MURALI KANURI Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner in this petition under Articles 226 and 227 of the Constitution has challenged the constitutional validity of section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'SICA' or 'the Act'). Section 20 of SICA is as under :-

(2.) Challenge particularly is to sub-section (2) under which the High Court is mandated to order winding up of the sick industrial company. Petitioners say that the word "shall" in that sub-section may be read as "may" to give validity to the provisions of section 20.

(3.) As to how this question has arisen we may in brief refer to certain proceedings held under SICA. First petitioner, an industrial company, is engaged in the manufacture of high voltage insulators used in power transmission. Unit of the petitioners was set up in a backward area near Hyderabad in joint sector with Andhra Pradesh Industrial Development Corporation Ltd. The unit is financed by the IDBI, IFCI, ICICI, Andhra Bank and the Canara Bank. For various reasons with which we are not presently concerned the first petitioner was declared a sick company under the provisions of SICA. Thereafter, proceedings were held before the Board/BIFR (Board for Industrial and Financial Reconstruction) for revival of the company. Since no scheme could go through, the BIFR issued a show cause notice as to why the petitioner be not wound up. After examining the whole aspect of the matter the Board came to the conclusion that it was just and equitable that the first petitioner be wound up and directed that "its opinion that the unit be wound up be communicated to Hon'ble High Court of Andhra Pradesh." This was by order dated 8 September 1993.