M. Jagannadha Rao, C.J. - (1.) In this writ petition, the petitioners have questioned the order of the Appellate Authority for Industrial and Financial Reconstruction, dated 22.10.1996 and sought a further direction against the Board for Industrial and Financial Reconstruction (hereafter called AAIFR and BIFR respectively) to proceed with the reference made by the 2nd petitioner company. The BIFR is impleaded as 1st respondent and the AAIFR as the 2nd respondent.
(2.) The 2nd petitioner company had earlier made a reference to the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985, and the same was rejected on the ground that the company did not employ 50 workers or more. On 2.11.94, the Industrial Credit and Investment Corporation of India Ltd. (hereafter called ICICI) (6th respondent) recalled the public loan granted to the company and followed it up by a suit in Bombay on 13.2.1995 -for Rs. 3.25 crores plus interest. On 18.12.95, the petitioner wrote to ICICI undertaking to pay the balance amount due, if the ICICI was prepared to forego Rs. 1.44 crores. Balance was around Rs. 3.50 crores. The ICICI gave the concession and there was a consent decree on 2.12.1995 for around Rs. 3.50 crores.
(3.) Having obtained the benefit of waiver of Rs. 1.44 crores from the ICICI, the 2nd petitioner company conducted an annual general meeting on 21.5.96, for approval of its accounts for 9 months for the financial year 1.4.95 to 31.12.95 but suddenly, changed its accounting year from 1.1.96. The result was that the previous accounting year got reduced to 9 months, from 1.4.1995 to 31.12.1996. The company claimed that in May, 1995, it had, - notwithstanding its sickness, increased its workmen beyond 50 (upto 52) and on the basis of change in the accounting year and alleged increase in the number of workers, made a fresh reference to BIFR under section 15 of the Act on 29.5.96.;