TAMIL NADU INDUSTRIAL DEVELOPMENT CORPORATION LTD Vs. BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION NEW DELHI

JUDGEMENT

(1.) BY consent the writ petition itself was taken up for final disposal.

(2.) PRAYER in the writ petition is to quash the order of the first respondent (BIFR) made in BIFR Case No. 327 of 2000 dated 27.7.2005, confirmed by the second respondent (AIFR) in appeal No. 107 of 2005, dated 12.10.2006 and for consequential directions.

(3.) THE learned Advocate General appearing for the petitioner submitted that the petitioner TIDCO being a State owned Company and having invested huge amount for promoting the third respondent Company, is to be treated to be a person rendered financial assistance and in terms of Section 19(2) of the Sick Industrial Companies (Special Provisions) Act, 1985, consent is necessarily required to be obtained by the operating agency for revival of the company. Petitioner submitted objections for the revival proposal on 16.6.2005 and the BIFR without considering the said objection in its order stated that consent was given by the TIDCO, which is apparently wrong. THE appellate authority also treated the petitioner only as shareholder and not as a financial institution and dismissed the appeal. THE learned Advocate General further submitted that due to the mistake committed by the Directors of the third respondent Company, it went sick and the same cannot be taken advantage of to reduce the capital value of the shares owned by the petitioner. It is further contended that even though the rehabilitation is mandatory, the petitioner company being a Government owned company, having invested the public money in the third respondent Company through shares, is entitled to object the scheme offered for revival and the petitioner need protection to its share capital value without any reduction.