MADHUMILAN SYNTEX LIMITED AND ANOTHER Vs. APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION AND OTHERS

JUDGEMENT

(1.) Heard learned counsel for the petitioner and the contesting respondent.

(2.) 1 This writ petition relates to order passed by the Appellate Authority for Industrial and Financial Reconstruction (in short, AAIFR) in appeal 179 of 2000. Petitioner No. 1 company had moved for a reference under Sec. 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short, SICA) on the basis of accounts for the period ended 31.3.1998 before the Board for Industrial and Financial Reconstruction (in short, BIFR). Taking note of the observations made for a previous period, i.e., ending on 31.3.1997, BIFR held that the petitioner company was a sick industrial company within the meaning of Sec. 3(1)(o) of SICA, in case No. 51 of 1997. Said order was challenged by the Syndicate Bank and the SBI in two appeals before the AAIFR. By order dated 14.8.1998, AAIFR allowed both the appeals and set aside the order dated 12.1.1998 and dismissed the petitioner No. 1 company's reference under Sec. 15(1) of the SICA on the basis of its accounts for the period ended 31.3.1997. The orders were challenged before this court in CWP No. 4702 of 1998. On 19.7.2000, the petition was dismissed as withdrawn. An application was filed for review before AAIFR, which was dismissed. While considering the appeal filed by the petitioner No. 1 company in appeal No. 179 of 2000, AAIFR took note of the conduct of the petitioner No. 1 company in alleged manipulation of accounts and held that this was not a fit case for reconstruction of balance sheet after disallowing the inadmissible and manipulated/fake items of expenses/losses. AAIFR inter alia observed as follows :

(3.) The aforesaid quoted portion of the AAIFR's observations essentially forms the subject matter of challenge in this writ petition.