Review Pet. Nos. 289, 291, 292, 293, 294, 295, 296, 407/2014 in W.P.(C) 5010, 5954, 5197/2011 & Cm No. 10169, 12050, 10541/2011. Case: 1. RR Kabel Limited, 2. Incab Sramik Sangh & Ors., 3. All India Incab Industries Employees Federation & Ors. Vs 1. M/s. Incab Industries Ltd & Ors., 2. Appellate Authority for Industrial & Ors., 3. Aaifr & Ors.. High Court of Delhi (India)
| Case Number | Review Pet. Nos. 289, 291, 292, 293, 294, 295, 296, 407/2014 in W.P.(C) 5010, 5954, 5197/2011 & Cm No. 10169, 12050, 10541/2011 |
| Counsel | For Appellant: Mr. Rajiv Nayar, Sr. Advocate with Mr. Darpan Wadhwa, Mr. Saurabh Seth, Ms. Sonia Dube and Mr. Anurag Singh for RR Kabel Ltd., Mr. Barun Kumar Sinha with Ms. P. Sinha, Advs. and For Respondents: Mr. Vivek Sibal with Mr. Ankur S. Kulkarni, Mr. Anand Srivastava and Mr. Shubham Jaiswal, Mr. Barun Kumar Sinha with Ms. P. Sinha, Mr. ... |
| Judges | Badar Durrez Ahmed and Siddharth Mridul, JJ. |
| Issue | Sick Industrial Companies (Special Provisions) Act, 1985 - Sections 10, 17(3); Motor Vehicles Act, 1939 |
| Judgement Date | April 16, 2015 |
| Court | High Court of Delhi (India) |
Judgment:
Siddharth Mridul, J.
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By way of present petitions, the petitioners seek review of the order dated 04.04.2014 passed by this court in WP (C) Nos.5010/2011, 5954/2011 and 5197/2011 whereby this court rejected the preliminary objection of the petitioners, that the matter was decided by a bench of Board for Industrial and Financial Reconstruction (hereinafter referred to as "BIFR") which had not heard the arguments.
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M/s Incab Industries Ltd is a sick industrial company. In October, 1999 a reference was made by it to the BIFR and subsequently, it was declared a sick industrial company by an order passed by the BIFR dated 04.04.2000. The State Bank of India (hereinafter referred to as "SBI") was appointed as the Operating Agency ("OA") under section 17(3) of the Sick Industrial Companies (Special Provisions) Act,1985 (hereinafter referred to as "SICA") to examine the viability of the company and submit a rehabilitation scheme.
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After several years, three proposals were submitted by Silver jubilee Infrastructure Ltd., R.R.Kabel and Land Lease Co. Ltd. (LLC). These proposals were examined by the OA which also held discussions with its propounders. Thereafter, several rounds of litigation followed. In the meantime two other companies also joined in, namely, Pegasus Assets Reconstruction Pvt. Ltd. (PARL) and TATA Steels Ltd. (TSL). They also submitted their respective draft rehabilitation schemes (DRS).
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The matter reached the Delhi High Court and thereafter the Supreme Court which gave certain directions. Pursuant to the order dated 14.05.2009, three bidders were permitted to submit the DRS; they were R.R. Kabel, TSL and PARL. Following the orders of the Supreme Court, hearings took place before the BIFR on 02.07.2009, 19.08.2009 and 22.09.2009. In the proceedings before the BIFR, several workers'' associations were allowed to join the proceedings if they so desired, subject to furnishing of proof that they were recognized unions of the said sick company.
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In the hearing which took place before the BIFR the coram comprised of Mr. K Cherian Verghese, Chairman, Mr. Pawan Raina, Member and Nirmal Singh, Member. On that date, the BIFR considered the report of the OA dated 1.9.2009 and directed the OA to give a further report in a tabular form setting out the parameters, to hold a joint meeting with all concerned parties and to submit a further report containing the valuation of the three proposals submitted by RR Kabel, TSL and PARL in accordance with the order of the Supreme Court.
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Pursuant to this, the OA conducted a joint meeting on 20.10.2009 and through its report dated 26.10.2009 gave its comprehensive and comparative analysis of all the three schemes and reiterated its earlier opinion that the scheme propounded by the TSL was best suited and the future of the workers of the Sick company would be secure with the TSL''s proposal.
