- (1.) The above numbered two writ petitions are by Aristo Pulp and Paper Ltd., a public limited company (for short, the Company). The Company was originally incorporated as Industrial Precision Screws Ltd. in 1974, but later on its name was changed to that of the Company in 1981. The Company established a small paper mill at village Raghunathpura, Distt. Bundi which is an industrially back- ward district in the State of Rajasthan. In the first of the above two writ petitions, namely S.B. Civil Writ Petition No. 1589/1992 (Aristo Pulp & Paper Ltd. Vs. Rajasthan Financial Corporation and another), the Company while making the Rajasthan Financial Corporation (for short, the RFC) and Rajasthan State Industrial Development & Investment Corporation Ltd. (for short, RIICO) as respondents, has challenged the notice (Annr. 2) dated October 29, 1991 issued by the RFC under Section 30 of the State Financial Corporation Act, 1951 (for short, the Act). In S.B. Civil Writ Petition No. 5192/1991-Aristo Pulp & Paper Ltd. Vs. Appellate Authority for Industrial & Financial Reconstruction, New Delhi, the Company besides arraying RFC and RIICO, as respondents Nos. 5 and 6, has also arrayed the Appellate Authority for Industrial & Financial Reconstruction, New Delhi (for short, the Appellate Authority) and the Board for Industrial and Financial Reconstruction for New Delhi (for short, Board) including Aristo Pulp & Paper Ltd. Employees Union and has claimed reliefs that the order dated May 13, 1991 (Annr. 11) passed by the Appellate Authority be quashed and the case may be remanded to it to consider the revival scheme and to pass appropriate order in accordance with law. Because both.the writ petitions are by the same company and some of the points are identical, I proceed to dispose of both of them by this common order.
(2.) The petitioner company took a loan of Rs. 25 lacs from the RFC under a deed of mortgage executed by the Directors of the Company in favour of the RFC on July 29, 1981. The amount of loan under the terms and conditions of mortgage deed was required to be paid in instalments. In addition to the loan taken from the RFC, the Company also took loan from the Bank of Rajasthan and RIICO and the dues of RIICO on June 30,1987 are, alleged to have increased to the amount of Rs. 77.75 lacs. According to the Company the accumulated losses as on June 30, 1987 amounted to Rs. 109.74 lacs while its net worth consisting of only paid up capital amounted to Rs.65.83 lacs and the company incurred a cash loss of Rs. 7.83 lacs for the accunting period ending on June 30,1986 and a cash loss of Rs. 40.10 lacs for the year ending on June 30, 1987. The company has outstanding dues to the Bank of Rajasthan Ltd. amounting to Rs. 65.41 lacs as on June 30, 1987, to RIICO the dues are said to be to the tune of Rs. 77.75 lacs and to RFC it comes to Rs. 29.20 lacs. Besides this, the company has outstanding statutory liabilities of nearly Rs. 21 lacs.
(3.) As a result of the aforesaid grave situation the company made a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, the Act of 1985) to the Board and the Board in case No. 75/88 considered the matter and appointed Industrial Reconstruction Bank of India (for short, IRBI) as the Operating Agency to examine the viability of the unit under its order dated March 15,1989. The Board examined the entire matter and under its order dated November 23, 1989 allowed two months' time for submitting a rehabilitation scheme under the new management and the Operating Agency was directed to co-ordinate finalisation of the proposed scheme for submission to the Bench within the stipulated time. The Board prima facie held that the Company be wound up as it is not possible to rehabilitate it. It invited suggestions/objections, if any, and notices were issued to RIICO, the Bank of Rajasthan Ltd. and RFC. General Notice was also issued. After hearing suggestions and objections, the Board under its order dated August 27, 1990 came to the conclusion that there was no possible scheme to rehabilitate the company offered by any party and therefore the company should be wound up. The matter was referred to the Delhi High Court for necessary action to be taken in this regard.;