FINITE INFRATECH LTD Vs. IFCI

JUDGEMENT

(1.) From the heart of all matter Comes the anguished cry ? 'Wake, Wake, great Shiva, Our body grows weary Of its law-fixed path, Give us new form Sing our destruction, That we gain new life.' Rabindranath Tagore.

(2.) But, what has all this got to do with this case? This will become clear, shortly. This much is evident, conceptually speaking, that destruction need not be the end alone, it may also be the beginning of something new. Here we are concerned with the repeal of the Industrial Finance Corporation Act, 1948 and the consequential death of the Industrial Finance Corporation of India (hereinafter referred to as 'the Corporation'), which was established under it, as also the birth of the Industrial Finance Corporation of India Limited (hereinafter referred to as 'IFCI Limited'). The repeal was brought about by the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993. But, did the repeal also, simultaneously, establish or constitute IFCI Limited as a new form, a new 'life' of the dead Corporation?

(3.) This question arises in the backdrop of another question, as to whether IFCI Limited (respondent No. 1) is a "financial institution" within the meaning of Section 2(1)(m) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'said Act')? And, this issue arises in view of the prayer sought by the petitioner for quashing the notification No. SO 98(E) dated 15.02.1995, which has been issued under Section 4A(2) of the Companies Act, 1956 notifying IFCI Limited as a public financial institution. If the plea taken by the petitioner that it is not a financial institution within the meaning of Section 2(1)(m) of the said Act is accepted, then the proceedings initiated by IFCI Limited under the said Act against the property of the petitioner in respect of which a mortgage has been created, would be set at naught. This would be so because, then, IFCI Limited would not fall within the meaning of the expression "financial institution" as defined in Section 2(1)(m) of the said Act and, therefore, it would not be entitled to avail the benefits available to a financial institution under the said Act. On the other hand, if the contention of the respondents is accepted that IFCI Limited is such a financial institution then IFCI would be entitled to take and continue proceedings under the said Act.