MADRAS PETROCHEM LTD. Vs. B.I.F.R.

JUDGEMENT

(1.) THIS writ petition challenges the order dated 4th February 2002 passed by the Appellate Authority for Industrial and Financial Reconstruction (hereinafter referred to as 'the AAIFR') wherein while dismissing the appeal filed by the petitioner M/s. Madras Petrochem Ltd. and Anr. it was held that the Board for Industrial and Financial Reconstruction (hereinafter referred to as 'the BIFR') had made all efforts to secure the rehabilitation of the petitioner company and the scheme sanctioned in 1991 and 1996 had failed. It was concluded by the AAIFR that the petitioner is heavily indebted and there was no possibility of rehabilitating it. It was held that prolonged proceedings in SICA would no further serve any purpose and would serve the private interests of the guarantors. It is this order which is challenged in this writ petition.

(2.) LEARNED Counsel for the appellant has challenged the divesting of the jurisdiction of the BIFR and the AAIFR in these proceedings. The respondent's stand is that on 26th April, 2004 the following order was passed by this Court: 26 -04 -2004

(3.) IT has been contended that taking of possession of the assets of the Company including its property amounts to having taken measures to recover their secured debts under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'SARFAESI Act') It is, therefore, contended that since indisputably possession has been taken by the ICICI Bank, one of the original debtors, the BIFR no longer has jurisdiction. The learned Counsel for the petitioner has very fairly handed over a copy of the judgment of this Court in the case of Punjab National Bank and Ors. v. AAIFR and Ors. in W.P.(C) No. 12097 -12100/2006 and CM No. 9262/2006 decided on 26th May, 2008 where the issue involved in the phrase 'has taken measures' has been determined by this Court. The learned Counsel also pointed out that there appears to be an error in reference of 2nd proviso to Section 15(1) of SICA in the above judgment. The submission of the learned Counsel is correct and it is thus clarified that the reference to the second proviso made in the judgment of Punjab National Bank (supra) is actually in respect of the third proviso. The relevant portion of the said judgment reads as under: