Sree Rayalaseema Paper Mills Ltd. , Hyd v. Appellate Authority for Industrial and financial Reconstruction, New Delhi
2000-03-16
I.VENKATANARAYANA
body2000
DigiLaw.ai
I. VENKATANARAYANA, J. ( 1 ) THIS writ petition has been filed seeking a writ of ccertiorari challenging the orders of the Appellate Authority for Industrial and Financial Reconstruction, New Delhi, dated 16-12-1999 admitting Appeal No. 166 of 1999 filed by respondent Nos. 3 to 15 herein and granting stay and the order dated 20-1-2000 rejecting the objections raised by the writ petitioner. ( 2 ) THE facts leading to the filing of the present writ petition are set out as hereunder: the writ petitioner is a company incorporated on 20-8-1974 in Kumool Town in Andhra Pradesh and the company did well till 1985 and on account of financial crunch it was closed down by the end of 1989 and the company was declared as a sick company by the Board for Industrial and Financial Reconstruction ( bifr for short) under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (Act 1 of 1986) (for short act 1 of 1986 ). BIFR appointed IDBI as the operating agency for the purpose of revival of the company. IDBI took steps for revival of the company through change of management. During 1994 the petitioner-company came forward with concrete proposals for take over and rehabilitation of the company and the petitioner-company deposited Rs. 8 crores as a sort of caution deposit along with take over bid. BIFR has sanctioned the scheme in favour of the writ petition-company on 7-8-1995. The petitioner-company took back all the workers into their respective jobs. The new promotees invested about Rs. 106 crores into the bank out of which Rs. 33 crores was paid to the financial institutions/ banks and about Rs. 45 crorers for renovation and additions in the plant and equipment and about Rs. 25 crores towards payment of pressing creditors, arrears of workers, statutory payments and pre-operative expenses. IDBI is an operating agency and other banks/institutions considered a modified rehabilitation package and recommended to BIFR by sanction of the modified scheme. The BIFR in its review meeting on 10-2-1999 directed the IDBI to convene a joint meeting of all the banks and financial institutions for the purpose of submitting revised proposals. Accordingly a modified scheme was submitted to BIFR by IDBI after all the banks and financial institutions unanimously supporting the same.
The BIFR in its review meeting on 10-2-1999 directed the IDBI to convene a joint meeting of all the banks and financial institutions for the purpose of submitting revised proposals. Accordingly a modified scheme was submitted to BIFR by IDBI after all the banks and financial institutions unanimously supporting the same. The BIFR during the hearing on 2nd August, 1999 sanctioned the modified scheme and issued certain directions for the purpose of implementing the modified scheme. BIFR dictated the directions in the open Court in the presence of all the financial institutions which agreed for implementing the modified scheme. As a consequence of the order of BIFR writ petitioner herein submitted a letter dated 3-8-1999 to respondents 3 to 15 to provide the required working capital and the 3rd respondent was requested to take intitiative as leader of the consortium for sanction of the working capital as directed by BIFR and submitted proposals for working capital facilities. In short, it was agreed that the financial institution will implement the modified scheme. Strangely the petitioner received a communication from the 1st respondent informing that Appeal No. 166 of 1999 was filed by respondents 3 to 15 against BIFR s order dated 2-8-1999 in Case No. 100 of 1999 and the Appellate Authority admitted the appeal on 16-12-1999 and stayed the directions in Paragraph 23 (j) of the order of BIFR till the disposal of the appeal. The writ petitioner appeared on 20-1-2000 before the Appellate Authority and contended that the appeal was liable to be dismissed in limini on the ground that the appeals was not filed within time. The limitation for filing the appeal is 45 days from the date of issue of the order and respondents 3 to 15 did not apply for the certified copy of the order and did not enclose the same along with the appeal and the appeal was filed on 4-11-1999, i. e. , after 95 days. It was also brought to the notice of the Appellate Authority that respondents 3 to 15 have mislead the Appellate Authority by a false statement that a copy of the proceedings dated 2-8-1999 was received by them on 21-9-1999 and the appeal was being field within 45 days from 21-9-1999 and therefore the appeal is within limitation time.
It was also brought to the notice of the Appellate Authority that respondents 3 to 15 have mislead the Appellate Authority by a false statement that a copy of the proceedings dated 2-8-1999 was received by them on 21-9-1999 and the appeal was being field within 45 days from 21-9-1999 and therefore the appeal is within limitation time. The writ petitioner contended before the Appellate Authority that respondents 3 to 15 did not apply for a certified copy of the order and that the order was received in the ordinary course on 21-9-1999 and the appeal was filed treating that copy as a certified copy. It is the case of the writ petitioner that for the purpose of getting a certified copy, respondents 3 to 15 ought to have made an application for a certified copy and after receiving the certified copy respondents 3 to 15 are entitled to file the appeal after deducting the time taken by the authorities in issuing the certified copy. The 1st respondent herein has rejected the objections by its order dated 20-1-2000 treating the copy served on respondents 3 to 15 as certified copy and has erroneously held that the appeal is within time. Assailing the order of the Appellate Authority in admitting the appeal and rejecting the objections and granting stay, the present writ petition has been filed. ( 3 ) SRI E. Manohar, learned senior Counsel appearing for the writ petitioner has contended that BIFR has passed the order in the presence of all the parties on 2-8-1999 and admittedly respondents 3 to 15 have not applied for the certified copy but filed the appeal on 4-11-1999. He placed reliance on Section 25 of Act 1 of 1986 read with the procedure for filing appeals before AAIFR which makes it very clear that certified copy of the order appealed against has to be filed along with the appeal. It is his contention that respondents 3 to 15 have presented the appeal along with the order copy received by them in the normal course and they have falsely represented to the Appellate Authority that the copy received by them is the certified copy and got the appeal registered as though the appeal was filed within time.
It is his contention that respondents 3 to 15 have presented the appeal along with the order copy received by them in the normal course and they have falsely represented to the Appellate Authority that the copy received by them is the certified copy and got the appeal registered as though the appeal was filed within time. ( 4 ) FOR proper appreciation of the issues involved in the writ petition, it would be appropriate to extract Section 25 of Act 1 of 1986 as well as the procedure for filing appeals before AAIFR which was issued in exercise of the powers conferred by subsection (1) of Section 13 of Act 1 of 1986, which are extracted as hereunder: "appeal:- 25 (1) Any person aggrieved by an order of the Board made under the Act may, within forty-five days from the date on which a copy of the order is issued to him, prefer an appeal to the Appellate Authority : provided that the Appellate Authority may entertain any appeal after the said period of forty-five days but not after sixty days from the date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. (2) On receipt of an appeal under subsection (1), the Appellate Authority may, after giving an opportunity to the appellant to be heard, if he so desires and after making such further inquiry as it deems fit, confirm, modify or set aside the order appealed against or remand the matter to the Board for fresh consideration". "22. Procedure for filing appeals before AAIFR - Modified with effect from 17th June, 1996: (Notification No. F/2/22/95. Admn.
"22. Procedure for filing appeals before AAIFR - Modified with effect from 17th June, 1996: (Notification No. F/2/22/95. Admn. , dated 3rd April, 1996 published in the Gazette of India, Extraordinary No. 22, dated 17-6-1996, Part III, Section 4): in exercise of the powers conferred by sub-section (1) of Section 13 of the Sick Industrial Companies (Special Provisions) Act, 1985 (Act 1 of 1986), and in supersession of Notification No. GSR7 (E), dated 28-12-1988, except as respect things done or omitted to be done, the Appellate Authority for Industrial and Financial Reconstruction prescribes the following procedure for filing appeals before the Appellate Authority:- (1) (a) An appeal against an order of the Board for Industrial and Financial Reconstruction under Section 25 of the Sick Industrial Companies (Special Provisions) Act, 1985, should be filed in form of memorandum of appeal signed by the appellant or his attorney and should be accompanied by the following:- (i) A certified copy of the order appealed against. (ii) True copies of all other documents relied upon by the appellant. (iii) An index of the documents. (iv) A list of all respondents including parties represented before the Board for Industrial and Financial Reconstruction. (v) An affidavit verifying the contents of the memorandum of appeal and the date of receipt by the appellant of certified copy of the order appealed against. (vi) Vakalatnama/power of attorney, where necessary. (vii) Where the appellant seeks condonation of delay in filing the appeal, a separate application, supported by an affidavit. (viii) Ten extra copies of the memorandum of appeal together with accompanying documents referred to at (i) to (vi) above. (b) The memorandum of appeal should be neatly and legibly typewritten, cyclostyled or printed on one side of foolscap size paper in double space and page numbered provided that true copies of documents prepared by any other mechanical or chemical process including photocopying may be filed or submitted. It should contain full statement of facts in numbered paragraphs and set forth concisely under distinct heads the grounds of appeal, which should be consecutively numbered. (2) All appeals should be either in English or Hindi. (3) All appeals should be presented at the office of the Appellate Authority at 10th Floor, Jeevan Prakash Building, 25, Kasturba Gandhi Marg, New Delhi-110 001.
(2) All appeals should be either in English or Hindi. (3) All appeals should be presented at the office of the Appellate Authority at 10th Floor, Jeevan Prakash Building, 25, Kasturba Gandhi Marg, New Delhi-110 001. (4) Appeals can be filed between 10 a. m. , to 4 p. m. , on all working days from Monday to Friday. ( 5 ) AFTER receipt of the appeal papers in the registry of the Appellate Authority, the same shall be scrutinised to ensure that the required formalities have been completed and all the required documents have been filed. In case some deficiencies are found to exist, the appellant shall be given an opportunity to remove the same within a period of seven days. ( 6 ) IF the appeal papers are found in order, after removal of deficiencies, if any, the same shall be submitted to the Secretary to the Appellate Authority, who may call for any additional information/ documents, including: (a) Copies of any orders of BIFR in the case, not already filed by appellant. (b) Copies of references in Forms a and aa prescribed under the BIFR Regulations, 1987, where the appellant is the Sick Industrial Company or its existing promoter. (c) Additional copies of memorandum of appeal and accompanying documents, having regard to number of respondents in the case. (d) Any other information/documents which may be considered necessary in the interest of expeditious listing of the appeal for hearing. ( 7 ) THE Secretary shall pass appropriate orders for registration of the appeal and for assigning it a serial number. The entire process of registration of an appeal shall ordinarily be completed within a period of two weeks from the date of filing of appeal. ( 8 ) AFTER registration, the Secretary shall submit the appeal papers to the Chairman/ Bench of the authority for direction as to listing the case for hearing/other directions. 2. The above procedure shall come into force with effect from the date of publication in the Official Gazette". 5.
( 8 ) AFTER registration, the Secretary shall submit the appeal papers to the Chairman/ Bench of the authority for direction as to listing the case for hearing/other directions. 2. The above procedure shall come into force with effect from the date of publication in the Official Gazette". 5. The learned Counsel for the writ petitioner has contended that Section 25 of Act 1 of 1986 read with the procedure, extracted above makes it mandatory on the part of the appellate to file the appeal along with certified copy of the order appealed against and the time granted for filing such appeal is 45 days from the date of receipt of the certified copy and the Appellate Authority has the power to condone delay if it is filed within sixty days. In short, the maximum period permissible for filing an appeal is sixty days. According to the learned Counsel, Section 5 of the Limitation Act has no application for the proceedings under Act 1 of 1986. 6. The learned Additional Advocate General appearing for the State-21st respondent has supported the case of the writ petitioner and contended that there was a detailed hearing on 2-8-1999 and there was an extensive discussion providing opportunity to all the parties including respondents 3 to 21 and the order was pronounced in open Court in the presence of all the parties including respondents 3 to 21. It is also contended that the respondents-banks have supported the modified scheme and given their consent thereto in the proceedings on 2-8-1999 before the 2nd respondent. It is his contention that the order was dictated in open Court in the presence of all the parties and hence limitation starts from 2-8-1999 as contemplated under Section 25 (1) of Act 1 of 1986. He further contended that the aggrieved parties have not taken any steps for obtaining certified copy of the order from BIFR and the appeal was filed defectively without enclosing certified copy of the order appealed against. He placed strong reliance on Section 22 of Act 1 of 1986 wherein procedure was prescribed for filing appeals before AAIFR which came into force with effect from 17-6-1986, the date on which the said notification was published in the Gazette of India. Hence it is his contention that the appeal filed by respondents 3 to 15 is barred by limitation.
Hence it is his contention that the appeal filed by respondents 3 to 15 is barred by limitation. The learned Additional Advocate General also placed before me a Press Note issued by the Appellate Authority dated 28-3-1990 under which it is made clear that the aggrieved party should specifically apply for a copy of the order intended to be appealed against immediately after the order is passed by the BIFR and not wait for its receipt in usual course through postal channels etc. It is relevant to extract the said Press Note which is as follows:"appellate Authority For Industrial and Financial Reconstruction, 10th Floor, Jeevan Prakash Building, 25, Kasturba Gandhi Marg, New Delhi. PRESS NOTE it has been observed by the Appellate Authority for Industrial and Financial Reconstruction that most of the parties aggrieved by the orders of the Board for Industrial and Financial Reconstruction (BIFR) and desirous of filing appeals, under Section 25 of SIC (Special Provisions) Act, 1985 have not been making specific efforts for obtaining copies of the relevant orders from BIFR. Whereas BIFR, on their own, also send a copy of their order in normal course through postal services, yet the parties intending to file the appeal should also make specific efforts for getting copies of the order. The procedure and fees for getting the copies have already been provided by the BIFR in their orders. It is desirable and in the interest of speedy justice and in keeping with the spirit of provisions regarding limitation incorporated in the Act that the aggrieved parties should take steps without delay for getting copies of the order and filing appeal, in case they intend to do so. It is, therefore, clarified that parties aggrieved by the order of the BIFR and intending to file an appeal to this authority, should specifically apply for a copy of the order intended to be appealed against, immediately after the order is passed by the BIFR and not wait for its receipt in usual course through postal channels etc. On receipt of the copy of the relevant order from BIFR the appeal should also be filed as early as possible.
On receipt of the copy of the relevant order from BIFR the appeal should also be filed as early as possible. Copies of the correspondence entered into with BIFR for obtaining a copy of BIFR s order should be attached along with the appeal to establish that there has been no lack of efforts on the part of the party in obtaining a copy of the order. The party should also furnish invariably with the appeal concrete evidence regarding the date of receipt of the order of BIFR s order e. g. , relevant document showing the date of receipt of the order appealed against. The Appellate Authority shall then be able to act more effectively and expeditiously in regard to the redressal of appellant s grievances. Sd/ -. . . . . . . . . Secretary, Appellate Authority, file No. AAIFR Rules/13 (1)789 dated 28-3-1990. "7. Based on the aforementioned Press Note, it is contended by the learned Counsel for the writ petitioner as well as the learned Additional Advocate-General that the aggrieved party must apply for a certified copy of the order intended to be appealed against immediately after the order is passed by the BIFR and not wait for its receipt in usual course through postal channels. 8. Sri K. Gopalakrishna Murthy, the learned Counsel appearing on behalf of respondents 3 to 15, has vehemently contended that copy of the order of the BIFR was in fact issued on 15-9-1999 and it was received by the respondents Counsel at Bombay on 21-9-1999 and the appeal was filed on 4-11-1999 i. e. , within 42 days from the date of receipt of the order and therefore, it is well within limitation period. It is the contention of the learned Counsel for respondents 3 to 15 that limitation runs from the date of receipt of the order and that the appeal was filed within 45 days from the date of receipt of the order and hence it is not barred by limitation. According to him the copy received by the bank on 15-9-1999 is itself sufficient for preferring the appeal and there is no need to separately apply for any certified copy.
According to him the copy received by the bank on 15-9-1999 is itself sufficient for preferring the appeal and there is no need to separately apply for any certified copy. ( 9 ) SRI V. Ramachandra Rao, the learned Counsel appearing on behalf of the 16th respondent Workers Union has vehemently contended that the respondent banks herein should alone be held responsible for non-implementing the modified scheme. It is his contention that the financial institutions are evading their responsibility in putting the company back on the rails. He further contended that the financial institutions are not implementing the objectives enshrined in the Sick Industrial Companies (Special Provisions) Act, 1985. He also brought to my notice that the new management has succeeded in investing huge amounts and thereby trying to put the sick companies back into the running condition. He vehemently pleaded that about 5000 workers are badly affected on account of the callous attitude exhibited by the financial institutions. Be that as it may, this Court is concerned with the issue whether respondents 3 to 15 have applied for certified copy of the order and whether the appeal was filed in time. ( 10 ) BASED on the aforementioned contentions, the short question that falls for consideration in this writ petition is whether respondents 3 to 15 have filed the appeal along with a certified copy of the order of the BIFR as contemplated under Section 25 (1) of Act 1 of 1986 read with the procedure prescribed for filing appeals before the AAIFR. ( 11 ) SUB-SECTION (1) of Section 25 of Act 1 of 1986 makes it clear that the appeal has to be filed within 45 days from the date on which a copy of the order is issued to him. In other words, the aggrieved party must file the appeal within 45 days from the date on which a copy of the order is supplied to the party concerned. The learned Counsel for respondents 3 to 15 placed strong reliance on the wording "copy of the order issued to him" employed in sub-section (1) of Section 25. He reiterated that the copy of the order issued to respondents is itself a certified copy and that there is no need to apply for any certified copy.
The learned Counsel for respondents 3 to 15 placed strong reliance on the wording "copy of the order issued to him" employed in sub-section (1) of Section 25. He reiterated that the copy of the order issued to respondents is itself a certified copy and that there is no need to apply for any certified copy. A reading of Section 25 read with the procedure for filing of appeals makes it clear that a certified copy of the order appealed against has to be filed along with the appeal and for the purpose of limitation the period of 45 days has to be calculated from the date of issuance of the certified copy of the order appealed against. Even the press note issued by the Appellate Authority also makes it very clear that the parties aggrieved by the order of the BIFR and intending to file an appeal should specifically apply for a copy of the order intended to be appealed against immediately after the order is passed by the BIFR and should not wait for its receipt in usual course through postal channels. Thus, Section 25 (1) read with the statutory procedure issued in exercise of the powers conferred by sub-section (1) of Section 13 and the Press Note issued by the Appellate Authority makes it clear that the aggrieved party has to apply for a certified copy immediately after the order is passed and on receipt of the certified copy he has to file the appeal within 45 days. Reliance was placed by the learned Counsel for the writ petitioner on the Division Bench judgment of the Delhi High Court reported in Girdharilal M. Pittle v. Authority For Industrial and Financial Reconstruction, AIR 1998 Del. 400 , wherein the Division Bench had an occasion to decide identical issue and it was held that the Court has to take strict view in the matter of condonation of delay. It was held in that case that where an appeal against order sanctioning rehabilitation scheme was filed beyond period of limitation of 45 days and the appellant failed to establish the reason stated by him that his request for grant of certified copy of impugned order was rejected and on the contrary the respondent placed documents on record showing that the appellant did not take any efforts to file appeal with expedition, the delay caused could not be condoned.
From the aforementioned judgment it is very clear that the aggrieved party has to apply for a certified copy of the order immediately after the pronouncement of the order and file the appeal strictly following the procedure prescribed for filing appeals. The contention of the learned Counsel for the respondents that there is no need to apply for a certified copy and that the copy of the order received in the normal course is itself a certified copy and that the period of limitation has to be calculated from the date of receipt of the copy of the order in the normal course cannot be accepted. For the proposition that the judgment becomes operative from the date of pronouncement in open Court, the learned Counsel for the petitioner has placed reliance on the judgment of this Court reported in P. Narasimha Murty v. G. Satyavathi, AIR 1976 AP 400 . A learned single Judge of this Court had an occasion to interpret Order 20, Rule 1 of the Code of Civil Procedure as to when judgment becomes operative in the above cited judgment. It was observed as follows: "under Order 20 Rule 1, the Court after the case has been heard shall pronounce judgment in open Court by dictation to Shorthand Writer, wherever it is permissible. It bears the date on which it is pronounced. The date of the judgment is never altered by the date on which the signature has been put subsequently. The date of the decree under Order 20, Rule 1 CPC would also be the date on which the judgment was pronounced. It is, therefore, clear that under the CPC stress is laid upon the pronouncement or delivery of the judgment as a judicial act which has got legal effect. " ( 12 ) THE contention of the learned Counsel for respondents 3 to 15 that limitation should be calculated from the date when the copy of the order is received by the respondents is unsustainable.
" ( 12 ) THE contention of the learned Counsel for respondents 3 to 15 that limitation should be calculated from the date when the copy of the order is received by the respondents is unsustainable. Viewed from any angle, I hold that the aggrieved party must apply for a certified copy of the order appealed against immediately after its pronouncement and after receipt of the certified copy he should file the appeal within 45 days as contemplated under Section 25 (1) of Act 1 of 1986 read with the procedure laid down in exercise of the powers conferred by sub-section (1) of Section 13 of Act 1 of 1986. The finding of the Appellate Authority that the procedure for applying for certified copy of BIFR s order is not relevant for the purpose of considering limitation under Section 25 (1) is erroneous and unsustainable. A procedure is prescribed in exercise of the powers conferred by sub-section (1) of Section 13 and the Appellate Authority has also issued Press Note that the aggrieved party shall apply for the copy of the order immediately after the order is passed by the BIFR. Having issued statutory instructions by the Appellate Authority, it is not open to the Appellate Authority to hold that applying for certified copy of the BIFR s order is not relevant for the purpose of considering the period of limitation under Section 25 (1) of Act of 1986. The order of the 1st respondent dated 16-12-1999 admitting the appeal and granting stay and the order dated 20-1-2000 rejecting the objection regarding limitation raised by the writ petitioner and holding that the appeal is filed within the period of limitation prescribed under Section 25 (1) of Act 1 of 1986 are unsustainable. ( 13 ) IN the result, I hold that the appeal filed by respondents 3 to 15 is barred by limitation and consequently there shall be a writ of certiorari quashing the orders dated 16-12-1999 and 20-1-2000 passed by the 1st respondent-Appellate Authority. The writ petition is accordingly allowed. There shall be no order as to costs.