TMI Blog2010 (12) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... term loan to the then Industrial Credit and Investment Corporation of India Ltd., later known as ICICI Bank (for short 'ICICI'), for starting a manufacturing unit. The sanction was granted for the financial assistance with pari -passu charge in favour of the consortium of Banks including ICICI, IDBI and IFCI. The financial facilities amounting to ₹ 9,25,66,743/ - were granted inclusive of Rupee Term Loan and Foreign Currency Loan etc.. As per the agreements, the amount was payable in installments, the last of them being payable in 1998. The loan share of ICICI was 38.28% amounting to ₹ 3.55 Crores; IDBI's loan share was 34.45% amounting to ₹ 3.28 Crores and that of IFCI was 26.27% amounting to ₹ 2.43 Crores. The Company submitted an application for registration of the Company as a sick company with Board for Industrial and Financial Reconstruction (for short BIFR) constituted under the Sick Industries (Special Provisions) Act, 1985 (for short 'the SICA') on 28.10.1994. Such application was declined on 6.12.1994 for the reason that the 5 years have not elapsed from the commencement of the commercial production. On completion of five ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oan of ₹ 9.25 crores. The amount paid is inclusive of ₹ 11.01 crores after the BIFR determined that an amount of ₹ 11.78 crores is payable by the Company, to the original lenders i.e. the consortium of Banks. It was on 4.10.2001, BIFR closed the proceedings against the Company after returning a finding that the net worth of the Company has turned positive and the Company has ceased to be a sick industrial company. It recorded that the company has discharged its major financial obligations. However, the non -fulfilled obligations under the approved package would continue to remain in operation. ( 5. ) It is pleaded by ICICI in its petition for winding up of the Company that the BIFR has granted certain concessions and reliefs to the Company. But in spite of the reliefs and concessions, the Company has failed and neglected to pay outstanding dues of the Petitioner amounting to ₹ 3,29,92,998.08 as on 30.4.2004. The Petitioner is further entitled to interest from May, 2004 till the amount is liquidated. The statement of claims in respect of the five loan accounts were detailed in Annexure P.3. It is pleaded that the Petitioner has served a statutory notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 years and are working as Managers, Deputy Managers, Assistant Managers, Engineers, Supervisors, workmen and drivers. The Petitioner -creditor has filed reply to the said objections and sought the order of winding up after dismissal of the objections filed by the workmen as well as by the Company. ( 8. ) The record of the case has a written statement dated 27.7.2005, though there is no order permitting the said written statement to be taken on record nor there is any indication that on which date such written statement was filed. But along with the said written statement, the Company has appended its 14th, 15th and 16th Annual Reports for the years 2001 -02, 2002 -03, 2003 -04. In the Balance Sheets for the year ending on 31.3.2002 (14th Annual Report Annexure R.3), the secured loan as per Schedule -C, is said to be ₹ 9,22,00,300/ -. Such was the position as on 31.3.2001 as well. In the Balance Sheet for the year ending 31.3.2003 (15th Annual Report Annexure R.4), the secured loan as per Schedule -C is stated to be ₹ 8,72,00,000/ -. The 16th Annual Report, Annexure R.5 is for the year ending 31.3.2004, the secured loan as per Schedule -C of such report is ₹ 8, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 13 of the SARFAESI Act, without waiting for adjudication of liability of the Company in OA No. 57 of 2008 filed by it before the Debt Recovery Tribunal (for short 'the DRT'). The Company disputed its liability so as to permit, the Alchemist to invoke the provisions of SARFAESI Act. ( 10. ) An appeal bearing Company Appeal No. 41 of 2009 filed by the Alchemist aggrieved against the order passed on 21st August, 2009 was dismissed by the Division Bench on 16.2.2010. In the Special Leave to Appeal, the matter was remitted to the Company Court for deciding the said claim of the Company as per the directions contained therein. However, on 28.7.2010, the Company withdrew its aforementioned application with liberty to continue with the writ petition against the action initiated by the Alchemist under the SARFAESI Act. M/s Alchemist filed an affidavit, which was assigned CA No. 530 of 2009, wherein it opted out of the winding up proceedings and intended to realize its security outside winding up instead of relinquishing its security and proving its debt. The Company in its reply to the CA No. 530 of 2009 dated 14.10.2009 stated in para (C): C. It is not in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted an application in March, 2006 for One Time Settlement (OTS) under the One Time Settlement (OTS) scheme of RBI vide its circular dated 3.8.2005 titled as Guidelines on One Time Settlement Scheme for SME Accounts read with RBI's circular dated 22.11.2005 (vide which the RBI made the said Guidelines dated 3.9.2005 applicable to Financial Institutions also). The OTS application was submitted by the Company to IDBI on 8.3.2006 and to IFCI on 9.3.2006, well before the deadline of31.3.2006 (with ICICI Ltd., the Company took up the matter separately in Winding -Up proceedings in Punjab Haryana High Court). As per the language of the said OTS guidelines and as per the mandate of Section 21 