HENNA GEORGE Vs. UNION OF INDIA AND ORS.

JUDGEMENT

(1.) The petitioner, an Advocate practicing inter alia before the Board for Industrial and Financial Reconstruction (BIFR) has filed this petition under Article 226 of the Constitution of India as a Public Interest Litigation (PIL) to flag the issues of the functioning of the BIFR having virtually come to an end owing to the vacancies in the office of the Members of the BIFR and which have not been filled up for long and which has resulted in enhancement of non -performing assets, scheme and for revival of distressed entities piling up, creditors of the sick companies being made to wait indefinitely etc.

(2.) The petition was entertained and the learned ASG asked to obtain instructions. A counter affidavit dated 10th February, 2015 was filed by the Director to the Government of India, Ministry of Finance informing that, (i) BIFR then was existing of three members, of which one had been authorized to act as Chairman; (ii) that the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) under which BIFR had been constituted was proposed to be repealed and the Sick Industrial Companies (Special Provisions) Repeal Bill, 2003 providing for repeal of SICA and abolition of BIFR and Appellate Authority Industrial and Financial Reconstruction (AAIFR) had been passed in both the Houses of Parliament; (iii) the Companies (Second Amendment) Act, 2002 providing for establishment of National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) to deal exclusively with the company cases for their speedy disposal had been passed in the Parliament; (iv) the further steps for constituting NCLT were dependent on the outcome of W.P.(C) No. 1072/2013 pending adjudication before the Supreme Court; (v) in such a situation, the filling up of the posts of the Members of BIFR remained; (vi) a Bench of BIFR as per Sec. 12 of SICA is to consist of not less than two Members; that the three members of the BIFR were sitting in two Benches; (vii) that though vide Sec. 4(2) of SICA BIFR is to consist of 14 members but only one post of Chairman and eight posts of Members have been sanctioned; (viii) however all the said posts were also not being filled owing to the proposed dissolution of BIFR and AAIFR; and, (ix) owing to the legal challenges to the constitution of the NCLT, the proposal is held up.

(3.) A further affidavit dated 22nd April, 2015 was filed by the Under Secretary, Ministry of Finance informing that the Government in W.P.(C) No. 1798/2015 titled International Asset Reconstruction Pvt. Ltd. Vs. BIFR had assured that steps would be taken to ensure the functioning of BIFR and had been directed to pass appropriate orders, as recorded in the order dated 20th March, 2015 therein.