TMI Blog2017 (5) TMI 1545X X X X Extracts X X X X X X X X Extracts X X X X ..... 29-5- 2002, whereas the interest liability is prior to that, the petitioners having failed to demonstrate that it has included in the sanctioned scheme (if any) by the BIFR, are not entitled for the protection of Section 22 (1) of the SIC Act. Since the amount in dispute i.e. the interest liability has not been demonstrated to be covered under any scheme sanctioned by the BIFR in favour of the petitioners and that amount has been included in such scheme; merely on account of registration / declaration of the petitioners industry as sick industry with the BIFR, it cannot be held that the petitioners are not liable to pay interest amount. Petition dismissed - decided against petitioner. - Writ Petition (T) No.51 of 2017, Writ Petition (T) No.52 of 2017, Writ Petition (T) No.54 of 2017 - - - Dated:- 19-5-2017 - Shri Sanjay K. Agrawal, J. For Petitioners: Mr. Kishore Bhaduri and Mr. Chandresh Shrivastava, Advocates. For State/Respondent: Mr. Bhaskar Payashi, Panel Lawyer. ORDER Since common question of law and fact is involved in these writ petitions, they are heard together and are being disposed of by this common order. 2. The assessing authority by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 26 (4) (a) of the Act of 1994 under the provisions of the BIFR. 8. Section 22 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985 provides as under: - 22. Suspension of legal proceedings, contracts, etc. -(1) Where in respect of an industrial company, 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 or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at way various preventive or remedial measures should be afforded to a sick industrial company. In that behalf, BIFR is enabled to frame an appropriate scheme. To enable the BIFR to do so, certain preliminaries are required to be followed. It starts with the reference to be made by the Board of Directors of the sick company. The BIFR is directed to make appropriate inquiry as provided in Sections 16 and 17 of the Act. At the conclusion of the inquiry, after notice and opportunity afforded to various persons including the creditors, the BIFR is to prepare a scheme which shall come into force on such date as it may specify in that behalf. It is in implementation of the scheme wherein various preventive, remedial or other measures are designed for the sick industrial company, steps by way of giving financial assistance etc. by Government, banks or other institutions, are contemplated. In other words, the scheme is implemented or given effect to, by affording financial assistance by way of loans, advances or guarantees or reliefs or concessions or sacrifices by Government, banks, public financial institutions and other authorities. In order to see that the Scheme is successfully implem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Special Provisions) Act, 1985 (for short, 'the SIC Act') would be applicable to the entirety of the period beginning from the inquiry under Section 16 till the implementation of sanctioned scheme for rival or until BIFR adjudges that net worth of company has otherwise become positive. During the entirety of that period SICA grants protection to the company and leaves it to the discretion of BIFR whether to permit filing and maintaining of suit or other proceedings. 13. The Supreme Court, further, in the matter of Jay Engineering Works Ltd. v. Industry Facilitation Council and another ( (2006) 8 SCC 677 ) has held that once the awarded amount has been included in the scheme approved by the Board, Section 22 of the SIC Act would apply and observed as under in paragraphs 17, 18 and 19: 17. The said provision, thus, mandates that no proceeding inter alia for execution, distress or the like against any of the properties of the industrial company and no suit for recovery of money or for the enforcement of any security, shall lie or be proceeded with further, except with the consent of the Board or as the case may be, the Appellate Authority. The said statutory injunction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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