35A of the Banking Regulation Act and as per the judgments of the Courts, the said OTS guidelines are mandatory and are binding up n the Banks and Financial Institutions. The IDBI replied vide their letter dated 21.4.2006, classifying the Company's loan account as doubtful NPA in its books of accounts as on 1.4.1993 and demanding ₹ 396 lakhs as full and final payment of their dues. The IFCI replied vide letter dated 23.3.2006, classifying the Company's account as doubtful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y offered to deposit the said amount in the Court. However, the Court came to a decision that the matter between the same parties is already pending in the Debts Recovery Tribunal (DRT), Delhi and that the Company can agitate all these points and its claims, if any, in the pending proceedings in the DRT, Delhi. With these observations, the suit was disposed off on 17.5.2008. It came to light during Inter -Pleader suit proceedings that the KMBL had filed Recovery Suit in the DRT, Delhi on 23.1.2007 for recovery of ₹ 4,72,06,961/ -, but the same was not intimated to the Company prior to filing of inter -pleader suit. The said DRT suit is still pending. Vide letter dated 24.2.2007, the IDBI issued default notice and demanded a sum of ₹ 7,80,26,765/ -. Same was protested by the Company by its legal counsel's communication dated 5.4.2007. In the meanwhile, vide letters dated 14.5.2007 and 4.6.2007, the IFCI recalled their loan and invoked the personal guarantee for a sum of ₹ 84,49,38,818/ -. Same was protested by the Company on 18.6.2007. Vide letter dated 20.3.2008, the IFCI assigned the debt to Dhir Dhir Asset Reconstruction Securitization Company Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount. The amount of principal and the interest claimed therein is in terms of the loan agreement executed by the Company with the said financial institution. The Schedule -E gives the statement of dues as on 15.11.2008 due to IDBI. Such outstanding amount is as per terms of the one time settlement. Annexure P.24 is the reply submitted by the Company to the show cause notice, whereas Annexure R.9 dated 12.1.2009 and 6.2.2009 are the reasons communicated to the Company in terms of Section 13(3A) of the SARFAESI Act. ( 13. ) It is inter -alia, pleaded that 250 workers and staff are employed in its Rewari Factory and the company is one of the major suppliers of automotive springs to the leading automobile manufacturers of India including Maruti Suzuki India Ltd. It is pleaded that the Banking Regulations Act, 1949 empowers the RBI to determine the policy and lay down guidelines to be followed by the Banking Companies. The directions issued by the RBI have statutory force. SARFAESI Act, also gives powers to the RBI and no Company can carry its business of securitization and assets without obtaining a licence from the RBI. It is pleaded by the Petitioner -Company that the loan amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009)8 SCC 257. The Company sought to enter into One Time Settlement in terms of the said circular vide communication dated 9.3.2006 addressed to IFCI. Similar letters were written to IDBI on 8.3.2006. It was mentioned that ICICI has filed a petition for winding up therefore, there was no point in pursuing further with ICICI. IFCI sought a sum of ₹ 465.66 lacs as per the RBI One Time Settlement guidelines vide communication dated 22.3.2006, whereas the IDBI demanded a sum of ₹ 396 lacs vide letter dated 21.4.2006. The Company disputed the amount claimed by IFCI and asserted the sum to be ₹ 52,15,677/ - is due to the ICICI and ₹ 31,88,033/ - to IDBI, after considering the master circular of RBI on Prudential Norms in Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 17, 2004. ( 15. ) The stand of the Company is that the Company's loan account ought to have been categorized as Non Performance Assets (for short 'NPA') prior to 1.4.1993. The Company has also pointed out that on 19.6.2006 in the joint meeting of the Company with the Officers of the IFCI, IDBI and Kotak Mahindra Bank, the financial institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 311.20 Lacs, ICICI ₹ 443 lacs and IDBI -Rs.423.40 Lacs). The lender agreed to waive ₹ 23.87 crore subject to the Company adhering to the terms of settlement in quarterly installments within a period of three years i.e. by 31.3.2002 along with interest @ 15%. In case of default, the lenders were to charge interest @ 2.1% over the maximum lending rate of the lenders prevailing at the time of default. Since the Company failed to make payments in accordance with the settlement arrangement, IFCI revoked the arrangement vide letter dated 28.2.2003 and restored all the terms and conditions of the original loan agreement. It is pointed out that as per the settlement arrangement before BIFR, the Company's liability towards IFCI is ₹ 15.16 crores and towards IDBI is ₹ 20.18 crores aggregating ₹ 35.34 crores as on 30.6.2010. It is pointed out that RBI's guidelines for One Time Settlement are not applicable to the Company as such guidelines were applicable only to Small Medium Enterprises (SME), whereas as per the Balance Sheet of the Company for the year 2004 -05, the investment in the plant and machinery of the Company was more than ₹ 16 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per RBI Guidelines). Dismissed on 17.5.2008 3. CWP No. 4719/2007 filed before Punjab and Haryana High Court Writ Petition seeking direction to the lenders to settle the dues as per RBI circulars Dismissed as withdrawn on 29.9.2007 4. CWP No. 4732/2007 filed before the Punjab and