- (1.) In all the above appeals judgment and order of the learned Single Judge dated 25th January, 2001 has been impugned. The impugned judgment and order was rendered while disposing of three writ petitions being W.P. No. 12377 (w) of 2010, W.P. No. 12406 (w) of 2010 ad W.P. No. 12412 (w) of 2010. By the impugned judgment and order the learned Single Judge decided only one legal issue namely whether Board of Industrial and Financial Reconstruction (for short BIFR) has jurisdiction to entertain any application for reference made by the Baranagar Jute Factory Plc. which is described to be a foreign company or not. It is held by the learned Trial Judge that the above appellant being a company incorporated and further registered in England cannot maintain any application for reference before the BIFR under the provision of Sick Industrial Companies (Special Provision) Act (hereinafter referred to as 'SICA'). The short background fact leading to filing the above writ petition consequently preferring appeal is required to be recorded as follows:- The above company was incorporated in England in or about 1867. The prices of all shareholding is in pound sterling not in Indian Rupees. Admittedly, the aforesaid company incorporated for manufacturing of jute and jute textile products and as such it has got only factory and/or manufacturing unit in India namely at Baranagar which is an outskirts of city of Kolkata. The company was doing well till sometimes 1986 without any difficulty. Thereafter in the year 1987 a winding up petition was filed by one Shree Krishan Omprakash in C.P. No. 2 of 1987. On 28th October, 1987 an order of wining up was passed by the Hon'ble High Court at Calcutta. On 15th September, 1988 one Raj Kumar Nemani and R.S. Ajitsaria moved an application in the aforesaid winding up petition suggesting a scheme for revival of the company and the same was accepted by the Company Judge. Thereafter in between 2000-01 workers of the said Company entered into an agreement with one M/s. Namakar Vinimay Pvt. Ltd. and another company which has also preferred separate appeal as above. Pursuant to such understanding it was decided that Namakar Vinimay Pvt. Ltd and another company purchased shareholding of Baranagar Jute Factory. One Ridh Karan Rakecha and one Chaitan Chowdhury were appointed as Directors of the Baranagar Jute Factory (hereinafter in short 'BJF'). In 2004 both the said Ridh Karan Rakecha and Chaitan Chowhury filed an application before BIFR being reference No. 209 of 2004. However, BIFR did not proceed with the same hence the writ petition was filed in this Court and the learned Single Judge by an order dated 20th February 2006 while disposing of the said writ petition directed, the BIFR to dispose of the reference application within 18 months. It appears that the Company Court thereafter stayed the order of winding up by the Division Bench of this Court and appointed Special Officers and the same was affirmed by the judgment and order dated 24th May, 2006 by the Hon'ble Supreme Court and winding up proceeding has been permanently stayed and the company has been functioning as going concern. In the meantime three petitions were filed by three alleged creditors including M/s. Steel Emporium and Daksh Vyapar (P) Ltd for revival of the winding up order. The said three applications were dismissed by an order dated 5th August, 2008. On 2nd December 2008 in terms of the aforesaid order of the learned Single Judge approved the scheme of revival of the BJF. The notice inviting petition was published on 13th December 2009. On 17th December 2008 Chaitan Chowdhury and Ridh Karan Rakecha resigned from the office of Director of the Company. On 11th November, 2009 the said two persons challenged the resignation unsuccessfully before the Appropriate Court in London. On 17th November, 2009 BIFR sanctioned the scheme of revival of the BJF. In December 2009 on M/s. Sohanlal Chandanmul and company filed a writ petition No. 1166 [later renumbered as W.P.5535 (w) of 2010] challenging the authority of BIFR to entertain the reference in proceeding No. 209/2004. However the said writ petition was withdrawn. Thereafter the above writ petition being W.P.12377(w) of 2010 instituted by Yashdeep Trexim Pvt. Ltd. Writ petitions being W.P.12377 (w) of 2010, instituted by Yashdeep Trexim Pvt. Ltd. W.P. No. 12406 (w) of 2010 was instituted by Baranagar Jute Company Private Limited Workers' and Employees' Union, W.P. No. 12412 (w) of 2010 was instituted by Daksh Vyapar Pvt. Ltd. In all the aforesaid writ petitions the common and cardinal ground was taken that the BIFR has no jurisdiction to entertain the application for reference under SICA made by and on behalf of the said BJF which is a foreign company. The learned Trial Judge allowed two of three writ petitions and one being W.P.12412 (W) of 2010 was dismissed.
