Dilip Kumar Seth, J. - (1.) The petitioner-company Sarla Gems Ltd. having become sick as defined in the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), was referred on September 8, 1998, under Section 15(1) of the SICA before the Board for Industrial and Financial Reconstruction (BIFR), in BIFR Case No. 244 of 1998. On February 22, 1999, Bank of Baroda was appointed the operating agency under Section 17(3) of the SICA upon a declaration under Section 3(1)(o) of the SICA that the petitioner-company was a sick industrial undertaking.
(2.) The petitioner submitted a rehabilitation package for reviving the undertaking. In the said scheme a proposal was mooted for establishment of an undertaking for production of PVC compound in pallate form and powder form which is in heavy demand for manufacture of electrical cable industries footwear industry and moulded goods, pipes, agricultural houses, films and various other materials at a different site. Upon consideration of the said scheme, the BIFR rejected the said scheme by a reasoned order passed on April 17, 2000, in BIFR Case No. 2144 of 1998 contained in annexure H to this petition. It is this order which is the subject-matter of challenge in this writ petition.
(3.) Mr. Bhaskar Sen, learned counsel for the petitioner, assails the said order on various grounds. According to him, the rejection of the scheme on the ground that the scheme was not a rehabilitation proposal but a setting up of a new project is bad in law. In such circumstances the SICA was promulgated for revival of sick companies and not sick units as is apparent from the preamble to the SICA. This contention is supported by him upon a reference to Section 3(1)(o) under which "sick industrial company" was defined to be a company. Therefore, in order to rehabilitate the company, it is immaterial as to what project the company would take up. It is also not necessary that the same equipment or unit is to be used or even the same site has to be utilised. It is not the unit or the undertaking but it is the company which is to be revived. Any of the objects incorporated in the memorandum or articles of the company may be undertaken for rehabilitation of the company. He has also cited a few instances giving particulars with regard to the permission to open altogether a new venture by Phinix Mills Ltd., Shreeram Mills Ltd. and Hindustan Mills Ltd. He has pointed out that all these companies were permitted to shift their business even to the extent of construction of buildings on the land of those mills. He had also relied on, to support his contention, the case of Upper India Couper Paper Mills Co. Ltd. v. Appellate Authority for Industrial and Financial Reconstruction [1992] 75 Comp Cas 653 (Delhi). Relying on the said decision, he contended that it was the company the rehabilitation of revival whereof is the aim and object of the SICA. The purpose of rehabilitation or revival had never been intended to be confined to an undertaking or a unit of the sick company. He had referred to various Sections of the SICA and had elaborated his submissions in order to elucidate the points canvassed by him. Relying on the decision in the case of Subhash Kumar Bhuwalka v. Appellate Authority for Industrial and Financial Reconstruction [1995] 83 Comp Cas 606 (Delhi) he contended that if the operating agency is unable to prepare a scheme, in that event the BIFR is expected to get some other rehabilitation scheme proposed by themselves or by some other institutions. According to him, this judgment points out to the scheme of the Act and attempt to revive the company. He had also referred to the case of B.P. Choudhury v. Appellate Authority for Industrial and Financial Reconstruction [1996] 86 Comp Cas 176 (Delhi) wherein it was held that all endeavour and efforts for revival and rehabilitation of the sick company is the intended object of the SICA. Only when revival becomes impossible it is to be ordered for winding up.;