PRIMA INDUSTRIES LTD Vs. DY. COMMISSIONER

JUDGEMENT

(1.) The above writ appeals came before us on a reference made by a Division Bench of this Court on 21/10/2005 in WA 1892/2005. But we do not propose to dispose of the individual appeals on merits since we do not think it is necessary to go into the factual details for answering the issue referred. However, for the purpose of answering the reference we shall refer to the essential facts stated in WA 1892/2005.

(2.) The appellant M/s. Prima Industries Ltd. was served with a letter dated 31/01/2005 by the BIFR stating that their application dated 08/12/2004 has already been received and that the same stands registered as Case No. 36/2005. Further proceedings are still pending before the BIFR. It is contended by the petitioner that since the enquiry contemplated under S.16 of the Sick Industrial Companies (Special Provisions) Act, 1985, (the Act for short) having commenced as soon as the registration of the reference is completed after scrutiny and hence by operation of S.22 of the said Act, further action against the Company's assets must be stayed till a final decision is taken by the BIFR. In support of the same, reliance was placed on the decision of the apex court in Real Value Appliances Ltd. v. Canara Bank ( 1998 (5) SCC 554 ) which was subsequently followed in the later decision of the apex court in Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. ( 2000 (5) SCC 515 ). However in another decision of the apex Court in Dy. Commercial Tax Officer v. Corromandal Pharmaceuticals ( AIR 1997 SC 2027 ) while considering the scope of S.22 of the Act, it was held as follows:

(3.) This decision was followed by this Court in The Aluminium Industries Ltd. v. State of Kerala ( 2005 (1) KLJ 424 ). When the matter came up for consideration before the Division Bench, it opined that there is some conflict in the reasoning adopted by the Supreme Court in Corromandal Pharmaceuticals's case and Real Value Appliances's case and hence the matter was referred to a Larger Bench. Before we refer to the various decisions of the apex court interpreting the scope of S.22 of the Act, we shall refer to the scheme of the Act for a better appreciation of the issue on hand.