Haryana High Court Writ Petition seeking direction to the lenders to settle the dues as per RBI circulars Withdrawn on 28.7.2010 5. CA No. 526/2008 filed before Punjab Haryana High Court Company Application filed in Company Petition No. 129/2004 restraining respondent No. 2 from taking over possession of assets the Company. Dismissed on 3.12.2009 6. MA No. 262/2009 filed by Guarantor (Coventry Springs Engineering Co. Ltd.) of the Company before BIFR. Application filed by the Guarantor seeking direction to the lenders of the Company to adjudicate on the unfulfilled obligations of secured creditors of the Company Dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operating agency by the BIFR. It is also pleaded that BIFR loses its jurisdiction over the case, once it has passed an order of deregistering the Company from the purview of SICA. Therefore, the question of taking any prior permission of BIFR before revoking the settlement arrangement does not arise. It is further pleaded that the Company was making the payment to ICICI and IDBI even as early as 1993 and the payments made to the ICICI were in higher ratio as compared to IFCI and IDBI. ( 18. ) It is admitted fact that two secured creditors i.e. IDBI and IFCI have initiated proceedings for recovery of debt in terms of Section 19 of the Recovery of Debts to Banks and the Financial Institutions Act, 1993 (for short the DRT Act) by filing an appropriate application before the DRT, Delhi. The ICICI has initiated proceedings for winding up of the Company (CP No. 129 of 2004) before this Court, whereas the assignees of secured creditors i.e. IFCI and IDBI have initiated proceedings under SARFAESI Act which is subject matter of challenge in CWP No. 12067 of 2010. The ICICI has also initiated proceedings for winding up of the promoter Company of the Respondent Company and also filed a ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther contended that Kotak Mahindra is not the assignee of the debt, in as much as, the appropriate stamp duty on the deed of assignment has not been affixed. It is also argued that the other secured creditors i.e. IDBI and IFCI have assigned their debts to the Alchemist but the deed of assignment is not properly stamped. It is also argued that though the debt has been assigned for a sum of ₹ 3.04 crores in March, 2008 by IFCI and for ₹ 4.1 crores in August, 2008 by IDBI i.e. total ₹ 7.14 crores, the amount claimed is ₹ 133 crores in respect of the loan availed from IFCI. It is, thus, alleged that debt assigned for ₹ 3.04 crores cannot become ₹ 133 crores. It shows that the claim of the secured creditor is not tenable and is highly inflated, unjust and unreasonable. 30 -A. Shri Setia has further argued that it is not just and equitable to wind up the Company for the reason that it is a running Company employing 250 persons and has contributed ₹ 23.18 crores as wages during the last 10 years; paid about ₹ 40 crores as taxes to the State and has the production worth of ₹ 48.40 crores. Therefore, relying upon a judgment reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermitted to be raised again before the Company Judge. It is contended that the Company has also filed an application to recall of the order of admission, which has been dismissed vide order dated 29.5.2009. The Company Appeal No. 33 of 2009 against the said order was also dismissed. It is argued that the Company had the opportunity to raise a defence that the amount claimed in the petition for winding up is frivolous or lacks bona -fide before the petition is admitted. But in view of the admission notice and the decision of application for recall of the admission order, the Company cannot be permitted to raise the issue regarding bona -fide dispute of debt again. It is contended that after publication is effected, it is open to the Company to show to the Company Court that the winding up order should not be passed, because it is not in the interest of the Company for one or the other reason, but not for the reason that the debt is disputed. ( 23. ) As mentioned above, the Company has not responded to the pre -admission notice. The Company failed to file its written statement within time granted, which led to passing of an order of admission. Such order of admission was challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is intention signed by him or his advocate with his name and address, so as to reach the Petitioner or his advocate not later than 5 days before the date fixed for the hearing of the petition, and appear at the hearing for the purpose in person or by his advocate. A copy of the petition will be furnished by the undersigned to any creditor or contributory on payment of the prescribed charges for the same. Learned Counsel for the parties could not refer to any precedent as to whether the Company can be permitted to raise dispute in respect of bona -fide claim of the creditor after the dismissal of the Company Appeal challenging the order of admission. In my view, it is not open to the Company at this stage to assert that the claim of the creditors is mala -fide, vexatious and is not bona -fide keeping in view the judicial propriety and the principle that there should not be multiple proceedings in respect of the same question. Though it is open to the Company to resist the order of winding up on other grounds such as that it will not be fair to wind up the Company for the reason that it is a running concern or that the interest of the workmen is involved, but the plea that the deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company in question, which led to