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IN THE MATTER OF SOMANI IRON & STEEL LTD.

High Court of Judicature at Allahabad

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In The Matter Of Somani Iron & Steel Ltd. - COMPANY PETITION No. 140 of 1998 [2006] RD-AH 7108 (3 April 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Court No. 9

COMPANY PETITION NO. 140 OF 1998

Alstom Ltd. - Petitioner-company

Versus

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;

"Sir,

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.

Yours faithfully,

Sd/-

(Mrs. S. Nagarajan)

Bench Officer"

2

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.

Dt. 3.4.2006

RKP/- CP-140-98


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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