SUDHIR NARAIN,J. - (1.) THIS writ peti ­tion has been filed by the Trade Unions against the order dated 19 -1 -1995 passed by the Board for Industrial and Financial Reconstructions (in short BFIR), recom ­mending to this Court for winding up of Cownpore Textiles Ltd., (in short CTL), Respondent No. 4 and the order of the Appellate authority for industrial and Financial Reconstruction (in short AAIFR), dismissing the appeal against the said order on 9 -5 -1997.
(2.) THE effort of the petitioners is that the CTL be revived instead of winding up, as about 17CO workers will be deprived of their wages in case the company is wound would up. The facts leading to the present petition are that Respondent No. 4 M/s. Cownpore Textiles Ltd. carries on busi ­ness of manufacture of cotton yarn, cotton fabrics mainly of course and medium varieties of yarn at Kanpur. It also manufactures cloth for general public and For Government Institutions. It was estab ­lished in the year 1920. The British India Corporation Ltd. (in short BICL) held 49.10% shares in CTL. The Government acquired these shares under the provisions of Section 3 (1) of the British India Cor ­poration Ltd. (Acquisition' of Shares) Ordinance, 1981, and that stood vested in the Central Government. In the year 1984, one per cent additional share was acquired by the BICL whose holding became 50.10 per cent CTL thus became the subsidiary of BICL and a Government Company as, provided under Section 617 read with Sec ­tion 4 of the Companies Act, 1956. By the year 1981 CTL suffered huge loss. CTL made a reference to the Board. The BFIR found that at the end of the financial year accumulated losses were exceeding its en ­tire net worth. It declared CTL as sick in its meeting held on 7 -12 -1992 with the fol ­lowing observation ''Referring to the 'relevant Balance Sheet(s), Sri Jain stated that the financial posi ­tion discussed therein is factually correct. In terms there of at the end of the financial year ending 31 -3 -1992 accumulated losses suffered by the company about to Rs. 2,812.88 lakhs which had completely eroded the net worth of the company consisting of Rs. 75.34 lakhs with no free reserves. The company suffered cash loss of Rs. 582,01 lakhs during that year and cash loss of Rs. 421.78 lakhs during the preceding year ended31 -3 -1991. None else present disputed the said financial position. Accordingly, we arc satisfied that the company, has become a sick industrial com ­pany in terms of the provisions of Section 3 (l)(c)of the Act."
(3.) ADMITTEDLY , the company was suf ­fering loss every year and ft was rightly declared as sick company. The BFIR was, however, concerned as to whether this company could be revived. It appointed Industrial Development Bank of India (in short IDBI) as operating agency under Section 16 of the Sick Industrial Com ­panies (Special Provisions) Act, 1985 (hereinafter referred to as the Act). On behalf of the Company, it was submitted that the task of preparing a viable rehabilitation proposal was entrusted to Bombay Textile Research Association (BTRA). It had submitted a draft report to the Ministry of Textiles which had ac ­corded its approval in principle.;