enactment of the stringent provisions for the recovery of the debt from the defaulters such as DRT and the SARFAESI Acts. ( 27. ) Hon'ble Supreme Court in Mardia Chemicals Ltd. v. Union of India : (2004) 4 SCC 311, held that the banks and the financial institutions have heavily financed the industries. It is also a fact that a large sum of amount remains unrecovered. Normal process of recovery of debts through courts is lengthy and time taken is not suited for recovery of such dues. For financial assistance rendered to the industries by the financial institutions, financial liquidity is essential failing which there is a blockade of large sums of amounts creating circumstances which retard the economic progress followed by a large number of other consequential ill effects. Liquidity of finances and flow of money is essential for any healthy and growth -oriented economy. ( 28. ) In Transcore v. Union of India : (2008) 1 SCC 125, Supreme Court said that the SARFAESI Act enables the banks and Financial Institutes to realize long -term assets, manage problems of liquidity, asset -liability mismatch and to improve recovery of debts by exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nference that the entire amount due towards the ICICI stands discharged. ( 30. ) In fact, filing of CA No. 732 of 2006 is another attempt to divert the attention of the Court to the non -issues. Even the annual reports submitted by the Company show the amount due and payable. Therefore, to seek a counter from the Bank is only delaying tactics successfully used by the company for the last many years. It is the stand of the Company that it is not liable to pay anything over and above an amount of ₹ 2,62,162/ - The company in its Balance Sheets year after year is reflecting the amount due to the Financial Institutions. The amount due in the Balance Sheets is sought to be explained by inserting a Note, which is based upon wholly untenable and false pretexts. The note contains arguments as are raised in present proceedings. Thus, the stand of the Company is of an unreliable, untrustworthy and a dishonest borrower. Therefore, the said application does not warrant any other consideration. In fact, the Division Bench has also considered an argument based on such application pending before the Company Court. It was held to the following effect: 6. The argument of Mr. R.C. Setia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he banks. Such guidelines of RBI are not to eliminate NP As but to restructure. The Section 21 of the Banking Regulation Act, 1949 empowers RBI in the interest of the Banking Policy to lay down guidelines in relation to advances to be followed by banking companies. These guidelines have been issued as a restructuring measure in order to avoid setbacks in the banking system.NP As do not generate interest. 85% of the Indian Banks' income comes from interest. Thus, NP As adversely impact profits of the banks and hence, as a matter of Banking Policy, RBI as Regulator seeks through its guidelines under Section 21 read with Section 35A to manage these NP As and not to eliminate. The said guidelines deal with restructuring of the banking system which is one of the objects behind giving authority to RBI to frame banking policy . Therefore, the assignment of NPS is permissible and legal. ( 32. ) The argument that the amount of debt is not determined as the financial institutions have instituted the proceedings for determining the amount of debt by invoking the jurisdiction of DRT, is again misconceived. After the commencement of the DRT Act, the financial institutions have no opti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court has to draw a balance between the interests of the workmen and the public interest. Though the Company is said to be employing 250 persons, but only 48 employees have filed an application opposing the winding up. All these applicants are not workmen but also include the persons engaged for managerial and supervisory work. Out of the said these 48 employees, 7 have filed CA No. 698 of 2010 asserting that they are interested in running of the Company. Such CA was dismissed on 19.11.2010 inter -alia for the reason that the application is absolutely vague and without any provision to meet out the financial obligations. Therefore, it is the management of the Company, which has failed to maintain the financial discipline and to maintain payment schedule of the financial institutions. Thus the act of the failure to pay public money should not be treated to be a bona -fide dispute or that the winding up of the Company would not be just and equitable. The workers cannot provide shield to the Company against winding up in these circumstances. Such defence cannot be accepted. In Arihant's case, the interest of the large number of workmen numbering 1456 was kept in view. But in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in civil court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the Act in the present case. xxx xxx 80. Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13(4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach the Debts Recovery Tribunal. The above noted provisions are for the purpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows: 1. Under Sub -section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under Sub -section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complementary to each other. There is no inherent or implied inconsistency between these two remedies under the two different Acts. 34. In our view, Section 17(4) shows that the secured creditor is free to take recourse to any of the measures under Section 13(4) notwithstanding anything contained in any other law for the time being in force e.g. for the sake of argument, if in the given case the measures undertaken by the secured creditor under Section 13(4) come in conflict with, let us say the provision under the State land revenue law, then notwithstanding such conflict, the provision of Section 13(4) shall override the local law. This position also stands clarified by Section 35 of the NPA Act which states that the provisions of the NPA Act shall override all other laws which are inconsistent with the NPA Act. Section 35 is also important from another angle. As stated above, the NPA Act is not inherently or impliedly inconsistent with the DRT Act in terms of remedies for enforcement of securities. Section 35 gives an overriding effect to the NPA Act with all other laws if such other laws are inconsistent with the NPA Act. As far as the present case is concerned, the remedie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dues in exercise of One Time Settlement guidelines of RBI. Such writ petition was filed on 9.11.2009. The writ petition was withdrawn on 27.11.2009 i.e. on the first date of hearing itself when the Petitioner sought liberty to approach the DRT. The Company has not challenged the proceedings either under Section 13(2) or 13(4) of the SARFAESI Act, in the said writ petition, though the Company could raise all the pleas which are now raised in the present writ petition. By not raising pleas in the aforesaid writ petition, the Company is estopped to challenge the same in the present writ petition on the analogy of the provisions of Order 23 Rule 1 read with Order 2 Rule 2 of the Code of Civil Procedure. A suitor cannot be permitted to split the cause of actions to seek relief in respect of part of cause of action leading to multiplicity of the proceedings. Since the Company has the opportunity to include all the cause of actions in the aforesaid writ petition but failed to do so, therefore, the present writ petition is an abuse of process of law. ( 37. ) The argument that the secured creditors i.e. IFCI and IDBI have assigned their debts to the Alchemist in the sum of ₹ 7.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower, which has been classified by a bank or financial institution as sub -standard, doubtful or loss asset, - (a) in case such bank of financial institution is administered or regulated by any authority or body established, constituted or appointed by any law for the time being in force, in accordance with the directions or guidelines relating to assets classifications issued by such authority or body; (b) in any other case, in accordance with the directions or guidelines relating to assets classifications issued by the Reserve Bank; Since the financial institutions in the present case are governed by the classifications issued by the RBI, therefore, the said circular is indeed applicable to the financial institutions such as the Banks in the present case. In terms of the said circular, the Non Performing Asset has been defined as under: 2.1 Non -performing assets 2.1.1 An asset, including a leased asset, becomes nonperforming when it ceases to generate income for the bank. A 'non -performing asset' (NPA) was defined as a credit facility in respect of which the interest and/ or instalment of principal has remained 'past due' for a specified period of time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be treated as NPA, if the instalment of principal or interest thereon remains overdue for two crop seasons. With effect from September 30, 2004, a loan granted for long duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for one crop season. 2.1.5 As a facilitating measure for smooth transition to 90 days norm, banks have been advised to move over to charging of interest at monthly rests, by April 1, 2002. However, the date of classification of an advance as NPA should not be changed on account of charging of interest at monthly rests. Banks should, therefore, continue to classify an account as NPA only if the interest charged during any quarter is not serviced fully within 180 days from the end of the quarter with effect from April 1, 2002 and 90 days from the end of the quarter with effect from March 31, 2004. 2.2 'Out of Order' status An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover all NP As in SME sector which have become doubtful or loss as on March 31, 2004 with outstanding balance of ₹ 10 crore and below on the date on which the account was classified as doubtful. b) The guidelines will also cover NP As classified as sub -standard as on 31st March, 2004, which have subsequently become doubtful or loss where the outstanding balance was ₹ 10 crore and below on the date on which the account was classified as doubtful. The Government of India has enacted The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 on June 16, 2006 which was notified on October 2, 2006. The MSMED Act, 2006 has modified the definition of micro, small and medium enterprises engaged in manufacturing or production and providing or rendering of services. As per the said Act, A small enterprise is an enterprise where the investment in plant and machinery is more than ₹ 25 lacs but does not exceed ₹ 5 crore; and a medium enterprise is an enterprise where the investment in plant and machinery is more than ₹ 5 crore but does not exceed ₹ 10 crore. In fact, such was the conditions even prior to the enactment of the said Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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