Sunil Ambwani - (1.) -This writ petition has been filed against the orders dated 8.2.2002 passed by Board for Industrial and Financial Reconstruction (in short 'B.I.F.R.') in Case No. 90 of 1997, in the matter of M/s. Triveni Refinery (P.) Ltd. confirming final opinion for winding up of the company and the order dated 30.4.2002 passed by Appellate Authority for Industrial and Financial Reconstruction dismissing an Appeal No. 83 of 2002, filed by the company.
(2.) I have heard Sri Ravi Kant, Senior Advocate, assisted by Sri K. M. Garg. The company incorporated on 12.10.1989, set up a factory in March, 1990 at Gudhrauli, district Fatehpur for refining vegetable oils by chemical process. Initial capacity of 7500 M.T. was increased by 3000 M.T. in 1994-95. The factory, however, could not utilise its capacity and incurred losses attributed by company to non-availability of working capital and delay in power supply. A reference was made under Section 15 (1) of Sick Industrial Companies (Special Provisions) Act, 1985 (in short the 'Act') to B.I.F.R. on the basis of accounts for the year ending 31.3.1996, showing accumulated losses of Rs. 63.48 lacs as against net worth of Rs. 42.70 lacs. The company was declared sick under Section 3 (1) (o) of the Act on 11.9.1997 and was permitted to prepare and submit a rehabilitation proposal under Section 17 (2) of the Act within eight weeks after obtaining concurrence from all concerned parties. A rehabilitation proposal was submitted by company dated 8.11.1997. The proposal was partly acceptable to P.I.C.U.P., the only secured creditor. It, however, did not agree for consideration of additional exposure either by term loan or working capital loan. P.I.C.U.P. finally informed B.I.F.R. that it has no acceptable rehabilitation proposals. In proceeding dated 29.7.1998 B.I.F.R. was informed that company has not made a request for seeking extension of time for further negotiations with P.I.C.U.P. It also found that it was not practicable for the company on its own to make its net worth exceed its accumulated losses within a reasonable time and thus it is necessary and in public interest to adopt measures specified in Sections 18 and 19 of the Act. Accordingly I.F.C.I. was appointed as Operating Agency under Section 17 (3) of the Act, to prepare rehabilitation report, keeping in view the provisions of Section 18 and the guidelines issued by B.I.F.R. A detailed techno-economic viability study was required to be carried out. By the same order the company was directed to submit complete and credible revival proposal to operating agency within four weeks and to deposit Rs. 50,000 with I.F.C.I. towards its fees. I.F.C.I. was also required to hold joint meetings of all concerned for consideration of rehabilitation proposal to be submitted by the company.
(3.) WHEN the matter was taken up next on 27.9.1999, the Operating Agency informed B.I.F.R. that the company submitted a sketchy proposal in January, 1999. The proposal envisaged term loan and working capital assistance, which was not tying up with any institution or bank. Company had also not submitted its balance sheet. On inquiry regarding tying up of term loan and working capital, the company merely stated that S.B.I. was examining the proposal. B.I.F.R. observed that the company/promoters were not interested in rehabilitation inasmuch as notice sent were received back undelivered with the remarks "not claimed." The Board issued direction to the operating agency to advertise in leading newspapers inviting offers for taking over/ leasing/ amalgamation/ merger for rehabilitation with or without one time settlement of the dues of financial institutions and bank giving four weeks for submission of offers. Promoters were also required to submit proposals in response to advertisement. Operating agency was also required to formulate a comprehensive rehabilitation scheme based on information on Form A to be collected from the Bench and offered the same to alternate promoters. In the event any complete rehabilitation proposal was not received, the Bench proposed issuance of show cause notice for winding up without holding any further hearing. The company filed an Appeal No. 176 of 1999 against the aforesaid order. By this time, the I.F.C.I. (O.A.) had issued advertisement, in terms of order of B.I.F.R. and it was reported that no proposal was received except a proposal from the company in December, 1999, copy of which were issued to secured creditors for information. In view of the aforesaid developments, the Appellate Authority even though there being no competitive proposal from any body except appellant, which is under examination, gave directions to I.F.C.I. (O.A.) to examine the proposal after taking into account the comments of secured creditors and submit report to B.I.F.R. with advance copies to appellant, and secured creditors, to be considered by B.I.F.R. The operative portion of the order dated February 28, 2000, is quoted as below : "In view of the above development, there being no competitive proposals from anybody other than the appellants and there being only one proposal, which is under examination, as stated by the representative of I.F.C.I. (O.A.), in consultation with the secured creditors, the only direction from us is that I.F.C.I. (O.A.) shall examine the proposal of the appellants on merits after taking into account the comments of the secured creditors and submit a report to the B.I.F.R. with advance copies to the appellants and the secured creditors. The report will be considered by B.I.F.R. after giving an opportunity of hearing to all the parties including, inter alia, the appellants to whom the notice of hearing will be sent by B.I.F.R. at their changed address. The appeal is disposed of." ;