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The report was submitted to the BIFR which held a hearing on 12.11.2009. On this date, the parties opposing the scheme prepared by TSL objected to the report of the OA, upon which the BIFR directed them to file written submissions. The OA as well as the sick company were directed to give their comments on the submissions so received. The coram of the BIFR comprised of Mr. Cherian Verghese, Chairman, Mr. Pawan Raina, Member and Smt Saroj Bala, Member. The parties submitted their respective written submissions to the report of the OA.
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On. 24.11.2009, the BIFR held a hearing in which the coram comprised of Mr. K Cherian Verghese, Chairman and V K Malhotra, Member. It considered the report of the OA dated 26.10.2009, the objections/submissions of the parties to the same and sought further clarifications from the parties. The OA was directed to reconcile the figures mentioned in the report, to recast the report and submit a supplementary report.
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Accordingly, on 27.11.2009, the OA gave its supplementary report in which also it was made clear that the scheme of the TSL was the best on all parameters, including the protection of the interest of the workers.
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On the next hearing which took place on 30.11.2009 before the BIFR, the coram comprised of Mr. K Cherian Varghese, Chairman and Mr. VK Malholtra, Member. The BIFR sought written submissions to the report of the OA dated 27.11.2009 and also sought clarifications from the three propounders as well as from the OA. They were all directed to give their clarifications by 02.12.2009. The OA was also directed to give its views on the clarifications given by the propounders. It was declared by the BIFR on that date that its decision will be announced on 09.12.2009.
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Accordingly, on 02.12.2009, RR Kabel, PARL and others opposing the scheme of the TSL submitted their respective written submissions to the BIFR. On 07.12.2009, the OA by its letter gave its comments to the written submissions of the parties opposing the scheme of the TSL.
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On 09.12.2009, the coram of BIFR comprised of Mr. K Cherian Verghese, Chairman and V K Malhotra, Member passed the final order holding that the scheme of the TSL is the best among all the bidders and satisfied all the parameters set by the Supreme Court and Delhi High Court. Accordingly, it directed the TSL to submit its draft rehabilitation scheme.
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Appeals were preferred to the AAIFR by RRK and two of its workers'' union supporting it against the order passed by the BIFR on 09.12.2009. An appeal was also filed by PARL.
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One of the contentions raised before the AAIFR by the appellant was that the bench of the BIFR which passed the final order on 09.12.2009 was not the same bench which heard the entire arguments. Therefore, the said bench should not have passed the final order. TSL resisted the contention by submitting that it is not possible for the same members to hear the arguments before BIFR since the proceedings go on for several years during which the members of the BIFR regularly change on account of retirement etc. It was further submitted before the AAIFR that the BIFR adopts the procedure regularly to record the gist or the summary of the proceedings of each hearing in the subsequent orders. It was pointed out that in its order passed on 09.12.2009, the BIFR followed the same procedure and recorded the gist of the meetings of each and every previous proceeding relevant for the purpose of coming to the final decision. It was submitted on behalf of the TSL that effective arguments were heard by the BIFR only on 24.11.2009 and 30.11.2009. On these two dates the coram comprised of Mr. K Cherian Verghese, Chairman and V K Malhotra, Member which was the bench that passed the final order on 09.12.2009. Therefore, it cannot be said that the matter was disposed of by a bench which did not hear the arguments. It was further contended that in any case none of the appellants had objected to the proceedings before the BIFR on this ground, therefore, they are prohibited from assailing the impugned order of the BIFR in the appeals filed before the AAIFR. Reliance was also placed on section 10 of the SICA, which stipulated that the proceedings of the board were not to be questioned merely on the ground of any defect in its constitution or in the constitution of the AAIFR. It was accordingly contended by the TSL that the proceedings before the BIFR were valid and the order passed by the bench consisting of the K. Cherian Verghese, chairman and Mr. VK Malhotra, Member was perfectly in order.
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On this argument, the majority of the AAIFR pronounced as follows:
''(i) A question has been raised about the judicial propriety of the bench which has delivered the impugned order as this Bench was different from the Bench which heard the final arguments on 12.11.2009. We are inclined to agree with the arguments that the BIFR records the summary of proceedings of the previous hearings in the proceedings of the subsequent hearings and, therefore, there is always...
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