JUDGMENT Sunil Ambwani 1. This writ petition has been filed against the orders dated 8.2.2002 passed by Board for Industrial and Financial Reconstruction (in short 'B.I.F.R.') in Case No. 90 of 1997, in the matter of M/s. Triveni Refinery (P.) Ltd. confirming final opinion for winding up of the company and the order dated 30.4.2002 passed by Appellate Authority for Industrial and Financial Reconstruction dismissing an Appeal No. 83 of 2002, filed by the company. 2. I have heard Sri Ravi Kant, Senior Advocate, assisted by Sri K. M. Garg. The company incorporated on 12.10.1989, set up a factory in March, 1990 at Gudhrauli, district Fatehpur for refining vegetable oils by chemical process. Initial capacity of 7500 M.T. was increased by 3000 M.T. in 1994-95. The factory, however, could not utilise its capacity and incurred losses attributed by company to non-availability of working capital and delay in power supply. A reference was made under Section 15 (1) of Sick Industrial Companies (Special Provisions) Act, 1985 (in short the 'Act') to B.I.F.R. on the basis of accounts for the year ending 31.3.1996, showing accumulated losses of Rs. 63.48 lacs as against net worth of Rs. 42.70 lacs. The company was declared sick under Section 3 (1) (o) of the Act on 11.9.1997 and was permitted to prepare and submit a rehabilitation proposal under Section 17 (2) of the Act within eight weeks after obtaining concurrence from all concerned parties. 3. A rehabilitation proposal was submitted by company dated 8.11.1997. The proposal was partly acceptable to P.I.C.U.P., the only secured creditor. It, however, did not agree for consideration of additional exposure either by term loan or working capital loan. P.I.C.U.P. finally informed B.I.F.R. that it has no acceptable rehabilitation proposals. In proceeding dated 29.7.1998 B.I.F.R. was informed that company has not made a request for seeking extension of time for further negotiations with P.I.C.U.P. It also found that it was not practicable for the company on its own to make its net worth exceed its accumulated losses within a reasonable time and thus it is necessary and in public interest to adopt measures specified in Sections 18 and 19 of the Act. Accordingly I.F.C.I. was appointed as Operating Agency under Section 17 (3) of the Act, to prepare rehabilitation report, keeping in view the provisions of Section 18 and the guidelines issued by B.I.F.R. A detailed techno-economic viability study was required to be carried out. By the same order the company was directed to submit complete and credible revival proposal to operating agency within four weeks and to deposit Rs. 50,000 with I.F.C.I. towards its fees. I.F.C.I. was also required to hold joint meetings of all concerned for consideration of rehabilitation proposal to be submitted by the company. 4. When the matter was taken up next on 27.9.1999, the Operating Agency informed B.I.F.R. that the company submitted a sketchy proposal in January, 1999. The proposal envisaged term loan and working capital assistance, which was not tying up with any institution or bank. Company had also not submitted its balance sheet. On inquiry regarding tying up of term loan and working capital, the company merely stated that S.B.I. was examining the proposal. B.I.F.R. observed that the company/promoters were not interested in rehabilitation inasmuch as notice sent were received back undelivered with the remarks "not claimed." The Board issued direction to the operating agency to advertise in leading newspapers inviting offers for taking over/ leasing/ amalgamation/ merger for rehabilitation with or without one time settlement of the dues of financial institutions and bank giving four weeks for submission of offers. Promoters were also required to submit proposals in response to advertisement. Operating agency was also required to formulate a comprehensive rehabilitation scheme based on information on Form A to be collected from the Bench and offered the same to alternate promoters. In the event any complete rehabilitation proposal was not received, the Bench proposed issuance of show cause notice for winding up without holding any further hearing. The company filed an Appeal No. 176 of 1999 against the aforesaid order. By this time, the I.F.C.I. (O.A.) had issued advertisement, in terms of order of B.I.F.R. and it was reported that no proposal was received except a proposal from the company in December, 1999, copy of which were issued to secured creditors for information. The company filed an Appeal No. 176 of 1999 against the aforesaid order. By this time, the I.F.C.I. (O.A.) had issued advertisement, in terms of order of B.I.F.R. and it was reported that no proposal was received except a proposal from the company in December, 1999, copy of which were issued to secured creditors for information. In view of the aforesaid developments, the Appellate Authority even though there being no competitive proposal from any body except appellant, which is under examination, gave directions to I.F.C.I. (O.A.) to examine the proposal after taking into account the comments of secured creditors and submit report to B.I.F.R. with advance copies to appellant, and secured creditors, to be considered by B.I.F.R. The operative portion of the order dated February 28, 2000, is quoted as below : "In view of the above development, there being no competitive proposals from anybody other than the appellants and there being only one proposal, which is under examination, as stated by the representative of I.F.C.I. (O.A.), in consultation with the secured creditors, the only direction from us is that I.F.C.I. (O.A.) shall examine the proposal of the appellants on merits after taking into account the comments of the secured creditors and submit a report to the B.I.F.R. with advance copies to the appellants and the secured creditors. The report will be considered by B.I.F.R. after giving an opportunity of hearing to all the parties including, inter alia, the appellants to whom the notice of hearing will be sent by B.I.F.R. at their changed address. The appeal is disposed of." 5. On 2.11.2001, B.I.F.R. found that there was no rehabilitation proposal with the means of finance fully tied up, for consideration of the Board, and that despite giving sufficient opportunity, and explored/ exhausted all possibility of rehabilitation, the company was not likely to make its net worth exceed its accumulated losses within a reasonable time, while meeting its financial obligations, and that the company as a result thereof was not likely to become viable in future and hence it was just and equitable and in public interest that it should be wound up. A show cause notice was accordingly issued giving another opportunity to existing promoters to formulate a viable rehabilitation proposal and to submit the same with O.A. within thirty days. A show cause notice was accordingly issued giving another opportunity to existing promoters to formulate a viable rehabilitation proposal and to submit the same with O.A. within thirty days. ON 8.2.2002, it was found that no proposal was submitted by the company or received from any other party after the notice of winding up petition. The company had approached the P.I.C.U.P. for O.T.S., but the application was not supported by a draft for earnest money. The company had sought waiver of entire interest and also remission of substantive portion of principal amount. The representative of company referred to the Trade Tax deferment scheme of State Government but it was admitted that the company has not yet approached the State Government. On a query from Bench whether commercial production had commenced, the representative of company informed that the plant never commenced financial production. In the circumstances after exhausting all opportunities of rehabilitation, the Bench came to a conclusion that the promoters are not serious in rehabilitating the company nor were they resourceful enough to mobilise the fund and thus the opinion be forwarded to High Court to wind up the company under Section 20 (1) of the Act. The opinion has been accepted by this Court and the company had been wound up by order of the Court dated 6.5.2002. An application for setting aside the order has been dismissed on 24.5.2002. A Special Appeal No. 680 of 2002 is pending against the order. The company had filed an Appeal No. 83 of 2002, before Appellate Authority for Industrial and Financial reconstruction, which was dismissed on 29.4.2002. The observation of the appellate authority while dismissing the appeal are quoted below : "In their proposal submitted to I.F.C.I. (O.A.)/P.I.C.U.P., T.R.P.L./ promoter had stated that T.R.P.L.'s operations were not financially viable without grant of exemption from trade tax for another five years. However, T.R.P.L. has not been able to get any such assurance of exemption from trade tax (sales tax) from the State Government. Moreover, it is T.R.P.L.'s case that its operations can be made viable only if all the interest dues are waived. P.I.C.U.P. had already rejected T.R.P.L.'s prayer for conversion of simple interest dues into zero rate preference shares redeemable in five yearly instalments. T.R.P.L. has not succeeded in obtaining P.I.C.U.P.'s approval for waiver of interest dues. T.R.P.L.'s factory is lying closed for over four years. P.I.C.U.P. had already rejected T.R.P.L.'s prayer for conversion of simple interest dues into zero rate preference shares redeemable in five yearly instalments. T.R.P.L. has not succeeded in obtaining P.I.C.U.P.'s approval for waiver of interest dues. T.R.P.L.'s factory is lying closed for over four years. T.R.P.L./promoters had not even reimbursed the advertisement expenses of Rs. 26,296 to I.F.C.I. (O.A.). "Admittedly, T.R.P.L. is so heavily indebted that it cannot be rehabilitated on the basis of reliefs and concessions as per R.B.I. norms, T.R.P.L./promoter have been seeking extraordinary reliefs, concessions and sacrifices from the State Government and P.I.C.U.P. but the said reliefs, concessions and sacrifices have not been agreed to by the State Government and P.I.C.U.P. S.I.C.A. is meant for expeditious determination of rehabilitative measures for potentially viable sick industrial companies. It is not meant for unnecessary prolongation of proceedings, for unviable sick industrial companies. Six years have passed after T.R.P.L. became sick. For over four years the plant is lying closed. Prolongation of proceedings has not served any public purpose. All the workers have already left. There is neither production nor employment nor payment of statutory dues or the dues of P.I.C.U.P. Prolongation of proceedings has only served the private interests of the promoters/guarantors by way of statutory protection under Section 22 (1) of S.I.C.A. We do not see any possibility of rehabilitating T.R.P.L. B.I.F.R.'s opinion for winding up of T.R.P.L. is confirmed. As already pronounced on 29.4.2002, the appeal stands dismissed." 6. Sri Ravi Kant, Senior Advocate, submits that after B.I.F.R. did not exhaust all possible measures for rehabilitation of the company. It rejected the proposal of the company for rehabilitation under Section 17 (2) of the Act. The I.F.C.I. as O.A. under Section 17 (3) of the Act was required to examine the proposal submitted by the company, and to formulate rehabilitation scheme if possible. The O.A., however, did not prepare and submit any rehabilitation scheme under Section 17 (2) of the Act, and proceeded to cause advertisement under Section 18 of the Act. The appellate authority reversed the stage of proceedings to Section 17 (2) of the Act in directing the O.A. to examine the proposal of the company on merits. According to him, after the order of appellate authority and consideration of proposals of the company, the O.A. was statutorily obliged to prepare a rehabilitation scheme. The appellate authority reversed the stage of proceedings to Section 17 (2) of the Act in directing the O.A. to examine the proposal of the company on merits. According to him, after the order of appellate authority and consideration of proposals of the company, the O.A. was statutorily obliged to prepare a rehabilitation scheme. The B.I.F.R. could not have proceeded further to record its opinion to wind up the company under Section 20 (1) of the Act, until the steps under Section 17 (3) and under Section 18 of the Act were completed. The submission in substance is that statutory procedure for exhausting measures to rehabilitate the company were not exhausted and thus the orders of B.I.F.R. and A.A.I.F.R. are liable to be set aside. Counsel for petitioner has relied upon Subhas Kumar Bhuwalka and another v. Appellate Authority for Financial and Reconstruction and others, AIR 1995 Del 370 and M/s. Ramnik Lal and Company v. Wallace Flour Mills Co. Ltd., AIR 1992 Bom 207 , in support of his submission. The Delhi High Court in Subhash Kumar Bhuwalka rejected the argument that since operating agency was bound to come up with a scheme of its own and it having filed to do so, the B.I.F.R. was incapacitated in sanctioning the impugned rehabilitation scheme given by the E.I.C.C. It was held that the operating agency is an arm of B.I.F.R. and if the operating agency expresses its inability to come up with any scheme for any reason, the B.I.F.R. cannot be placed in a helpless position and cannot be handicapped in proposing any scheme. In M/s. Ramnik Lal and Company, Bombay High Court found in para 11 of the report that before the Board makes up its mind under Section 17 (1) or under Section 17 (2) of the Act, the Board can consider a scheme which may be proposed by the parties and then decide as to whether it is reasonably applicable for the company to make its net worth positive. In this case, the Court was concerned with the question whether Section 22 of the Act operates to dismiss or abate pending winding up petition. In this case, the Court was concerned with the question whether Section 22 of the Act operates to dismiss or abate pending winding up petition. It was held that the winding up petition and the Judges summons are liable to be suspended and kept in abeyance and are adjourned sine die subject to the right of the parties to revive proceedings and that orders passed by the High Court in winding up proceedings shall not preclude the Board from considering sanctioning or implementing the scheme. 7. The scheme of Act shows that upon receipt of reference under Section 15, the Board may inquire about the sickness of the industrial company under Section 16 or hand over such inquiry to the operating agency. After such inquiry, if the Board is satisfied that the company has become sick industrial company, it shall decide under Section 17 (1) by order in writing, whether it is practicable for the company to make its net worth exceed, its accumulated losses within a reasonable time. If it finds that sick industrial company can be revived, the Board shall give opportunity to the company under sub-section (2) of the Act to make its net worth positive imposing such restrictions and conditions and period of time which it finds to be expedient. Where the Board decides under sub-section (1) that it is not practicable for sick industrial company to make its net worth exceed, the accumulated losses within reasonable time and it is necessary and in public interest to adopt all or any measures specified in Section 18, it may, by order in writing, under sub-section (3), direct an operating agency to give the guidelines to prepare a scheme providing for such measures in relation to such company. In sub-section (4), it has power to review the orders passed under sub-section (2) and sub-section (3) of Section 18 provides for preparation and sanction of scheme. In sub-section (4), it has power to review the orders passed under sub-section (2) and sub-section (3) of Section 18 provides for preparation and sanction of scheme. It provides under sub-section (1) that where an order is made under sub-section (3) of Section 17 in relation to any sick industrial company, the operating agency shall prepare as expeditiously as possible and ordinarily within ninety days a scheme with respect to such company providing for any one or more to the following measures, namely, (a) the financial reconstruction of sick industrial company, (b) proper management by change in, or take over of the management of the sick industrial company, (c) the amalgamation of the sick industrial company with any other company or vice versa, (d) to sell or lease of a part or whole of any industrial undertaking of the sick industrial company, the (da) the regularization of managerial personal, supervisory staff and workmen in accordance with the matter, (e) such other preventive in - ameliorative and arbitrary measures as may be proper and such incidental, consequential or special measures as may be necessary or expedient in connection with or for the purposes of measures specified in Clauses (a) to (e). 