Eastern Coalfields Limited v. State Of Bihar — 1999 DIGILAW 902 (PAT)

Judgment A.K.Ganguly, J. 1. This Interlocutory Application, I.A. No. 10293 of 1999 has been filed in connection with the writ petition C.W.J.C. No. 2550 of 1999. 2. Eastern Coalfields Limited has filed this writ petition for quashing the order dated 26-2-1999 passed by the Certificate Officer (Mines), Dumka in Certificate Case No. 1 of 1998-99 and also for quashing the notice of Certificate Case No. 1 of 1998-99 as contained in Annexure-2 to the writ petition. 3. By an order date 9-4-1999 a learned Judge of this Court while hearing I.A. No. 3392 of 1999, stayed the operation of the order dated 26-2-1999 passed in Certificate Case No. 1 of 98-99 subject to payment of 50% of the certificate dues within six weeks failing which the stay was directed to be vacated. 4. Then, by an order dated 27-7-1999, the writ petition was admitted and a further I.A., being I.A. No. 9516 of 1999, filed by the petitioner, was directed to be listed on the next date. 5. Then on the next date that I.A. was listed and on the prayer of the writ petitioner one months time was extended to pay 50% of the certificate dues. Thus, time to pay the amount was extended till 25th August, 1999. 6. Thereafter, the present I.A. was filed raising totally new contentions in view of the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called the said Act). On 24-8-1999, an order of stay was granted on the present I.A. restraining the respondents from taking any coercive steps for realising 50% of the certificate dues till 2-9-1999. Then, the matter was heard again on 31-8-1999 and the stay order was extended. 7. The question raised in the I.A. is over the application of Sec. 22 of the said Act to the facts of the present case. So for a proper appreciation of the issues, provisions of Sec. 22 (1) of the said Act are set out below. Then, the matter was heard again on 31-8-1999 and the stay order was extended. 7. The question raised in the I.A. is over the application of Sec. 22 of the said Act to the facts of the present case. So for a proper appreciation of the issues, provisions of Sec. 22 (1) of the said Act are set out below. 22(1) Where in respect of an industrial company, an inquiry under Sec. 16 is pending or any scheme referred to under Sec. 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Sec. 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and Articles of Association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress of the like against any of the properties of the industrial company or for the appointment of a Receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority. 8. A perusal of the aforesaid provision makes it clear that if in respect an industrial company an inquiry under Sec. 16 of the Act is pending (in this case, we are not concerned with any other situation mentioned in the said section) in that case, notwithstanding anything contained in the Companies Act or any other law or memorandum of Articles of Association of the Industrial Company or any other instrument having effect under the said Act or other law, no proceeding for execution, distress on the like against any of the properties of the Industrial Company (here we are concerned with a certificate proceeding) shall lie or be proceeded with further except with the consent of the Board. 9. 9. In the instant case, the proceeding which is pending against the petitioner-Company is a certificate proceeding under the Bihar & Orissa Public Demands Recovery Act in which an order has been passed on 26-2-1999 for payment of an amount of Rs. 10,94,30,674.00by the petitioner-Company. When the writ petition was filed against the said certificate proceeding on 16-3-1999, no case for invoking Sec. 22 of the said Act was made out. 10. The defence under the provisions of Sec. 2 of the said Act was raised for the first time by filing the aforesaid interlocutory application on 19-8-1999 which is decided by this order. 11. It has been stated in the said interlocutory petition that certain legal and factual aspects and the subsequent events could not be brought to the notice of the Court previously and it has been stated that the petitioner-Company was served with a notice from the office of the Registrar, B.I.F.R. about its appeal before the Secretary, B.I.F.R. and from the said communication, it appears that the said appeal has been fixed for hearing on 4-8-1999 in the chambers of the Secretary, B.I.F.R. and the petitioner-Company was directed to attend the said hearing of the appeal. Alongwith the said interlocutory application, an order dated 17-7-1999 was also enclosed issued by the Certificate Officer Mines, Dumka addressed to the Branch Manager, State Bank of India, Rajmahal Coal Mines Project, Urja Nagar, Mahgama, District Godda purporting to attach the Bank account of the petitioner-Company, being Account No. 50006, in view of the fact that the petitioner-Company has failed to satisfy the dues in certificate case No. 1 of 1998-99 for Rs. 10,94,30,674.00 . 12. Relying on the said communication from the office of the Secretary B.I.F.R., learned Counsel for the petitioner-Company asserted that since an inquiry under Sec. 16 of the said Act is pending, the provisions f Sec. 22 of the said Act are attracted and as such there should be stay of the certificate proceeding in view of the mandatory provisions contained in Sec. 22 of the said Act. 13. In support of the said claim, learned Counsel urged that on 14-6-1999 a reference was made under Sec. 16(1) of the said Act to B.I.F.R. but the Registrar of the B.I.F.R. vide its order dated 22-6-1999 refused to register the same. 13. In support of the said claim, learned Counsel urged that on 14-6-1999 a reference was made under Sec. 16(1) of the said Act to B.I.F.R. but the Registrar of the B.I.F.R. vide its order dated 22-6-1999 refused to register the same. Against the said order of the Registrar, an appeal being Appeal No. 22 of 1999 was filed by the petitioner-Company on 21-7-1999 before the Secretary B.I.F.R. under Regulation 19(8) (1) of the Board for Industrial and Financial Reconstruction Regulation, 1987 (hereinafter called the said Regulation). In connection with the said appeal, the notice of appeal was sent from the office of the Registrar, B.I.F.R. on 21-7-1999 and the said notice was received by the petitioner-Company on 29-7-1999. As such learned Counsel for the petitioner-Company submitted that the aforesaid fact could not be brought to the notice of this Court earlier. It was further submitted that in the background of these facts the petitioner-Company is invoking the provisions of Sec. 22 of the said Act. 14. In the course of hearing of this matter this, Court directed the petitioner-Company to disclose on affidavit, the subsequent proceeding, if any, before the Secretary, B.I.F.R Pursuant to such direction an affidavit was filed. From the said affidavit, it appears that the matter was heard before the Secretary, B.I.F.R. on 4-8-1999 at length and necessary documents were filed by the petitioner-Company. It was also disclosed that at the time of hearing, it was enquired by the Secretary B.I.F.R. about the annual audit and accounts of the petitioner-Company pertaining to the year 1998-99 and the petitioner-Company took a stand that the same will be made available to the appellate authority by 30-9-1999. 15. On these facts, it has been urged on behalf of the petitioner-Company that an inquiry within the meaning of Sec. 16 of the said Act is pending before the Secretary B.I.F.R. and as such the petitioner-Company is entitled to invoke the provisions of Sec. 22(1) of the said Act and get the protection given thereunder. 16. Learned Counsel for the respondents, on the other hand, contended that since the Registrar has refused to register the reference under Sec. 15 of the said Act, no inquiry within the meaning of Sec. 16 of the said Act can be said to be pending and the petitioner-Company cannot take the advantage of the provisions of Sec. 22 of the said Act. Apart from that learned Counsel further urged that ho appeal is pending under Sec. 25 of the said Act. As such according to him neither any inquiry under Sec. 16 nor any appeal under Sec. 25 of the said Act is pending. Therefore, the conditions precedent for application of Sec. 22 of the said Act being absent, the instant I.A. filed by the petitioner-Company is merely a time saving device and has not been filed bona fide and, therefore, should be dismissed. 17. Learned Counsel for the petitioner-Company has also fairly conceded that in the instant case, no appeal under Sec. 25 of the said Act is pending but he contended that what is pending is an appeal under Regulation 19(8) (1) of the said Regulation. Therefore, the inquiry under Sec. 16 of the said Act is pending and the petitioner-Company is entitled to invoke the provisions of Sec. 22 of the said Act. 18. Therefore, the issue before this Court is whether in the facts of this case noted above, the petitioner-Company is entitled to invoke the provisions of Sec. 22 of the said Act. 19. In order to properly appreciate the scope of an inquiry under Sec. 16 of the said Act vis-a-vis a reference under Sec. 15 of the said Act, this Court has to consider the provisions of both Secs. 15 and 16 of the said Act. On a conjoint reading of both the sections, it appears that Sec. 15 of the said Act casts a duty on the Board of the Directors of a sick industrial undertaking to make a reference with the Board for determination of the measures which may be adopted with respect to such a Company. It is clear from Sec. 15 that the same is a measure to prevent a Sick Industrial Company from becoming further sick and to prevent its further sickness a reference be made to the Board whereupon under Sec. 16 of the said Act, the Board shall make such inquiry as it may deem fit for determining whether the Industrial Company has become a sick Industrial Company or not. The Board may come to such determination upon receipt of reference with respect to such Company under Sec. 15 of the said Act or upon information received about such Company or upon its own knowledge as to the financial condition of the said Company. The Board may come to such determination upon receipt of reference with respect to such Company under Sec. 15 of the said Act or upon information received about such Company or upon its own knowledge as to the financial condition of the said Company. Under Sub-sections (2) and (3) of Sec. 16, the Board has been authorised to take such expeditious steps for disposal of an inquiry whether the Company has become a Sick Industrial company and for the purpose of making such inquiry the Board may, by order, require any operating agency to inquiry into it and make a report about the sickness of the Company. In this connection, the explanation given to Sub-sec. (3) of Section 16 of the said Act has some reliance. Such explanation by a deeming clause provides that an inquiry shall be deemed to have commenced upon receipt by the Board of any reference or opinion or upon its own knowledge reduced to writing by the Board. 20. Sec. 13 of the said Act empowers the Board and the appellate authority with the power to regulate its business. Under the provisions of the Sec. 13 of the said Act, the aforesaid regulations have been framed. The said Regulation makes detailed provision for regulating the functioning of the Board and the appellate authority. 21. In this case, we are concerned with Regulation 19 of the said regulations which have been framed under Sec. 13 of the said Act. The said Regulation is set out in extenso: 19.(1) Every reference to the Board under Sub-sec. (1) of Sec. 15 shall be made- (i) in Form A in respect of an industrial company other than a Government Company; (ii) in Form AA in respect of a Government Company. (2) Every reference to the Board under Sub-sec. (2) of Sec. 15 shall be made-7 (i) in Form B in respect of an industrial company other than a Government Company; (ii) in Form BB in respect of a Government company. (3) A reference may be filed, either by delivering it at the office of the Board or by sending it by registered post. (4) On receipt of a reference in the office of the Board, the date on which it is filed or received in the office of the Board along with the endorsement received subject to verification that the reference is in order shall be stamped. (4) On receipt of a reference in the office of the Board, the date on which it is filed or received in the office of the Board along with the endorsement received subject to verification that the reference is in order shall be stamped. (5) If on scrutiny, the reference is found to be in order, it shall be registered, assigned a serial number and submitted to the Chairman or assigning it to a Bench. Simultaneously, remaining information/documents required, if any, shall be called for from the informant (6). If on scrutiny, the reference is not found to be in order, the Secretary or, as the case may be, the Registrar may, by order, decline to register the reference and shall communicate the same to the informant. (7) A reference declined to be registered shall be deemed not to have been made. (8) (1) An appeal against the order of the Registrar declining to register a reference shall be made by the aggrieved person to the Secretary within fifteen days of communication to him of such an order. (2) An appeal against the order of the Secretary declining to register a reference shall be made by the aggrieved person to the Chairman within fifteen days of communication to him of such an order and the Chairmans decision thereon shall be final. 22. On a proper interpretation of Regulation 19, it appears that it is divided into three parts. Regulation 19(1) to 19(5) deal with how a reference under Sec. 15 of the said Act is to be made, filed received, registered and scrutinised. Regulation 19 (6) and 19(7) deal with the situation where the Secretary or the Registrar of the Board may decline to register such a reference and the consequences of non-registration. 23. Regulation 19(8) (1) of the said regulations provides for the appeal against an order of the Registrar declining to register the reference. Such appeal has to be filed by the aggrieved party to the Secretary within 15 days of the communication of the order and Regulation 19(8) (2) provides for right of appeal to the Chairman if the Secretary B.I.F.R. declines to register a reference, similarly within 15 days of the order of the Secretary and the Chairmans decision has been given a statutory finality. 24. 24. Learned Counsel for the respondents has very strongly relied on Regulation 19(7) of the said Regulations to contend that since in the instant case a reference has been declined to be registered by the Registrar it shall be deemed not to have been made. But, this Court on a harmonious construction of the different sub-regulations of Regulation 19 cannot accept the aforesaid contention. It has not been stated in sub-regulation (7) of Regulation 19 that a reference declined to be registered by the Registrar can be construed that the reference shall be deemed not to have been made. If that was provided then the submission of the learned Counsel for the respondents could have been accepted. But here the language in the statutory regulation is that a reference declined to be registered shall be deemed not to have been made. By necessary implication it would mean a reference finally declined to be registered shall be deemed not to have been made. 25. This Court has to construe as such in view of the specific right of appeal given to a person who is aggrieved either by the order of the Registrar or by the order of the Secretary to register a reference. Therefore, a reference declined to be registered either by the Registrar or by the Secretary can be directed to be registered, on appeal either by the Secretary or by the Chairman as the case may be. So unless the entire gamut or the appeal provisions under Regulation 19(8)(1) and 19 (8) (2) are over, it cannot be said that the registration of the reference has been declined. 26. A right of appeal has always been construed as the creature of statute. But, when the right of appeal is conferred on a litigant by the Statute, the same right is a vested and a substantive right. Since in the instant case a distinct right of appeal has been conferred under Regulation 19(8) (1) and 19(8)(2) to a person who is aggrieved by the decision of the lower authority to register a reference, the said right of appeal must be considered to be a right vested in the person aggrieved when he files the reference and such a right is in continuation of the right to file a reference under Sec. 15 of the said Act. 27. 27. Reference in this connection may be made to the Constitution Bench judgment of the Supreme Court in the case of Garikapati Veeraya V/s.N. Subbiah Choudhary and Ors. . In the said judgment, Chief Justice S.R. Das, speaking for the Constitution Bench, while delivering the majority judgment, has been pleased to hold as follows in paragraph 23 at page 553 of the said report: (i) That the legal pursuit of a remedy, suit appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of the procedure but is a substantive right. 28. Following the aforesaid principle, this Court has to interpret the provisions of the different sub-regulations of Regulation 19 harmoniously. On such harmonious construction, this Court hold that the registration of reference can be said to be declined only when the order of the Registrar declining reference, if appealed against, is affirmed by the appellate authority and not before that. If this Court holds to the contrary that a reference which is declined to be registered by the Registrar is the last word on the subject in that case the provisions of Regulation 19(8)(1) and 19(8) (2) become otiose and redundant. But, the appeal provision as pointed out above must be treated to be a continuation of original proceeding to register a reference. So on the principle of harmonious construction of the various clauses of Regulation 19, this Court holds that the pending appeal under Regulation 19(8) (1) or 19 (8) (2) a reference, even, if it is declined to be registered by the Registrar, shall be deemed to be a pending reference. Any other construction would render the provisions of Regulation 19 (8) (1) and 19 (8)(2) of the Regulation redundant. It is one of the cardinal principles of statutory construction that no provision of a statutory instrument should be so interpreted so as to render it a surplusage or a redundance. 29. Reference in this connection may be made to the judgment of the apex Court in the case of Hameedia Hardware Stores V/s.B. Mohan Lal Sowear reported in --. In paragraph 10, page 1067 of the report the following pertinent observations have been made. 29. Reference in this connection may be made to the judgment of the apex Court in the case of Hameedia Hardware Stores V/s.B. Mohan Lal Sowear reported in --. In paragraph 10, page 1067 of the report the following pertinent observations have been made. Having regard to the context in which a provision appears and the object of the statute in which the said provision is enacted, the Court should construe it in a harmonious way to make it meaningful. 30. This principle of harmonious construction is also extended in case of subordinate legislation. This is put beyond controversy by the apex Court in the case of J.K. Cotton Spinning and Weaving Mills Col. Ltd, V/s.State of Uttar Pradesh . At page 1174, para 7, the following observations have been made: In the interpretation of statutes, the Courts always presume that the Legislature inserted every part thereof for a purpose and the Legislative intention is that every part of the statute should have effect. These presumptions will have to be made in the case of rule-making authority also. 31. Learned Counsel for the petitioner-Company has relied on the decision of the Supreme Court in the case of Maharashtra Tubes Limited V/s.State Industrial & Investment Corporation of Maharashtra Limited and Anr. reported in --. Learned Counsel relied on paragraph 6 of the said judgment in order to highlight the intention of the said Act as is manifested in its preamble. Relying on the principles laid down in paragraph 6 of the judgment, learned Counsel argued that the purpose of the Act is a timely detection of sick or potentially sick companies owning industrial undertakings, the identification of the nature of sickness through experts in relevant fields with a view to devising suitable remedial measures through appropriate schemes and their expeditious implementation. Learned Counsel further submitted that here the emphasis under the said Act is to prevent sickness and in cases of sick undertaking to prepare schemes for their rehabilitation by providing financial assistance by way of loans, advances or guarantees or by providing reliefs, etc. The basic idea behind the said scheme is to revive sick units and it is for this reason Sec. 22 has been engrafted. The basic idea behind the said scheme is to revive sick units and it is for this reason Sec. 22 has been engrafted. Here I may quote the language of the apex Court: Sec. 2(1) provides that during the pendency of (i) an inquiry under Section 16 or (ii) preparation or consideration of a scheme under Sec. 17 or (iii) an appeal under Sec. 25, no proceedings for winding up of the concerned industrial company or for execution, distress or like shall lie or be proceeded with in relation to the properties of that concern unless B.I.F.R. / appellate authority has consented thereto. 32. The learned Judge of the Supreme Court further explained the purpose of Sec. 22 of the said Act in the following words: The underlying idea is that every such action should be frozen unless expressly permitted by the specified authority until the investigation for the revival of the industrial undertaking is finally determined. It is thus crystal clear that the main thrust of this special legislation is at revival or rehabilitation of the sick industrial undertaking and it is only when it is realised that the same is not feasible that the option of winding up of the unit can be resorted to. 33. Apart from highlighting the basic legislative intent of the said Act the apex Court in Maharashtra Tubes Limited (supra), also made it clear that the provision of Sec. 22 (1) of the 1985 Act should receive a wide construction and further held that the expression "proceedings" in Sec. 22(1) of the said Act should not be limited to legal proceedings as understood in a narrow sense. (Paragraph 12 of the judgment). 34. Learned Counsel for the petitioner-Company has also relied on a judgment of the Supreme Court in the case of Real Value Appliances Limited V/s.Canara Bank and Ors. . In the said case of Real Value Appliances (supra) the provisions of Secs. 15, 16 and 22 of the said Act came up for consideration. Learned Counsel for both the parties relied on the said judgment. 35. . In the said case of Real Value Appliances (supra) the provisions of Secs. 15, 16 and 22 of the said Act came up for consideration. Learned Counsel for both the parties relied on the said judgment. 35. Learned Counsel for the petitioner-Company submitted by referring to paragraph 31 of the said judgment that after the B.I.F.R. proceedings reached the stage of second part of Regulation 19 (5) on 24-7-1997, the Division Bench of Bombay High Court on 28-7-1997 passed an order, in an interlocutory appeal, appointing Receiver to take formal possession of the mortgaged properties of the Company and and on 8-8-1997 another Division Bench of Bombay High Court in Appeal No. 1193 of 1996 affirmed the order of the learned Single Judge appointing a provisional liquidator. 36. Learned Counsel submitted that since those two orders were passed by Bombay High Court after the order date 24-7-1997 was passed in the B.I.F.R. proceeding, the Hon ble Supreme Court quashed those two orders of Bombay High Court as being in violation of the provisions of Sec. 22 of the said Act. Learned Counsel submitted that from the aforesaid chain of facts, it is clear that when reference is at the stage of registration as in the case of Real Value Appliances (supra), the inquiry under Sec. 16 of the said Act must be deemed to be pending and it is on that basis that the High Courts orders were quashed by the Hon ble Supreme Court. Taking the cue from the said judgment, learned Counsel submitted that in the instant case also, the inquiry under Sec. 16 must be deemed to be pending inasmuch as having regard to the right of appeal which was given to the person aggrieved and which has been exercised in this case, it cannot be said that the reference under Sec. 15 of the said Act has been finally declined. Therefore, at this stage Sec. 22 of the sad Act can be invoked. 37. Learned Counsel for the respondents, on the other hand, very forcefully contended that since the reference of the petitioner-Company has not been registered by the Registrar, it cannot be said that the inquiry contemplated under Sec. 16 of the said Act has commenced. Therefore, at this stage Sec. 22 of the sad Act can be invoked. 37. Learned Counsel for the respondents, on the other hand, very forcefully contended that since the reference of the petitioner-Company has not been registered by the Registrar, it cannot be said that the inquiry contemplated under Sec. 16 of the said Act has commenced. In other words, learned Counsel argued that since the reference has been rejected by the Registrar, that is the end of the matter and in view of Regulation 19(7) of the said regulations, it must be treated to have come to an end. Therefore, this Court must hold that the conditions precedent for invoking the provisions of Sec. 22 of the said Act are not present. 38. This Court is unable to accept this contention in view of the fact that it has already held that regulation 19(7) of the said regulations cannot be interpreted in the manner suggested by the learned Counsel for the respondents inasmuch as the said interpretation will render the provisions of Regulations 19 (8) (1) and 19 (8) (2) completely redundant and the substantive right of appeal given to the aggrieved person will be rendered nugatory. This Court has already pointed out that the right of appeal being a substantive right and the appeal being considered as a contention of the proceeding, such construction will be against the basic and cardinal principles of the construction of Statute. 39. Apart from that in the decision in Real Value Appliances Limited (supra) similar contentions, which have been raised by the learned Counsel for the respondents here, have been noted and expressly negatived in paragraph 23 thereof. This Court excerpts below the aforesaid portion from paragraph 23 of the judgment: Relying on the use of the word "may" in Sec. 16(1) of the Act, it has been contended in some High Courts that the word "may" in that section shows that the B.I.F.R. has power to reject a reference summarily without going into merits and that it is only when the B.I.F.R. takes up the reference for consideration on merits under Sec. 16 (1) that it can be said that the "inquiry" as contemplated by the section has commenced. It is argued that if the reference before the B.I.F.R. is only at the stage of registration under Sec. 15, then Sec. 22 is not attracted. It is argued that if the reference before the B.I.F.R. is only at the stage of registration under Sec. 15, then Sec. 22 is not attracted. This contention, in our opinion, has no merit. (emphasis added) 40 Learned Counsel for the respondents, however, urged this Court that in the last three lines of the said paragraph a different conclusion has been reached by the Supreme Court and in support of the said contention reliance was placed on the following observation of the Supreme Court which I quote below: that the inquiry must be treated as having commenced as soon as the registration of the reference is completed after scrutiny and that from that time, action against the Companys assets must remain stayed as stated in Sec. 22 till final decisions are taken by the B.I.F.R.. 41. Relying on the aforesaid observation, learned Counsel for the respondents submits that registration of reference in this case has been declined by the Registrar. As such it must be held that inquiry proceeding has not commenced and as such Sec. 22 of the said Act is not attracted. 