High Court of Judicature at Allahabad
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In The Matter Of Somani Iron & Steel Ltd. - COMPANY PETITION No. 140 of 1998  RD-AH 7108 (3 April 2006)
Court No. 9
COMPANY PETITION NO. 140 OF 1998
Alstom Ltd. - Petitioner-company
Somani Iron & Steels Ltd. - Respondent-company
Hon'ble Sunil Ambwani, J.
This creditor's winding up petition is pending since 1998. The Court was informed by the respondent-company that a reference was made by the company under Section 15 (1) of the Sick Industrial Companies (Special Provision) Act 1985, was registered as Case No. 213 of 2001, and that vide order dated 28.8.2002 the respondent company was declared as Sick Industrial Company and the IDBI was appointed as the 'Operating Agency'. A rehabilitation scheme was submitted before the operating agency in pursuance of order dated 13.2.2003.
Since thereafter the matter is pending awaiting decision of the BIFR. On 5.4.2005, this Court asked the respondent company to give the status of the proceeding before BIFR.
The respondent company has filed a letter along with an affidavit of Sri Mool Shankar Dixit annexing therewith an order of the Bench Officer of BIFR dated 1.8.2005 in Case No. 213/2001- M/s Somani Iron & Steels Ltd which reads as follows;
Please refer to your letter dated 5.7.2005 on the above case.
Copies of the proceedings of the hearing in the above case held on 28.8.2002 and order dated 13.2.2003 are forwarded. It is confirmed that no further hearing/order in the case has been held/passed.
Although the company has submitted a revival proposal to the Operating Agency (IDBI). The same was reported to be beyond RBI guidelines and as such OA did not prepare and submit a Draft Rehabilitation Scheme for approval and circulation by the Board. As such the matter is still pending.
(Mrs. S. Nagarajan)
The bar of Section 22 is being misused by Sick Industrial Companies. The delay not only defeats the rights of the creditors and workmen but also is not in public interest. The BIFR should not encourage to keep the umbrella of protection open where the company does not deserve such protected. In the present case, the creditors have approached this Court complaining that inspite of statutory notice, the respondent company has not paid Rs. 2, 01, 08, 103/- and a sum of Rs. 93, 68, 959/- on account of interest upto 28.2.1998.
The law should not operate to oppress rightful claimants and defeat their legitimate remedies. The bar under section 22 cannot be unreasonably stretched to allow the BIFR to keep sitting over matters for years together.
In the facts and circumstances, exercising powers vested in High Court under Article 226 of Constitution of India, I direct the BIFR to conclude the matters within three months and to report directly to this Court with the result of pending proceedings. This order is without prejudice to any possibility of rehabilitation but that possibility should not be by way of unreasonable accommodation to the respondent company.
Let the Official Liquidator communicate this order to the BIFR within a week. Copy of this order shall be given to the Official Liquidator. List on 3.7.2006.
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