ZENITH INFOTECH LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) A short and an interesting question falls for our consideration in this writ petition, which is, whether, the Registrar, Board for Industrial and Financial Reconstruction ("BIFR", in short) could have declined the reference of the petitioner on the ground that the petitioner company is not carrying on any manufacturing activity, while scrutinizing the reference filed in terms of Regulation 19 of the Board for Industrial and Financial Reconstruction (BIFR) Regulation, 1987 ("Regulations of 1987", in short).

(2.) Some of the relevant facts are that, the petitioner herein i.e. M/s. Zenith Infotech Ltd., formally known as Zenith Networks Ltd., was incorporated on September 20, 1996 under the Companies Act, 1956. It has set up a factory within the Special Economic Zone at Unit No. 005, Multi-storyed Building, SEEPZ, Andheri East, Mumbai. It is the case of the petitioner company that it was issued a manufacturing licence for manufacture of 12,000 numbers servers NAS and Dataware Housing Products and Customization and loading of softwares. According to the petitioner, the office of the Development Commissioners, SEEPZ Special Economic Zone, Ministry of Commerce and Industry had visited the plant and inspected the manufacturing activity and issued a certificate dated August 5, 2010 to the effect that the company has commenced production, activities for manufacture and export of server NAS and data warehousing products and customization and loading of softwares w.e.f. 13.05.2010. It is also the case of the petitioner in the writ petition that it is carrying on manufacturing activities TigerCloud Backup and Disaster Recovery (BDR) and Smart Style Office. It has its product line in the Private Cloud, Public Cloud and the Backup and Disaster Recovery Market. The products are all electronic equipments with softwares developed by the petitioner pre-installed on this hardware. The products are special purpose equipments and hence, the software of propriety nature are pre-installed on them, are from the petitioner company only.

(3.) On August 01, 2013, the petitioner, based on its duly audited accounts for the period ended 30.06.2013, filed a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 ["SICA", in short] with the BIFR in Form-A, in terms of Regulation 19 being an Industrial Company other than a government company. It is the stand of the petitioner company that its activity falls within the heading 5 Subheading 8 of the Schedule I of the Industries (Development and Regulation) Act, 1951 ("Act of 1951", in short). The reference of the petitioner was declined by the Registrar, BIFR vide its order dated August 12, 2013, wherein, the Registrar communicated to the petitioner the following: