Decided on August 12,2005

Bhilai Cement Company Pvt Ltd Appellant


L.C.BHADOO, J. - (1.) THE petitioner has preferred this writ petition under Article 226/227 of the Constitution of India with a prayer to issue a writ in the nature of mandamus commanding respondents No. 1 and 2 to settle the bank account of the petitioner like extending necessary rehabilitation exemption/concession as per the guidelines issued by the RBI from time to time, further to restrain the respondents from proceeding with recovery proceedings till the matter is finally settled as per the guidelines issued by the RBI, and any other suitable relief deemed fit in the facts and circumstances of the case.
(2.) AT the outset. Shri Manindra Shrivastava, learned Senior Counsel for the petitioner, submitted that he is pressing this writ petition only to the extent that respondents No.1 and 2 be directed to consider the case of the petitioner company for rehabilitation after examining the potential viability of the petitioner company and thereafter to act according to rehabilitation package. Brief facts, as set out in the petition, necessary for the disposal of this writ petition are that the petitioner company was incorporated with the object of establishing a mini cement plant at Borai Industrial Growth Centre, Durg and in furtherance of its aims and objects the petitioner company availed loans and financial assistance from the M.P. State Industrial Development Corporation as also working capital limits from respondent No.2 for the businesses of its mini cement manufacturing plant. Due to the then adverse business conditions, ever changing economic policies, inadequate supply of essential resources like raw material, power supply etc. and further due to inadequate and delayed financial assistance, the mini cement plant could not be fully set up which led to under-utilization of plants and machineries, as a result of the aforesaid facts, the petitioner company could not perform well right from the inception and ultimately became a 'Sick SSI Industrial unit' due to erosion in its peak network to the extent of 250% of the net worth as a result of ever growing accumulated cash losses.
(3.) THE respondent bank sanctioned the working capital financial assistance for a sum of Rs.45 lakhs w.e.f. 3-12-98. However, the same did not release the sanctioned credit facilities in time, rather was busy in appropriating the debts in liquidating the other accounts of the group in an arbitrary manner. The respondent bank in complete ignorance of the Reserve Bank of India guidelines was not only indulged in charging excessive interest then that of the agreed rates but was further busy in charging the Penal interest and capitalizing the same against the banking practice and the directions of R.B.I. issued in this regard. On account of this the petitioner company becomes a Sick Industrial Unit. Consequently, the matter was referred to the District Level Sick Industrial Unit Rehabilitation Committee (for short D.L.R.C.) for suggesting the means and measures for rehabilitation of the petitioner company. The matter was considered by the D.L.R.C. in its meeting dated 28-4-99 wherein the representative of respondents No.1 and 2 was also present. In the said meeting after due examination of the then prevailing Reserve Bank of India circulars, guidelines as also the parameters issued by the directorate of industries from time to time, the Committee recommended for declaring the petitioner a sick industrial unit.;

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