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TMI Blog2010 (2) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... eby the BIFR rejected the prayer of the appellant for discharge of the company from the purview of SICA on the ground that the discharge of the company, which has not demonstrated any sign of revival of its industrial activity, simply on the grounds that its net worth has turned positive through OTS would make a mockery of the objectives for which SICA was enacted. 2. Briefly stated, the appellant company, Siris Limited is a Public Limited, company is engaged in the manufacture of bulk drugs and intermediates. The appellant company started its commercial production in the year 1968 and was mainly into the manufacture of anti-bacterial drugs and intermediates like Sulphamethoxazole Ciprofloxacin, Analgin, etc. Since 1992, the appellant comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y auditor to that effect and filed an application on 24.12.2008 seeking discharge from the purview of SICA. The company filed another application dated 11.8.2009 before the BIFR seeking discharge from the purview of SICA in view of the net worth of the company becoming positive. However, in the impugned order, the BIFR dismissed the said application on the ground that without the revival of the company, discharge would be contrary to the provisions of SICA. Against this order, the appellant has filed this appeal. 3. In the appeal, notices were issued to the respondents. In response to the notice, ESIC, New Delhi has filed its submissions and submitted that the appellant is having statutory dues of Rs. 19,590 with interest which is payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. We have heard learned counsels for the parties and perused the material on record. The moot question is whether the BIFR and AAIFR will retain any jurisdiction even after the net worth of the company has turned positive or their jurisdiction ceases when the company ceases to be a sick industrial company as a result of its net worth turning positive. This issue came up before the hon'ble Calcutta High Court in the case of Zuari Agro Chemicals Ltd. v. Industrial Credit and Investment Corporation of India (No. 362 of 1995). The Hon'ble Calcutta High Court in the aforesaid case held as follows: "... There is absolutely no doubt in my mind that once a company ceases to be a sick industrial company as defined by the Act all pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the audited Balance Sheet of the petitioner company showing positive net worth and other circumstances and when the net worth becomes positive BIFR ceases to have any jurisdiction. The petitioner company has thru ceased to be a Sick Industrial Company within the meaning of clause (o) of subsection (1) of section 3 of Sick Industrial Companies (Special Provisions) Act, 1985 and BIFR ceases to have jurisdiction over case being Case No. 14/1998," 7. The BIFR while citing the above case held that the hon'ble High Court did not discharge the company from the purview of SICA simply on the ground that though its net worth has turned positive the units have not been revived. The BIFR appears to have committed a mistake in unders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the Hon'ble Delhi High Court in the case of RPG Cables Ltd. v. Windsor Realities (P) Limited held a similar view by holding that since the net worth of the petitioner has become positive as per the ABS for the financial year 2008-09, the petitioner shall not be treated as a sick company and all proceedings under SICA abate. The Hon'ble High Court of Mumbai in the case of SBI v. Alstom Power Boilers Ltd., supra held that after the net worth of a company becomes positive, the company ceases to be a sick company within the meaning of Section 3(1)(o) of SICA and the BIFR cannot retain jurisdiction over the company and protection to tile company under section 22(1) of SICA would not continue till every obligation undertaken by the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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