J. CHALAMESWAR, J. ( 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:". . . . I am of the considered opinion that the procedure followed by the operating Agency is not in accordance with the Law. 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:". . . . I am of the considered opinion that the procedure followed by the operating Agency is not in accordance with the Law. Unfortunately, the appellate authority had not taken cognizance of this matter as it was only observed that the, unit has been laying closed since 1-4-1993 and the appellant and existing promoter have shown their inability to work out an acceptable or feasible proposal for rehabilitation. This finding that the company was unable to bring up a feasible proposal is vitiated by the fact that it was based on a procedure contrary to the provisions of Sec. 18. It is for the Operating Agency to give a scheme and thereafter find out whether the company is able to bring any proposal which fits the scheme. Since this procedure is not followed the findings based on the converse procedure that the company has to bring a scheme for the Operating agency to accept is contrary to law and it cannot be sustained. I, therefore, deem it fit to set aside the order of the appellate Authority and to remand the matter to BIFR which shall request the Operating Agency to first frame a scheme and then ask the company to bring up a proposal which confirms to it to find out whether it is acceptable for the rehabilitation of the company. " ( 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. ( 4 ) PURSUANT to the directions of this court, extracted above, the BIFR, second respondent herein, by its order dated 30-6-1999 in case No. 15 of 1993 once again held that it is just and equitable and in the public interest, the petitioner-Company should be wound up. ( 5 ) AGGRIEVED by the said decision of the second respondent, preferred an appeal no. ( 5 ) AGGRIEVED by the said decision of the second respondent, preferred an appeal no. 155 of 1999 before the appellate authority. The appellate authority by its order dated 10-1-2000 dismissed the appeal. ( 6 ) AS a consequence to the decision of the second respondent dated 30-6-1. 999, a communication was sent to the registry of this Court by the Second respondent for taking appropriate action as required under the provisions of the Act. Therefore, the matter came to be registered as RCC No. ll of 1999. ( 7 ) IT is to be mentioned for the sake of record that by strange process, another communication from the second respondent was received by the Registry of this Court dated 16-2-2000 on 28-2-2000, which reads as follows:"i am directed to refer to your letter no. W. P. No. 1636 of 2000 dated 7-2-2000 on the above subject and to forward herewith certified copies of the Board s proceedings dated 19-4-1993, 22-11-1993, 15-2-1994 and winding up order dated 29-4-1994 passed by Bench-II of BIFR along with the copy of our earlier letter dated 4-5-1994 for necessary action. ( 8 ) OBVIOUSLY the Registry of the second respondent lost track of the earlier litigation and as a consequence of the said communication, another case in RCC No,4 of 2000 came to be registered by this Court under Section 20 of the Act. In fact, RCC 4 of 2000 cannot be continued, as the order of the second respondent, on the basis of which, the said RCC is registered merged in the order of the appellate authority dated 31-1-1996 which was set aside by this Court in Writ Petition No. 4182 of 1996. Hence rcc No. 4 of 2000 is closed. ( 9 ) COUNTER-AFFIDAVIT is filed by respondenlno. 3. W. P. M. P. No. 7896 of 2000 is filed by the State Bank of India with a prayer to implead the bank as party-respondent to the writ petition. The Bank claims to be the secured creditor of the petitioner-Company and therefore, interested in the present writ petition. Accordingly, the WPMP is ordered. ( 10 ) THE learned Counsel for the petitioner objected and questioned the locus standi of the implead petitioner. The Bank claims to be the secured creditor of the petitioner-Company and therefore, interested in the present writ petition. Accordingly, the WPMP is ordered. ( 10 ) THE learned Counsel for the petitioner objected and questioned the locus standi of the implead petitioner. On the merits of the case, the learned Counsel for the petitioner submitted that this Court in the earlier order in W. P. No. 4183 of 1996, dated 16-7-1996 held that the second respondent violated the procedure contemplated under the Act, inasmuch as, the second respondent did not follow the procedure contemplated under Section 18 of the Act. Therefore, the order of the second respondent dated 30-6-1999 as confirmed by the first respondent by its order dated 10-1-2000 is wholly illegal and is required to be declared as such. ( 11 ) BEFORE considering the merits of this case, briefly the scheme of the Sick industrial Companies (Special Provisions) act, 1985 is required to be examined. As can be seen from the preamble of the said Act, the Act was made with a view to secure the timely detection of sick and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies. The expression "sick industrial company" is defined under Section 2 (o) of the Act. Section 15 of the Act mandates that when ever an industrial company becomes a sick industrial company, the Board of Directors of such company are required to make a reference to the "board" constituted under section of the Act within sixty days of the date of finalisation of the duly audited accounts of the company or within sixty days of forming such opinion that the company has become a sick industrial company. Apart from the statutory obligation cast on the Board of Directors of the Sick Industrial Company to make a reference under Section 15 of the Act, subsection (2) of Section 15 authorises the bodies