- (1.) In the instant writ application, the writ petitioner M/s. D.R.M. Steel Industries (P.) Ltd., a company having its registered office at 19, British India Street, Calcutta-69 has challenged an order dated 15th October, 1993 passed by the Board for Industrial and Financial Reconstruction, Special Bench No. 1 New Delhi (hereinafter referred to as B.I.F.R.) in case No. 2/90, whereby the B.I.F.R. has rejected the reference made by the petitioner company under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 and closed the proceeding for want of jurisdiction.
(2.) It is the case of the petitioner company that it is engaged in the running of a mini steel plant at Ulashnagar, Murbad Road in Maharashtra, on the basis of a Conductorship Agreement entered into by and between the petitioner company and the respondent No. 5. The petitioner company is 40% shareholder of the respondent No. 5. The petitioner company experienced an adverse performance since 1987 and it accumulated losses equal to and/or exceeding its entire Net Worth and suffered also cash losses. Accordingly, the petitioner company made a reference to the B.I.F.R. under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the said Act). By an order dated 25th July, 1990 B.I.F.R. observed that the company could not make its net worth positive on its own and though it is necessary in the public interest, to consider the possibility of rehabilitating the petitioner company. Accordingly by the order the B.I.F.R. under Section 17(3) of the said Act appointed State Bank of India as Operating Agency to prepare the rehabilitation scheme for the petitioner company. The matter was heard again by the B.I.F.R. on 6th December, 1991 when after hearing all the parties B.I.F.R. directed the petitioner company to submit a copy of the Conductorship Agreement with M/s. B. R. Harman and Mohta Private Ltd., being the respondent No. 5 herein, by 9th December, 1991 and the State Bank of India as the Operating Agency was also directed to examine the said agreement with reference to Section 3(1)(f) of the said Act in consultation with their legal department and submit their report along with the legal opinion, to the Bench within 20th December, 1991. Pursuant to the said order State Bank of India by its letter dated 16th December, 1991 submitted a report along with the legal opinion before the B.I.F.R.
(3.) On 21st January, 1992 after further hearing the matter as also considering the legal opinion submitted by the State Bank of India and considering the interpretation of the word 'owner' in Section 3(f) of the Industrial (Development) Regulations Act, 1951, the B.I.F.R. came to a finding that the ultimate control over the affairs of the Undertaking, in the instant case, rests with D.R.M. Steel Industries Pvt. Ltd. as they are controlling the affairs of the respondent No. 5 company de facto and de jure while the respondent No. 5 is getting the conductorship fees only and in view of the foregoing position, B.I.F.R. was satisfied that such Industrial Undertaking is an Undertaking within the meaning of Section 3(1)(f) of the said Act. On the said date B.I.F.R. also directed the Operating Agency to submit to revise their Viability Study Report and Rehabilitation Package in the light of the discussion held in such hearing.;