submitted that section 18 of the said Act provides for framing a scheme in order to secure the rehabilitation of a sick company. Such rehabilitation scheme is prepared after due inquiry into working of the sick industrial company as provided in sections 16 and 17 of the Act. It was further submitted that in the case of the petitioner-company also after completing the procedure of enquiry contemplated under sections 16 and 17 of the Act, a rehabilitation scheme was drawn up by the Board for Industrial and Financial Reconstruction (hereinafter referred to as "the BIFR"). Sri Upadhayay, learned senior counsel has drawn our attention to the provisions of sub-clause (d) of clause 8.04 of the scheme which has been filed as annexure 2 to the writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R on November 12, 2002. However, the petitioner-company made payment of a sum of Rs. 6,89,000 as part payment being 50 per cent. of the payment of the original demand as per their undertaking vide letter dated January 31, 2005 and for the remaining 50 per cent. it was submitted by the company that the same would be paid in the year 2005-06. The grievance of the petitioner is that in spite of its undertaking given in its letter dated January 31, 2005, a notice dated May 11, 2005, was issued by the Assistant Commissioner, Central Excise, Division III, Kanpur, calling upon it to deposit the outstanding remaining dues amounting to Rs. 6,89,000 along with interest within seven days on receipt of the letter otherwise the same will be recovered by the attachment and sale of the property. 9. Learned counsel for the petitioner further submitted that the Act being a Central Act, the same, being later in point of time and being a Special Act would prevail and have overriding effect over the Excise Act and, therefore, the petitioner was entitled to the benefit of the provisions of section 22 read with section 32 of the Act and no coercive action could be taken by the respondents against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to be taken with respect to such companies and the expeditious enforcement of the measures so determined and for matters connected therewith or incidental thereto." 14. From a reading of the preamble, it will be clear that the Act was enacted as beneficial legislation specifically to assist the sick industrial undertakings/companies for their rehabilitation. 15. Section 4 of the Act provides for the establishment of a Board known as the Board and Appellate Authority for Industrial and Financial Reconstruction, which reads as under : "4. Establishment of Board. (1) With effect from such date as the Central Government may, by notification, appoint, there shall be established a Board to be known as the Board for Industrial and Financial Reconstruction to exercise the jurisdiction and powers and discharge the functions and duties conferred or imposed on the Board by or under this Act. (2) The Board shall consist of a Chairman and not less than two and not more than fourteen other Members, to be appointed by the Central Government. (3) The Chairman and other Members of the Board shall be persons who are or have been or are qualified to be High Court Judges, or persons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time." 20. Section 18 of the Act provides : "18. Preparation and sanction of schemes. (1) Where an order is made under sub-section (3) of section 17 in relation to any sick industrial company, the operating agency specified in the order shall prepare, as expeditiously as possible and ordinarily within a period of ninety days from the date of such order, a scheme with respect to such company providing for any one or more of the following measures, namely : (a)the financial reconstruction of the sick industrial company ; (b)the proper management of the sick industrial company by change in or take over of, the management of the sick industrial company ; (c)the amalgamation of (i)the sick industrial company with any other company, or (ii)any other company with the sick industrial company ; (hereafter in this section, in the case of sub-clause (i), the other company, and in the case of sub-clause (ii), the sick industrial company, referred to as transferee company ) ; (d)the sale or lease of a part or whole of any industrial undertaking of the sick industrial company ; (da)the rationalisation of managerial personnel, supervisory staff and workmen in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the memorandum or articles of association of an industrial company or in any other instrument having effect by virtue of any law other than this Act." 24. From a reading of the various provisions of the Act referred to hereinabove, it will be seen that there is no dispute so far as the framing of the rehabilitation scheme is concerned, vide order dated November 12, 2002. A reference was made as provided under section 15 of the Act and after due inquiry as contemplated under sections 16 and 17 of the Act, the rehabilitation scheme was framed. 25. In the said scheme clause 8.04 was consciously inserted. Sub-clause (d) of clause 8.04 in clear and categorical terms provided for exemption to the company from payment of interest, penalty, etc., with a further condition that the Excise Department would accept payment of excise duty finally payable in pending cases over a period of two years from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicability of section 32 of the Act. 30. The provisions of the Act came up for consideration before the apex court reported in Tata Davy Ltd. v. State of Orissa [1997] 14 SCL 81. This was a case in respect of recovery of arrears of sales tax under the Orissa Sales Tax Act, 1947 and the apex court interpreting the provisions of section 22 of the Act held as follows (page 5 of 93 Comp Cas) : "The Central Act is enacted under entry 52 of List I of the Seventh Schedule. The said entry 52 empowers Parliament to legislate in respect of industries the control of which by the Union is declared by Parliament by law to be in the public interest . The Central Act declares that it is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of article 39 of the Constitution , namely, that the ownership and control of the material resources of the community are so distributed as best to serve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment . The Central Act does not impair or interfere with the rights of the States to leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme in so far as they are concerned. It is now-settled law as laid down by the Supreme Court in Grindlays Bank Ltd. v. Central Government Industrial Tribunal Manu/SC/0308/1980 ; AIR 1981 SC 606, that the power of procedural review is inherent in a court and or quasi-judicial body which includes the power to set aside an ex parte order, i.e., an order passed without notice to the aggrieved person. If therefore, the respondents are still aggrieved by that part of the order and it is open to them that they can still move the BIFR for whatever reliefs they may be entitled to in law. The Tribunal will note the finding in the scheme that the respondents were present." 34. On behalf of the respondents a reference was made to the reported judgment of the apex court Voltas Ltd. v. State of Andhra Pradesh [2004] 121 Comp Cas 267 in respect of their contention that the statutory liability for payment of penalty and interest and other dues could not be waived under the scheme framed by the BIFR. Negativing the contention of the Department the apex court held that (page 274 of 121 Comp Cas) : "If a statutory liability has to be waived then there must be an express waiver of the same. The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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