indicated therein, that is, government of India, State Government or any financial institution which had rendered financial assistance to sick industrial company to make such a reference to the Board. On receipt of the said reference, the Board is required to make an enquiry as it deem fit and proper to determine whether the industrial company has in fact become a sick industrial company within the expression assigned under the Act. Alternatively the board is also authorised under subsection (2), to require an operating agency an expression defined under Section 3 (1) of the Act to make such enquiry contemplated under Section 16 of the Act. On the conclusion of the enquiry contemplated under Section 16 of the Act, if the Board comes to the conclusion that the industrial company has be come a sick industrial company, the Board is required to make a further decision as to whether it is practicable for the company to make its net worth exceed accumulated losses within reasonable time. ( 12 ) IF the Board comes to the conclusion that it is practicable for the industrial sick company to make net worth exceed the accumulated loss within reasonable time, the Board may direct the company to make its networth positive within stipulated time. On the other hand if the Board comes to the conclusion that it is not practicable for the company to make its net worth exceed accumulated losses within a reasonable time, two courses are open to the Board; the board may decide to adopt the procedure contemplated under Section 18 of the Act or take a decision under Section 20 of the Act, that the Company be wound up. ( 13 ) IN the context of the facts of the present case, Sections 17 and 20 of the Act are relevant and, therefore language of these sections require detailed examination. ( 14 ) SECTIONS 17 and 20 of the Act read as follows: "section 17: Powers of Board to make suitable order on the completion of inquiry:- (1) If after making an inquiry under section 16, the Board is satisfied that a company has become a sick industrial company, the Board shall, after considering all the relevant facts and circumstances of the case, decide, as soon as may be by order in writing, whether it is practicable for the company to (make its networth exceed the accumulated losses) within a reasonable time. (2) If the Board decides under subsection (1) that it is practicable for a sick industrial company to (make its networth exceed the accumulated losses) within a reasonable time, the board shall, by order in writing and subject to such restrictions or conditions as may be specified in the order, give such time to the company as it may deem fit to (make its networth exceed the accumulated losses ). (3) If the Board decides under subsection (1) that it is not practicable for a sick industrial company to (make its networth exceed accumulated losses) within a reasonable time and that it is necessary or expedient in the public interest to adopt all or any of the measures specified in Section 18 in relation to the said company it may, as soon as may be, by order in writing, direct any operating agency specified in the order to prepare, having regard to such guidelines as may be specified in the order, a scheme providing for such measures in relation to such company. (4) The Board may- (a) if any of the restrictions or conditions specified in an order made under sub-section (2) are not complied with by the company concerned (or if the company fails to revive in pursuance of the said order), review such order on a reference in that behalf from any agency referred to in sub-sec. (2) of section 15 or on its own motion and pass a fresh order in respect of such company under sub-sec. (3); (b) if the operating agency specified in an order made under sub-sec. (3) makes a submission in that behalf, review such order and modify the order in such manner as it may deem appropriate. (2) of section 15 or on its own motion and pass a fresh order in respect of such company under sub-sec. (3); (b) if the operating agency specified in an order made under sub-sec. (3) makes a submission in that behalf, review such order and modify the order in such manner as it may deem appropriate. "section 20: Winding-up of sick industrial company:- ( (1) Where the Board, after making inquiry under Section 16 and after consideration of all the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of opinion that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up, it may record and forward its opinion to the concerned High Court.) (2) The High Court shall, on the basis of the opinion of the Board, order winding-up of the sick industrial company and may proceed and cause to proceed with the winding up of the sick industrial company in accordance with the provisions of the Companies act, 1956 (1 of 1956) (3) For the purpose of winding-up of the sick industrial company, the High court may appoint any officer of the operating agency, if the operating agency gives its consent, as the liquidator of the sick industrial company and the officer so appointed shall for the purpose of winding up of the sick industrial company be deemed to be, and have all the powers of, the official liquidator under the companies Act, 1956 (1 of 1956 ). (4) Notwithstanding anything contained in sub-section (2) or subsection (3), the Board may cause to be sold the assets of the sick industrial company in such manner as it may deem fit and forward the sale proceeds to the High Court for orders for distribution in accordance with the provisions of Section 529-A, and other provisions of the Companies Act, 1956 (1 of 1956 ). " ( 15 ) SUB-SECTION (1) of Section 17 requires the Board to take a decision that once it found a particular industrial company is a sick industrial company, whether it is practicable for that company to make its net worth exceed the accumulated loss within a reasonable time. For reaching such conclusion, Section 17 of the Act mandates the Board to take into consideration all the relevant facts and circumstances of the case . What exactly would be the relevant facts and circumstances of the case will be examined later. Once such a decision is reached or taken, that it is not practicable for the sick industrial company to make net worth exceed accumulated loss within the reasonable time, the Board is still under obligation under sub-section (3) of section 17 of the Act to take further a decision that it is necessary or expedient in the public interest to adopt all or any of the measures specified in Section 18 . If the board comes to the conclusion that it is necessary to take the measures contemplated under Section 18, then the steps required to be taken are stipulated in other provisions of the Act. If the Board comes to the conclusion that it is not either necessary or expedient in the public interest to adopt all or any of the measures specified in Section 18, then course open to the Board is indicated in Section 20 of the Act. ( 16 ) AN examination of language of section 20 of the Act indicates that before resorting the procedure contemplated under Section 20 of the Act, the Board is required to come to the conclusion that the sick industrial company is not likely to make its net worth exceed the loss accumulated within reasonable time while meeting all its financial obligations. ( 17 ) IN my considered view, variation of language of Sections 17 (1) and (3) and 20 of the Act has significance. ( 18 ) TO reach a conclusion under section 17 (1) of the Act, whether it is practicable for the company to make its networth exceed the accumulated losses within a reasonable time or not, the Board is required to take all the "relevant facts and circumstances of the case". ( 18 ) TO reach a conclusion under section 17 (1) of the Act, whether it is practicable for the company to make its networth exceed the accumulated losses within a reasonable time or not, the Board is required to take all the "relevant facts and circumstances of the case". Such relevant facts and circumstances include the reason for the sickness of the company - it may be due to bad management, due to bad financial planning, due to the lack of the supply of raw material, due to the lack of market for the product etc. Once it is identified as to what exactly is the reason for the sickness of the company, then perhaps it is possible for the Board to reach a conclusion whether it would be practicable for the company to make its networth exceed the accumulated losses within a reasonable time. For reaching this conclusion, once again the Board has to necessarily take into consideration the various facts. To take an extreme example if the product of the company has no market at all or the product as such become an obsolete product that it would not be purchased by any consumer, any amount of planning and assistance to the company will not make the company to make its netwoth exceed the accumulated losses, for the simple reason, that the product cannot be sold. But in a given case, it is possible that the product has market, but the company became sick only because of bad financial planning; then there is a possibility of the company making its networth exceed the accumulated losses by carefully planning the future course of the business of the company. For arriving at such a conclusion, the Board must necessarily keep in mind the existence of financial obligations of the company. After taking into consideration all these relevant factors if the Board comes to the conclusion that it is not practicable for the sick industrial company to make its networth exceed the accumulated losses within a period of reasonable time, the Board is once again called upon to take a further decision whether it is necessary or expedient in the public interest to take some measure contemplated under the Act to sustain the company. Obviously, this decision can be taken only in the public interest i. e. , though it is not practicable or desirable to sustain the company any further on the basis of the commercial principles, the public interest is so overwhelming that the industry must be sustained even at the cost of giving a go-bye to the established principles of commerce and economics. For example, the product is of such importance to the society like a life saving drug or something connected with the defence of the country, all these economic and commercial considerations should give way as the overall public interest demands that such an industry cannot be allowed to be shut down merely because it is not a commercially viable. Once such a decision is reached by the board, that the industry should be sustained to run, it is for the Board to decide as to which one or some of the various options under Section 18 should be adopted to sustain such an industry. The options once again depend on the basic reason which cause the sickness, if the sickness of the company is due to, for example irrational staff pattern, necessary remedial measures could be advised by the Board or if the sickness is due to paucity of funds, the board is authorised to frame a scheme providing for the assistance by way of loans, advances, concessions, sacrifices, etc. , either from the Government or from a financial institution. ( 19 ) THE question then arises is that either the Government or such financial company is required to give its consent for such a scheme or not. This question will be considered later in this judgment. ( 20 ) COMING to Section 20 of the Act, as already noticed, the Board is required to make a decision whether the sick industrial company is likely to make a net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations. In my view, the decision required to be taken under section 20 is slightly different from the decision to be taken under Section 17. From the scheme of the Act, it is clear that every company which is a sick company need not necessarily be wound up. In my view, the decision required to be taken under section 20 is slightly different from the decision to be taken under Section 17. From the scheme of the Act, it is clear that every company which is a sick company need not necessarily be wound up. The sickness might be so marginal, in the sense, the corrosion of the networth of the company is so small that even without any assistance or any one of the steps contemplated under section 18 been taken, it is possible for the company to make its net worth positive with a little care on the part of the management. In which case, the directions as contemplated under Section 17 subsection (2) can be given by the Board. But in another given case the corrosion of the net worth is so substantial that the financial obligations owed by the company are so huge and that it is not reasonably possible for the company to make its net worth positive without assistance, and such company is manufacturing a product whose continuation is not imperative in the public interest and therefore, the board decides not to frame a scheme for such a company as contemplated under sections 18 and 19 of the Act for such a company. However merely because the company is not a company falling within the ambit of Section 17 (2) or 17 (3) it need not necessarily mean that the company should be wound up. If those who are responsible for the promotion and management of the company are willing to bring any additional finances to meet all the financial obligations of the company, there cannot be any objection for the continuation of the company, as ultimately the continuation of any industrial company would result in production of goods and to that extent generation of wealth which is essential for the prosperity of any country. ( 21 ) FROM the above analysis of sections 17 to 20 of the Act, the most crucial decision which the Board is required to take before framing a scheme under Section 18 is that the framing of such a scheme is necessary to sustain the industry in the larger public interest. ( 21 ) FROM the above analysis of sections 17 to 20 of the Act, the most crucial decision which the Board is required to take before framing a scheme under Section 18 is that the framing of such a scheme is necessary to sustain the industry in the larger public interest. From the scheme of the Act and from the language of the above referred sections, I do not find any indication that, with regard to every company that becomes a sick industrial company within the meaning assigned to the expression under the Act, a scheme should be framed or in the alternative it should be wound up. ( 22 ) ON the facts of the case, it appears, the second respondent by its order dated 19-4-1993 did record a finding that it is necessary in the public interest to take measures in relation to the company. However, an examination of the order does not disclose as to what is the basis on which such a conclusion was reached and further, reasons given are not germane to the conclusion in the background of my earlier discussion. ( 23 ) HAVING reached a conclusion, rightly or wrongly, that it is necessary in the public interest to frame a scheme in relation to the petitioner-Company, the second respondent is required to follow the procedure prescribed under Section 18. Section 18 requires that the operating agency specified in the order passed by BIFR under section 17 (3), shall prepare a scheme providing for one or more of the measures enumerated in clauses (a) to (f) of subsection (1) and sub-section (3) of the section 18, provides the various modes by which the measures indicated under section 18 (l) (a) to (f) of the Act could be implemented. ( 24 ) THE case of the petitioner is that such a scheme was never framed by the operating agency nor the requirement of the publication of such a scheme stipulated under Section 3 (a) of Section 18 is ever complied with by the second respondent. ( 25 ) ON the other hand, the operating agency filed a counter-affidavit. At para 5 of the counter-affidavit, it is stated that a draft scheme was prepared by the third respondent whereunder the promoters were required to bring fresh funds of rs. 1535. ( 25 ) ON the other hand, the operating agency filed a counter-affidavit. At para 5 of the counter-affidavit, it is stated that a draft scheme was prepared by the third respondent whereunder the promoters were required to bring fresh funds of rs. 1535. 16 lakhs to receive (revive) the unit and as the promoters were not in a position to secure the funds, the scheme was not finalised. ( 26 ) THE learned Counsel for the petitioner argued that if the promoters are in a position to raise such funds, there is no necessity for the company to become a sick industry; therefore, it was not a reasonable proposal on the part of the operating agency. Apart from that whatever proposals were given by the petitioner or its promoters were rejected by the second respondent on the ground that the State bank of India who is the secured creditor is not agreeable for such a scheme, the learned counsel further submitted, that under section 19 of the Act, the Board has necessary power to frame a scheme providing for financial assistance by way of loans, advances, reliefs, concessions etc. , either from the Central or State governments or from the Banks or other financial Institutions and once such a scheme is framed by the Board, the bodies mentioned under Section 19, are bound without any option to honour such a scheme and the consent of the secured creditor i. e. , State Bank of India in the present case, is not required for the purpose of framing a scheme and the refusal on the part of the second respondent Board to frame a scheme on the ground that the secured creditor has not given its consent, is an abdication of the legal obligation under the Act. ( 27 ) ON the other hand, the learned counsel for the second respondent implead petitioner - Sri Gopalakrishna Murthy brought to the notice of the Court subsections (2) and (4) of Section 19 of the Act and Regulation 34 of the Board for industrial and Financial Reconstruction regulations, 1987 which provisions read as follows;-"section 19 (2) Every scheme referred to in sub-section (1) shall be circulated to every person required by the scheme to provide financial assistance for his consent, within a period of sixty days from the date of such circulation (or within such further period, not exceeding sixty days, as may be allowed by the Board, and if no consent is received within such period or further period, it shall be deemed that consent has been given ). Section 19 (4) Where in respect of any scheme consent under sub-section (2) is not given by any person required by the scheme to provide financial assistance, the Board may adopt such other measures, including the winding up of the sick industrial company, as it may deem fit. "regulation 34 _: Procedure for sanctioning schemes under Section 19 34 (1) A scheme under sub-section (1) of Section 19, which provides for financial assistance to the sick industrial company by way of loans, advances, guarantees, reliefs, concessions or sacrifices from the central Government, a State government, any Scheduled or other bank, a public financial institution, state level institution, or any institution or other authority shall be sanctioned by the Board, with the consent of the Government, bank, institutions or other authorities called upon to provide loans, advances, guarantees, reliefs, concessions or sacrifices. (2) The Board shall cause the scheme to be circulated to every person required by the scheme, to provide financial assistance by way of loans, advances, guarantees, reliefs, concessions or sacrifices for giving his consent, latest, within a period of sixty days from the date of such circulation (or within such further period not. exceeding 60 days as may be allowed by the Board. If no such consent is received, it shall be deemed to have been given.) (3) Upon receipt of consent from every person (or when consent deemed to have been given) in terms of sub-regulation (2), the Board may, as soon as may be, sanction the scheme, which shall be binding on all concerned on and from the date of such sanction. "and submitted that in framing any scheme and making a provision for granting financial assistance to sick industrial company, or granting of concessions or making sacrifices in favour of the sick industrial company, the consent body is required to be taken and the second respondent Board cannot without such consent unilaterally declare obligating either the State or a financial institution to make either any advances by way of loans or by way of grant of any concession with all sacrifice. Only in recognition of the limitation, that is without the consent of the bank, to which the petitioner-Company owes huge amount, the scheme could not be framed, and the second respondent board directed the operating agency to hold a joint meeting with all the concerned persons including the implead petitioner-Bank. The Bank, for various legal and economic reasons refused to give such consent. The learned Counsel further submitted that the bank is a necessary party to the proceedings and has the requisite locus standi to be impleaded. ( 28 ) I entirely agree with the submission made by the learned Counsel for the implead petitioner for the following reasons: Firstly, the language of the enactment is clear that such a consent of the bank is required before the Board could frame a scheme. Secondly, that the bank which is a Nationalised Bank and heavily regulated by the various provisions of the law in the manner of the conduct of it s business as it is dealing with funds of the general public. Therefore, before giving its consent it must carefully assess the various factors, to come to the conclusion that such a consent is required to be given. In my view one of the crucial factors, is that, the larger public interest demands the giving of such consent either to render further financial assistance of making a sacrifice of the existing legal rights, in favour of the bank, though the immediate beneficiary is the company and its shareholders. ( 29 ) AS the implead petitioner-Bank which is the main creditor of the company in question was not agreeable for giving any concession or making any sacrifice in favour of the company, in my view, the respondents 1 and 2 rightly directed the company to be wound up. ( 29 ) AS the implead petitioner-Bank which is the main creditor of the company in question was not agreeable for giving any concession or making any sacrifice in favour of the company, in my view, the respondents 1 and 2 rightly directed the company to be wound up. ( 30 ) COMING to the issue of the locus standi of the bank, I am clearly of the opinion that if the implead petitioner has a statutory recognised right under Section 15 (2) of the act to bring it to the notice of the second respondent for appropriate action under sick Industries Act to say that the implead petitioner has no locus standi to participate in the writ petition to be wholly illogical. Apart from that, whatever be the out come of this writ petition would directly affect the implead petitioner-Bank as the right of the bank to recover the amount due to it from the company would depend on the result of this writ petition. ( 31 ) FOR all the abovementioned reasons, i see no merits in the writ petition; the same is therefore dismissed. R. C. C. No. 4 of 2000 is closed.