GARWARE PLASTICS AND POLYSTER LIMITED Vs. APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION

JUDGEMENT

(1.) This petition under Article 226 of the Constitution is directed against the scheme sanctioned by the Board for Industrial and Financial Reconstruction (for short 'the Board') under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'the Act') by its order dated 27 January 1994. The scheme envisaged amalgamation/merger of M/s. Flowmore Polyester Ltd. ('F.P.L.' for short), a sick industrial company, with M/s. S.R.F. Limited (for short 'S.R.F.'). The petitioner is also challenging the order dated 28 January 1994 of the Appellate Authority for Industrial and Financial Reconstruction ('Appellate Authority' for short) holding that the impugned scheme was in the positive interest of the sick industrial company F.P.L.

(2.) The petition was originally filed in the Bombay High Court (Aurangabad Bench) and the respondents were five in number; namely, the Appellate Authority, the Board, S.R.F. Ltd, F.P.L., and the Industrial Finance Corporation of India ('I.F.C.I.' for short). Two more respondents were added by order of the court dated 14 February 1994, and these were the Central Board of Direct Taxes (C.B.D.T.) and the Union of India through the Secretary, Ministry of Finance, Department of Revenue. This petition thereafter came to be transferred to this Court by an order dated 9 March 1994 of the Supreme Court on an appeal filed by S.R.F. challenging the order dated 14 February 1994 passed by the Bombay High Court (Aurangabad Bench) staying the impugned orders of the Board and the Appellate Authority, and also on the ground that Bombay High Court had no territorial jurisdiction to entertain the writ petition. The Supreme Court did not wish to go into the merits of the order dated 14 February 1994 of the Bombay High Court which it said was interim order, but transferred the petition to this Court. The Supreme Court recorded that the counsel for the parties were agreeable to that course. That is how the matter has come before us

(3.) Before we go into the various facets of the dispute it may be advantageous to set out the relevant provisions of the Act. We may, however, note that it has not been disputed that F.P.L. was a sick industrial company within the meaning of clause (o) of section 3 of the Act and had to be rehabilitated. The Preamble would give the object of the Act to an extent, and it is as under :-