(2.) Mr. Hirak Mitra, learned Senior Counsel appearing on behalf of the Baranagar Jute Company Plc (FMA 170 of 2010) appearing for the appellant submits that the SICA has jurisdiction to entertain the application not only in terms of the law and but also on fact as almost 99% of the shareholders of the company are Indians. Company's main and only activity is in India being the Jute Mill with 3,700 strong Indian workers'. The appellant has to spend about Rs. 100 crores in every year to meet the salaries of the workers, make payment to the suppliers of stores, to the jute growers and to the Government by payment of excise, cess sales tax etc. None of the foreigners is involved in the affairs of the BJF because all the secured, unsecured creditors are of Indians and the only unit of the company is situated in West Bengal, India. Legally he submits that the provision of SICA is applicable to this company though it is incorporated in England but it was registered under the Companies Act in India also. The legislative intent of the SICA will appear from its preamble and its statement of objects and reasons of the Act. It will be clear from section 3 of the SICA and that of the Companies Act, 1956 both of which starts with the phrase "unless the context otherwise requires". The definition of the company is an inclusive and not an exclusive one. Thus it cannot be said that the meaning of the word company can have no other imputation. To strengthen his aforesaid legal argument he has relied on following Supreme Court decisions: Leelabai Gajanan Pansare vs. Oriental Insurance Co. Ltd., 2009 AIR(SC) 523, NATIONAL INSURANCE CO LTD vs DEEPA DEVI, 2008 AIR(SC) 735, RAMANLAL BHAILAL PATEL vs STATE OF GUJARAT, 2008 AIR(SC) 1246, N K JAIN vs C K SHAH, 1991 AIR(SC) 1289. Thus the strict interpretation cannot be attached to the definition of the term 'Company' in SICA. Section 591 of the Companies Act provides that sections 592 and 602 both inclusive, shall apply to call foreign companies to have established place of business in India at the commencement of this Act. Section 34(2)(a) of the SICA has defined the word Company which says a body corporate, firm or association of individuals and not in terms of section 3 of the Companies Act. According to him the provisions of sections 13, 14, 15, 16, 17 and 18 of the Companies Act are similar to the provisions of section 592 of the said Act. The statute does not differentiate between a company which has its registered office in India and a company which has registered office outside India. Having regard to the purpose of SICA definition of term 'company' in section 3(d) of the Companies Act cannot be restricted to exclude company incorporated outside India, but registered in India. This would deprive its Indian shareholders, creditors and workers from the protection of SICA, offers, SICA has to be interpreted to extend the foreign company having regard to the public interest it proposes to serve to revive the company in the interest of its workers and creditors. The company was initially wound up by order dated 28th October, 1987 thereafter by an order dated 16.6.1989 winding up order was stayed approving the scheme to run the company. Thereafter the Appeal Court by judgment and order dated 18th November 2004 upset the judgment and order of the learned Single Judge dated 19th December, 2002 by which direction was given to the official liquidator to take up the winding up proceeding and also take over possession and control of the affairs of the company and to represent the company. The said Division Bench also stayed the winding up. The said Division Bench judgment dated 24th May 2006 was affirmed by Hon'ble Supreme Court holding that winding up proceeding is not in force and also directing the Joint Special Officers to continue to oversee the management and the affairs of the company. Thus it cannot be said at the time of commencement of the SICA Amendment Act winding up proceeding was pending. That apart section 22 of the SICA provides that winding up proceeding cannot be proceeded except with the consent of the BIFR. He with the support of the Supreme Court judgment RISHABH AGRO INDUSTRIES LIMITED vs P N B CAPITAL SERVICES LTD, 2000 5 SCC 515 submits that even if the winding up proceeding is pending, BIFR can entertain proceedings. He contends that the writ petition filed by the Yashdeep Trexim Pvt. Ltd is collusive action. This company is a shareholder of the BJF Ridh Karan Rakecha and Chaitan Chowdhury formed a composite group and they approached the Court in United Kingdom together. Yashdeep was all along aware about the proceedings before BIFR. However till Ridh Karan Rakecha and Chaitan Chowdhury were in the Board of BJF, Yashdeep did not approach this Hon'ble Court challenging the proceedings and for the first time in June 2010 challenged the proceeding after the scheme had already been sanctioned by the BIFR. Yashdeep owes Rs. 2.69 crores as interest and is thus interested in ensuring the BJF does not revive. The reference to the BIFR was made on 16th September 2004. Writ petitions were filed after six years from September 2004 till June 2010 to challenge the scheme on ground of lack of jurisdiction of the BIFR, after contesting the proceedings before the BIFR filing objection. It was Chaitan Chowdhury and Ridh Karan Rakecha who had filed the reference before the BIFR and it was at their instance an order was passed by His Lordship Hon'ble Justice Soumitra Sen (as His Lordship then was) on 20th February, 2006. These persons having obtained such orders cannot now support the case of Daksh and/or Yashdeep and challenge the jurisdiction of the BIFR. Moreover, it is the specific case of the BJF that Daksh has been set up by Chaitan Chowdhury and Ridh Karan Rakecha. The BIFR by order dated 2nd December 2008 directed publication to invite objections to the scheme. In spite of such advertisement on 13th December 2009 the writ petitioners did not challenge the jurisdiction of BIFR by challenging the reference. He contends that SICA speaks about sick industrial companies and not its unit. SICA comes into play when net worth of a company becomes negative. BJF has only one unit, and all its shareholders and directors are in India. The entire net worth of BJF is fully eroded. Section 25 of the SICA provides that any person aggrieved by an order of BIFR may within 45 days prefer appeal to the Appellate Authority.
(3.) Learned counsel appearing for Namakar Vinimay Pvt. Ltd. in its own appeal as well being the respondent No. 21 in F.M.A. 170 of 2012 while supporting the argument of Mr. Hirak Mitra contends additionally that in a proceeding concerning BJF instituted by Chaitan Chowdhury against Bhattar and others English Court by a judgment reported in (2010) 10 AER 1031 held that dispute concerning BJF is to resolve by Indian Court for the sake of convenience. Moreover, section 32 of SICA provides that provisions of the SICA and/or any rules and schemes made therein shall have effect notwithstanding anything contained in any other law. In support of his submission he has relied on the decision reported in case of Navnit R. Kamani vs. R.R. Kamani, 1989 66 CompCas 132 and Testeels Limited vs. Radhaben Ranchhodlal Charitable Trust, 1989 66 CompCas 555. He contends that learned Trial Judge has totally ignored section 1(4), preamble, objects and reasons and whole Act which provides context of the whole Act. Section 3 of the SICA and section 3 of the Companies Act starts with the phrase "unless the context otherwise requires" and this has been ignored. This provision has to be read in the light of the Article 39 of Constitution. The definition of the Company given in RBI and payment of bonus Act have no manner of application as this Acts are not pari materia with SICA. His further contention is that definition of statute cannot be used to understand the legislative intent behind another statute unless both are pari materia. This incorporation is possible only when it is registered, section 34 of the Companies Act has been ignored. Even effect of sections 591, 592 to 609 of the Companies Act has been ignored, a company registered under section 592 cannot be treated as unregistered except when factors provided in section 584 are fulfilled that is the company has stopped business in India and that it has been wound up in its country of origin. The context, background and the purpose of SICA has been ignored. Indian workers, business shareholders etc of BJF are important in deciding the applicability of SICA. This has not been considered. The BJF had only one undertaking and that is in India has been overlooked also. A foreign company may have other undertakings, but both under SICA and under the Companies Act only its Indian business was to be considered. The bar alleged was not expressed bar on the face of the statute. Thus, whether the petitioners had raised the issue before the BIFR was not enquired which was required. The contention on behalf of Sri Chaitan Chowdhury and Sri Ridh Karan Rakecha has to be rejected as they themselves filed the application before BIFR for reference case. They thereafter approached various statutory authorities and creditors and took advantage of the fact that a reference was pending before BIFR. The said persons also filed an application under Article 226 of the Constitution of India wherein the Hon'ble High Court directed the BIFR to dispose of the reference expeditiously.;