Bhaskar Bhattacharya, J. - (1.) This mandamus appeal was heard along with a separate writ application filed by the appellant by which they challenged the order dated 24th April, 2006 passed by the Appellate Authority for Industrial and Financial Reconstruction ("AAIFR") in Appeal No. 146 of 2005 thereby modifying the scheme framed by the Board of Industrial and Financial Reconstruction ("BIFR") to a little extent.
(2.) The facts giving rise to filing of the two writ application, one by the respondent No.1 herein and the other, by the appellant may be epitomised thus: "(1) The respondent No.l herein (hereinafter referred to as the sick company) filed a reference before the BIFR which was registered as Case No.170 of 2000. The BIFR vide its order dated 8th June, 2001 declared the respondent No.1 as a sick company in terms of section 3(1)(c) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the SICA) and appointed the appellant herein as the operating agency. (2) The appellant No.1 before us prepared a one-time settlement-cum-rehabilitation proposal for the company and based on the report and proposal of appellant No.1, a rehabilitation scheme was prepared and ultimately, by an order dated 17th September, 2002, the BIFR sanctioned the scheme. (3) In the said scheme, it was envisaged that the net worth of the company would become positive by 2003-04 and the accumulated losses would be wiped off by 2004-05. The appellant No. 1, namely, IIBI was appointed as the monitoring agency to supervise the progress of implementation of the said scheme. The said scheme inter alia provided that the sick company might have the option to prepay the entire loan. (4) The appellant by its letter dated 10th October, 2002 confirmed that the scheme sanctioned by the BIFR was already circulated for implementation by all concerned and further pointed out the settlement amount to be paid by the sick company to the IIBI and other terms and conditions of the scheme. In Clause VI of the said letter, the IIBI confirmed that the sirk company might have the option to prepay the entire loan. (5) For the rehabilitation and long-term survival of the sick company, various creditors including IIBI, the West Bengal Industrial Development Corporation Ltd. and the Bank of Baroda reconstructed their loans. Under the scheme, IIBI as also the WBIDC waived liquidated damages, penal interest and compound interest upon the date of approval. (6) The sick company continued to liquidate their loan payable to the other secured creditors as envisaged in the sanctioned scheme and prepaid the dues of the WBIDC upon arriving at a one-time-settlement. (7) On August 5, 2005, the sick company made application before the BIFR for deregistration of the company and for its discharge from BIFR and along with its said application, the sick company also submitted the copy of the audited annual account of the company for the year ending 31st March, 2005 which showed that company's net worth had become positive as on 31st March, 2005. The West Bengal Industrial Development Corporation and the Development of Industrial Reconstruction, Government of West Bengal by their letters dated 2nd August, 2005 and 10th August, 2005 issued their 'No Objection Certificates' for deregistration of the sick company. (8) IIBI also prepared a status-report and submitted the same before the BIFR under the cover of its letter dated 22nd August, 2005. The IIBI, by its said status-report submitted to the BIFR, recommended the deregistration of the sick company and also recorded that sick company was implementing a project involving expansion of the steel melting capacity and installation of billet castings and the expansion of rolled products and installation of sub-station to source power involving an estimated outlay of Rs. 2752.52 lakh. (9) The BIFR, vide its order dated 22nd September, 2005 discharged the sick company from its purview and also relieved the IIBI, the appellant from its responsibility as the monitoring agency. In paragraph 5(ii) of the said order, it was inter alia directed that the unfulfilled obligations under the sanctioned scheme would continue to remain in full force during the tenure of the scheme and should be discharged by all concerned agencies. (10) After the order dated 22nd September, 2005 passed by the BIFR discharging the sick company from the purview of BIFR, by a letter dated 27th September, 2005 the sick company requested the IIBI to approve the prepayment of the outstanding amount. (11) It may be mentioned here that BIFR permitted the IIBI to recompense subject to the approval of BIFR. Taking advantage of the said observation of the BIFR, IIBI authority refused to accept the said prepayment and to release the mortgage and charge. In the meantime, the sick company preferred an appeal before AAIFR against the order of the BIFR which permitted the IIBI to recompense. Ultimately, AAIFR by a judgement and order dated 24th April, 2006, in the appeal preferred by the sick company directed the parties to settle the amount in accordance with the Clause 16.1 of the sanctioned scheme and refused to allow the IIBI to exercise the right of recompense. (12) In spite of order passed by the AAIFR, the IIBI having refused to accept prepayment and discharge the mortgage, the sick company preferred a writ application being W.P. No. 948 of 2006 before a learned Single Judge of this Court thereby praying for direction upon IIBI to release the charge on the fixed assets of the sick company on prepayment of the loan and to permit the creation of pari passu charge over the fixed assets of the sick company. The sick company in the said writ application also prayed for interim order restraining the IIBI from refusing to receive and accept the prepayment of its outstanding loan and also restraining them from raising objection in creating pari passu charge over its fixed assets in favour of the WBIDC and other banks and financial institutions. (13) On such an application, the learned Single Judge by order dated 3rd August, 2006 passed an interim order to the effect that in the event the sick company deposited a sum of Rs. 1,04,13,075/- on or before 8th August, 2006 with the appellants before us, they should release the title-deeds which are lying with them for signing and executing the agreement with the WBIDC within 48 hours from the date of such deposit."
(3.) Being dissatisfied with the aforesaid interim order, the IIBI has preferred the APOT No. 378 of 2006 before us.;