UPPER INDIA COUPER PAPER MILLS COMPANY LIMITED Vs. APPELLATE AUTHORITY INDUSTRIAL AND FINANCIAL RECONSTRUCTION

JUDGEMENT

(1.) Rule D.B.

(2.) This writ petition challenges the order of the Appellate Authority for Industrial & Financial Reconstruction (hereinafter refered to an ''the AAIFR") dated August 27,1993 whereby it declined to interfere with the order passed by the Board for Industrial & Financial Reconstruction (hereinfter referred to "BIFR") dated August 17,1990 holding that the petitioner company was not viable and should be wound up.

(3.) The writ petition arises in the following circumstances: The petitioner company was registered in the Shate of U.P. in the year 1879 and has a factory at Lucknow which manufactured paper and pulp etc. It appears that the company fell on bad days and started accumulating losses. The petitioner company applied to the State of U.P. for permission to expand the unit at Lucknow but neither No objection Certificate was granted by the U.P. Pollution Control Board nor any permission was given by the Director General Technical Development for the same. Pursuant to Section 15(1) of the Sick Industrial Companies (Special Provisions) Act,1985 (hereinafter called "the SICA"), the Board of Directors of the petitioner company passed a resolution on November21,1987 fora reference to the BIFR for determination of the measures which should be adopted with respect to the company as in their opinion the company had become sick industrial company. Accordingly a reference was made to the BIFR. On february 24, 1989 the BIFR declared the petitioner to be a sick Industrial company. It was also of the view that the company cannot make its net work positive within a reasonable time without substantial financial assistance. Therefore acting under Section 17(3) of the SICA it appointed Industrial Credit & Investment Corporation of India Ltd.(for short "ICICI") as the operating agency to prepare a report in consultation with all concerned. It also noted that the petitioner company had appointed Consultants who were making plans for its expansion and the likely cost of expansion would be around Rs.10 crores towards which the promoters were prepared to contribute at least 20%.