COMPUTER SKILL LTD Vs. CHAIRMAN AND MD

JUDGEMENT

(1.) The present petition has been filed by the petitioner under Art. 226 of the Constitution of India as well as as under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ' SARFAESI Act') and the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as 'SICA') for the prayer to issue a writ of certiorari or writ, order or direction quashing and setting aside the judgment and order passed passed by the Appellate Authority for the Industrial and Financial Reconstruction, New Delhi (for short 'AAIFR') in Appeal No. 75 of 2010 and also the order passed by the Board for Industrial and Financial Reconstruction (for short 'BIFR') in Case No. 73 of 2006 dated 30.3.2008. Interim relief against taking any coercive steps with regard to the properties of the petitioner Company and its promoters is also prayed.

(2.) The above prayers have been made on the grounds set out in detail in the Memo of Petition, inter alia, that the impugned oder is passed by AAIFR on erroneous interpretation of the provisions of SICA and SARFAESI Act. It is contended that the view taken by the AAIFR that the provisions of SARFAESI Act will override the provisions of SICA since the SARFAESI Act is a later enactment is erroneous in view of the provisions of Sec. 37 of the SARFAESI Act. It is also contended that the provisions of SICA involves larger dominant public interest and the same will prevail over the provisions of SARFAESI Act. It is also contended that though Sec.35 of the SAFEAESI Act gives an overriding effect to the provisions of SICA. Sec. 37 of the SARFAESI Act makes it expressly clear that the provisions of the said Act and the Rules made thereunder are in addition to, and not in derogation of, any other law for the time being in force and therefore it has been contended that the third proviso to Sec. 15 of SICA providing for Reference to the BIFR shall abate if the secured creditors representing not less than 3/4th in value of the amount outstanding against a financial assistance will have the application under Sec. 13(4) of the SARFAESI Act and it cannot be read in isolation overlooking the provisions of Sec. 22(1) of SICA read with Sec. 37 of the SARFAESI Act. It is specifically contended that considering the scheme of both the Acts, AAIFR has failed to appreciate that once action is taken under Sec. 13(4) of the SARFAESI Act, it will jeopardize the possibility of reviving the Company which has filed a Reference before the BIFR, which in turn has bearing on employment to the employees and the revival of the Company. Therefore, it is contended that if the interpretation which is adopted by AAIFR giving an overriding effect to Sec. 13(4) of the SARFAESI Act is accepted, it will frustrate the provisions of SICA. It is also contended that the impugned order passed by AAIFR holding that the Reference before the BIFR has been abated solely on the basis of the application of the Union Bank of India which has taken possession of the office premises belonging to the petitioner Company has failed to appreciate that it would frustrate the rights of the petitioner Company available to it under SICA.

(3.) Learned Sr. Counsel Mr. K.M. Patel appearing with learned Advocate Ms. Paurami Sheth for the petitioner Company referred to the impugned order passed by the AAIFR and submitted that an erroneous interpretation of the provisions of two different statues, which are also special statues, is required to be considered. Learned Sr. Counsel Mr. Patel submitted that the moot question which is required to be considered is whether the Reference can stand abated in view of the provisions of the SARFAESI Act, when the possession of the entire assets of the petitioner Company are not taken over and the chances or rival of the Company have not been considered. He submitted that for the purpose of considering the Reference made under Sec. 15 of SICA, it has to be specifically considered as provided in the third proviso which has been pointedly referred to by learned Sr. Counsel Mr. Patel.