JAY ENGINEERING WORKS LTD Vs. INDUSTRY FACILITATION COUNCIL

JUDGEMENT

(1.) Leave granted.

(2.) The Appellant herein is a public limited company engaged in business of manufacturing electronic fans and fuel injection equipments. Respondent No. 2 is a small scale industry. It manufactures copper wires. It supplied its products to the Appellant herein during the period 28th December, 1996 and 3rd June, 2000. As the Appellant Company became sick, its Board of Directors made a reference in terms of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short the 1985 Act) on 8.4.1994. The Appellant Company was declared as sick unit by the Board for Industrial and Financial Reconstruction (for short "the Board"). A rehabilitation scheme was framed by the Board but it was declared to have failed by an order on 12.7.2001. By reason of the said order, however, Industrial Development Bank of India (IDBI) was appointed as an operating agency. A fresh report was submitted by the said operating agency on 20th March, 2003 which was accepted by the Board whereupon a fresh rehabilitation scheme was sanctioned on 8.4.2003.

(3.) In the meanwhile, the Respondent No. 2 herein filed a claim petition before the Industry Facilitation Council (for short "the Council") Respondent No. 1 herein in terms of the provisions of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 (for short "the 1993 Act"). Before the Council, the Appellant herein raised a plea that it had been declared to be a sick company by the Board and as such the matter should not be proceeded further. The Council, however, opined that only because the Appellant Company has been declared sick by the Board, it would not bind the Council to take a decision in the matter. It passed an award directing: