- (1.) THE petitioners have approached this Court for issuing a writ of certiorari quashing the demand notice dated 22-11 -2006 (Annexure 6 to the writ petition ). Further issuing a writ in the nature of mandamus directing the respondents not to adopt any coercive measures in pursuance of the aforesaid demand notice.
(2.) THE petitioner No. 1 is a private limited company duly incorporated under the Companies Act, 1956. THE petitioner has its work at E-7 to 12 UP-SIDC Industrial Area Oral District Jalaun. THE petitioner No. 2 is one of the Directors of the aforesaid Company, as such, the Board of Directors has authorized in this regard. THE electricity connection was obtained by the petitioners for 4000 KVA-for the pur poses of running an induction furnace for manufacturing M. S. Ingots. THE petitioners entered into an agreement with an erstwhile UPSIDC in the year 1997 and the load was released on 27-6-1997. THE tariff rate applicable to the petitioners concern is of HV-II category and supply is at 33 K. V. THE aforesaid unit was established in pursuance of an incentive scheme in the form of a sub sidy granted by the Government of Uttar Pradesh with regard to units which were to be established in the hill dis tricts and the Bundelkhand region. THE subsidy which was provided by the Government was up to the '50% rebate for the consumption bills to the units es tablished in the areas. THE aforesaid subsidy was continuously being provided to the petitioner till 1999-2000 but after 1999-2000 the aforesaid sub sidy was retrospectively withdrawn and recovery alongwith disconnections were threatened to all such units, as such, the writ petition was filed and in terim order was granted. THE respon dents filed a Special Leave Petition before the Hon'ble Supreme Court which is still pending for consideration. It has further been stated that in the 'meantime similar controversy arose in the case of Hitech Electrothermics and Hydropower Ltd. v. State of Kerala, AIR 2003 SC 2091, before the Apex Court and the Court was pleased to direct the respondents to grant the subsidy on the basis of which unit was to establish. However, the respondents con tinued to show the arrears towards the subsidy in the regular monthly bills. The dues towards 50% of the subsidy amount cannot be realized by the respondents in view of the Sick In dustrial Companies (Special Provisions) Act, 1985 and neither the respondents are pressing for payment of the aforesaid amount shown in the bills. Since the respondents were pressing for recovery of the amount in pursuance of the withdrawal of the sub sidy granted earlier and the petitioners' unit was on the verge of collapse, as such, they move before the Board for In dustrial and Financial Reconstruction under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985. The Beard was pleased to declare the potitioners' unit as sick unit and accordingly for preparation of a rehabilitation package is in the offing. A copy of. the same has been filed as Annexure 2 to the writ petition. The petitioners had accrued the arrears from October 2005 to March 2006 amounting to Rs. 3, 00, 37, 125. 00 and as the petitioners suffered a huge loss they were unable to clear the aforesaid dues. The petitioners have filed a Writ Petition before this Court bearing No. 15622 of 2006 and this Court was pleased to direct that the aforesaid dues be cleared in four quarterly instalments. As the instalment, which was fixed, the petitioners were not in a position to deposit the aforesaid amount,. as such, moved an application for modification but the same was dismissed. Petitioners state that the petitioners have paid three instalments but could not pay any further instalments, therefore, the electricity supply of the petitioners was disconnected on 21- 11-2006. The petitioners have also not paid or able to pay the current bills amounting to Rs. 1, 17, 31, 391. 00. A recovery certificate has been issued by the respondents on 10-3-2006 for an amount of Rs. 2, 01, 54, 476. 00. That when the petitioners paid the current bills dated-3-11-2006 and 2-12-2006 they were informed that the total arrears is amounting to Rs. 16, 46, 91, 742. 00, which is due against the petitioners.
(3.) IT has further been submitted that out of the aforesaid amount Rs. 14, 44, 37, 973. 00 is the amount of Bun delkhand rebate which is sub-judice before the Hon'ble Court. On 7-12-2006, the petitioners moved a repre sentation stating therein that the petitioners' unit have been registered under the BIFR and as such, no recovery proceedings can be initiated against the petitioners. The recovery notice dated 22-11 - 2006 is ex facie, illegal, unwarranted and unjustified in the eyes of law. As the petitioners' unit has been declared unit as sick registered before the BIFR, as such, in view of Section 22 (1), no coercive methods can be initiated pending decision of the proceeding before the BIFR. The respondents come within the purview of the 'state' ambit of Article 12 of the Constitution of India, as such, they have to acted reasonably with fair ness for all actions. Article 300-A of the Constitution of India clearly confers the Constitutional rights upon every person and citizen of India that he shall not be deprived of his rights or livelihood ex cept in accordance with the procedure prescribed under the law. Obviously, in the present case, the disconnection cannot be said to be in accordance with the procedure prescribed under the law and the total action initiated by the respondents is wholly illegal. Further it has been submitted that power of recovery of the Government dues for the supply of electrical energy by the Government undertaking (The Uttar Pradesh Government Electri cal Undertaking (Dues and Recovery) Act, 1958 cannot be said to be a over riding effect of Section 22 of the Sick In dustrial Companies (Special Provisions) Act 1985. Section 22 is being quoted below: "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 instru ment 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 proper ties of the industrial company or for the ap pointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the in dustrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with further, except with the con sent of the Board or, as the case may be, the Appellate Authority. (2) Where the management of the sick industrial company is taken over or changed (in pursuance of any scheme sanctioned under Section 18), notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or in the memoran dum and articles of association of such com pany or any instrument having effect under the said Act or other law- (a) it shall not be lawful for the shareholders of such company or any other person to nominate or appoint any person to be a director of the company; (b) no resolution passed at any meet ing of the shareholders of such company shall be given effect to unless approved by the Board. (3) Where an inquiry under Section 16 is pending or any scheme referred to in Sec tion 17 is under preparation or during the period of consideration of any scheme under Section 18 or where any such scheme is sanctioned thereunder, for due implementa tion of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforce able with such adoptions and in such man ner as may be specified by the Board: Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not ex ceed seven years in the aggregate. (4) Any declaration made under sub section (3) with respect to a sick industrial company shall have effect notwithstanding anything contained in the Companies Act, 1956 (I of 1956), or any other law, the memorandum and articles of association of the company or any instrument having effect under the said Act or other law or any agree ment or any decree or order of a Court, tribunal, officer or other authority or of any submission, settlement or standing order and accordingly, - (a) any remedy for the enforcement of any right, privilege, obligation and liability suspended or modified by such declaration and all proceedings relating thereto pending before any Court, tribunal, officer or other authority shall remain stayed or be continued subject to such declaration; and (b) on the declaration ceasing to have effect- (i) any right, privilege, obligation or liability so remaining suspended or modified, shall become revived and enforceable as if the declaration had never been made; and (ii) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed. (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded. 22-A. Direction not to dispose of as sets.-The Board may, if it is of opinion that any direction is necessary in the interest of the sick industrial company or creditors or shareholders or in the public interest, by order in writing direct the sick industrial com pany not to dispose of, except with the con sent of the Board, any of its assets- (a) during the period of preparation or consideration of the scheme under Section 18; and (b) during the period beginning with the recording of opinion by the Board for wind ing up of the company under sub-section (1) of Section 20 and up to commencement of the proceedings relating to the winding up before the concerned High Court. ";