RANKA CABLES LTD Vs. INDUSTRIAL AND FINANCIAL RECONSTRUCTION

JUDGEMENT

(1.) The petitioner is a limited company registered under the Companies Act in the year 1988. The petitioner-Company has two units located at Cuddapah and Patancheru in Medak District; wherein Alluminium cables are manufactured. According to the affidavit filed in support of the Writ Petition, the installed capacity of both the units of the petitioner-Company is 15,000 tonnes per annum. I do not propose to go into the various reasons which made the company incur losses. Admittedly, the accumulated loss as on 31-1-1995 was Rs.733.44 lakhs as against net worth of the company of Rs.133.70 lakhs as defined under Section 3(g-a) of the Sick Industrial Companies (Special Provisions) Act, 1985 ('the Act' for brevity). Admittedly the production was stopped from the month of April, 1993. The Company became a sick industrial company as defined under Section 3(o) of the Act. The matter was referred to the Board for Industrial and Financial Reconstruction (BIFR), under Section 15 of the Act. The same was registered as case No.15 of 1993.

(2.) The BIFR by its order dated 29-4-1994 held that it would be just, equitable and in the public interest the petitioner-Company be wound up; a decision which the BIFR is authorised to take under Section 20 of the Act. Subsequent to the said decision, proceedings were initiated in this Court as contemplated under Section 20 of the Act and a case, being case No.11 of 1994 was registered for the purpose of winding up of the petitioner Company, In the meanwhile, it appears that, challenging the order of the BIFR, dated 29-4-1994, an appeal No.93 of 1994 was preferred before the appellate authority constituted under Section 12 of the Act. The said appeal was also dismissed by an order dated 31-1-1996. Challenging the said order, the petitioner earlier approached this Court by filing Writ Petition No.4183 of 1996. A learned single Judge of this Court by order dated 16-7-1996 allowed the said Writ Petition. While allowing the said writ petition, the learned Single Judge held as follows:

(3.) As can be seen from the above, in substance, the learned Single Judge set aside the order of the appellate authority and remanded the matter to the original authority (BIFR) with a direction to request the Operating Agency to first frame a scheme and then ask the petitioner-Company to bring up a proposal. As a consequence of the said order, R.C.C. No.11 of 1994 was also closed by an order dated 16-7-1996.