42. But from the facts of this case, as noted above, it is clear that the registration has been declined at the level of the Registrar only but an appeal from the said order of the Registrar under the statutory regulation is pending before the Secretary, B.I.F.R.. So the final decision of the B.I.F.R. as to the registration of the reference is pending. So at this stage, it cannot be held that the reference has been finally declined. That is what is meant by the learned Judges of the Supreme Court and this is amply made clear in the said paragraph in the following words: It is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the B.I.F.R. or in case the Companys assets are sold, or the Company wound up, it may indeed become difficult later to restore the status quo ante. (emphasis added) 43 Learned Counsel for the respondents has also relied on paragraph 30 of the sad judgment in order to contend that unless the reference is registered, no inquiry can be said to be pending under Sec. 16 of the said Act and the provision of Sec. 22 of the Act cannot come into play. (emphasis added) 43 Learned Counsel for the respondents has also relied on paragraph 30 of the sad judgment in order to contend that unless the reference is registered, no inquiry can be said to be pending under Sec. 16 of the said Act and the provision of Sec. 22 of the Act cannot come into play. In the instant case, the question whether reference will be registered or not is pending consideration before the Secretary of the B.I.F.R. in a statutory appeal and, therefore, it cannot be said that a final stage has been reached declining the registration. In that view of the matter, this Court cannot accept the contention of the learned Counsel for the respondents that in the instant case, reference has been declined and nothing is pending within the meaning of Section 16 of the said Act. 44. Learned Counsel for the respondents has also relied on another judgment of the Supreme Court in the case of Deputy Commercial Taxes Officer V/s.Corromandal Pharmaceuticals and Ors. . Learned Counsel did not rely on the ratio of the judgment in the case of Corromandal Pharmaceuticals (supra) but relied on the opinion of Justice B. P. Jeevan Reddy (as His Lordship then was) on the provisions of the said Act. Learned Counsel relied on the opinion of the learned Judge where the learned Judge expressed his views that the said Act is out of the tune with the present economic policy pursued in this country. His Lordship was pleased to observe that even if the object of the Act is laudatory but it must be applied carefully and must not be utilised to give unfair advantage to breed dishonesty or encourage unfair practice. Even though the aforesaid opinion of the learned Judge of the Hon ble Supreme Court is entitled to highest respect but the said opinion, with utmost respect, does not form part of the ratio of the main judgment. The said judgment of the Hon ble Supreme Court in Corromandal Pharmaceuticals (supra) has subsequently been considered by the Supreme Court in the case of Tata Davy Limited etc. V/s.State of Orissa and Ors. . The said judgment of the Hon ble Supreme Court in Corromandal Pharmaceuticals (supra) has subsequently been considered by the Supreme Court in the case of Tata Davy Limited etc. V/s.State of Orissa and Ors. . Learned Judges of the Supreme Court in the case of Tata Davy Limited (supra) have distinguished the ratio of the Judgment in Corromandal Pharmaceuticals (supra) and held that in the case of Corromandal Pharmaceuticals (supra) the Court was concerned with such amounts like sales tax which the sick industrial company is unable to collect after the date of the sanctioned scheme. Since those amounts legitimately belonged to the Revenue, the same cannot be intended to be covered under Sec. 22 of the said Act. 45. In the instant case, there are fundamental factual differences from those which were prevalent in the case of Corromandal Pharmaceuticals (supra) and as such the ratio in the case of Corromandal Pharmaceuticals are not attracted to the facts of this case. 46. Therefore, this Court judging the case from all its angles, comes to the conclusion that the certificate proceedings in question being Certificate Case No. 1 of 98-99 should remain stayed as the conditions precedent for application of Sec. 22 of the said Act are present in this case. As the question of registration of reference is pending in statutory appeal before the Secretary, B.I.F.R. the inquiry in respect of the petitioner-Company under Sec. 16 of the said Act is pending. So the provision of Sec. 22 applies proprio vigore in the facts of this case. As such the certificate proceeding (being Certificate Case No. 1 of 1998-99) cannot proceed further except with the consent of the Board in the instant Case, This Court, however, makes it clear that if the reference is declined finally under the provisions of the said Act read with Regulation 19 of the Regulations, in that case the aforesaid Certificate proceeding pending against the petitioner-Company will proceed in accordance with law. 47. This LA. No. 10293 of 1999 is, therefore, allowed in the terms mentioned above. No. costs.