- (1.) Challenge in the present petition is to an order dated 31.08.2012 passed by the Appellate Authority for Industrial and Financial Reconstruction (for short 'the AAIFR') constituted under the Sick Industrial Companies (Special Provisions) Act, 1985.
(2.) The petitioner availed financial assistance from the State Bank of India (SBI), Small Industrial Development Bank of India (SIDBI) as well as the Punjab State Industrial Development Corporation (PSIDC) respondent No.2. The petitioner was declared sick company by the Board of Industrial & Financial Reconstruction (for short 'the BIFR') constituted under the Sick Industrial Companies (Special Provisions) Act, 1985 vide order dated 04.02.2002. BIFR after considering the recommendations of the operating agency passed an order on 02.12.2009. BIFR has taken into consideration the settlement arrived at between the petitioner with SBI and SIDBI, who were holding the debt components of 76.12% and 11.09% respectively as well as the debt component of 12.78% of PSIDC. The operative part of the order dated 02.12.2009 reads as under: "2.8.1 Having considered the submissions made and the material on record, the Bench issued the following directions: (i) Keeping in view the judgments of Hon'ble AAIFR (referred in para 2.5 above), the objection filed by the PSIDC is rejected and PSIDC being a secured creditor with only 12.78% share in the secured debt is directed u/s 19(4) of SICA to accept Rs.44.30 lakh as provided in the scheme under para 11.3 for settlement of their dues in the interest of revival of the company. (ii) The word 'to consider' shall be prefixed before paras 11.4(i) under the head 'State Govt. of Punjab' and para 11.6 under the head 'Director of Industries'. 2.8.2 The Bench observed there is general consensus in respect of the revival scheme, and hence sanctioned the rehabilitation scheme (SS- 09) with the amendments as in para 2.8.1 of these proceedings u/s 19(3) and 18(4) of SICA for expeditious implementation by all concerned. A copy of SS-09 is enclosed as Annexure."
(3.) Aggrieved against the said order, PSIDC filed an appeal before the AAIFR. Such appeal was accepted on 31.08.2012 for the reason that the reference filed by the petitioner stands abated in view of the proceedings initiated by PSIDC under the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act'). The AAIFR proceeded assuming that PSIDC represents 3/4th of the outstanding secured debt of the company and has taken a valid action under the SARFAESI Act. It was observed to the following effect: "7. Whether the appellant Corporation represents 3/4 th of the outstanding secured debt of the respondent company and has taken valid action under Section 13(4) of the SARFAESI Act, is a matter which can be challenged under Section 17 of the SARFAESI Act. The DRT is the right authority to go into this question. A similar view has also been held by the Hon'ble Bombay High Court in the case of Rama Shree Conductors... xxx xxx xxx";