8. Coming to the facts of the present case, I find that by order dated 27.9.1999, B.I.F.R., after finding that there was no rehabilitation proposal with the means of finance for consideration of Bench under Section 17 (2), rightly directed O.A. to initiate measures under Sections 17 (3) and 18 of the Act. These directions were as follows : (i) O.A. would issue advertisements in leading newspapers within 2 weeks inviting offers for the takeover/leasing/ amalgamation/ merger for rehabilitation, with or without O.T.S. of the dues of F.Is. and banks giving 4 weeks time for submission of offers. The relative merits of the offers received would be examined by the O.A., a comparative statement prepared, a joint meeting held after circulation of background note to all concerned and a report submitted to the Board based on the evaluation of the relative merits of the offers received and the consensus arrived at in the joint meeting, within a further period of 2 weeks. The present promoters may also submit a proposal in response to the advertisement. The cost of the advertisement would initially be borne by the O.A. and would subsequently be reimbursed by the company. The present promoters may also submit a proposal in response to the advertisement. The cost of the advertisement would initially be borne by the O.A. and would subsequently be reimbursed by the company. (ii) The O.A. would on their own formulate a comprehensive rehabilitation scheme based on the information available in Form A and the enclosure thereto, which would be collected by the O.A. from the Bench and offer the same to the alternate promoters. (iii) The O.A. would inform the Board on the expiry of 6 weeks the details of the offers received in response to the advertisement. In the event of no concrete rehabilitation proposal being received in response to the advertisement, the Bench may consider issuing of a show cause notice winding up without holding any further hearing. (iv) On receipt of the O.A.'s report, the Bench would pass further appropriate orders. (v) The Bench Officer would send an additional copy of the proceedings of today's hearing to P.I.C.U.P., who would arrange to serve the same on the company and the company's acknowledgment in respect thereof would be sent by P.I.C.U.P. to the Bench. The O.A. would also inform the company of today's proceedings against the company's acknowledgment." The aforesaid directions under Section 17 (1) and Section 18 were comprehensive in order to find out offers for taking over/leasing/ amalgamation/ merger for rehabilitation. The promoters were also required to submit a proposal. By these directions, the O.A. was also required to formulate a comprehensive rehabilitation scheme based on information available in Form A collected by O.A. from the Board, and to offer the same to alternate promoters. Since none of the promoters came forward, there was no question of considering the comprehensive rehabilitation scheme. The rehabilitation of any Sick Industrial Company involves one time settlement or re-schedulement of its dues by the Banks, financial institutions or other corporations, either secured or unsecured, infusion of fresh funds by promoters or any party interested or brought forward by promoters or otherwise, reliefs and concessions in taxes, dues, re-organisation of Board of Directors, and settlement with employees and workmen. It also involves fresh commitments and an effort of the existing promoters to fulfil the afore-said conditions. It also involves fresh commitments and an effort of the existing promoters to fulfil the afore-said conditions. In case the promoters do not show any interest in adopting the above aforesaid measures, the operating agency invites offers after advertisement, examines the offers received and evaluates the merits of the efforts after inviting all those who are concerned including the corporation, employees and workmen and to put forward such formula and comprehensive rehabilitation scheme before the Board. The operating agency can provide a platform to consider, organize meetings and evaluate the respective merits of the scheme, iron out the difficulties and suggest measures for improvement and effective implementation of the scheme. If, however, the promoters do not show any interest at all and that no outside efforts are received, it cannot be expected that operating agency, on its own, will formulate a rehabilitation scheme. The object of involvement of operating agency is to provide a helping hand, its expertise and to offer measures and to suggest measure for effective implementation of the scheme to be considered and accepted by the Board. It is not expected, on its own, from the operating agency, without any participation of the existing promoters or any outside agency interested in rehabilitation, to prepare rehabilitation scheme for implementation. In the present case, the promoters did not show any interest and no outside efforts were received inspite of the advertisement. The order of appellate authority did not reverse the clock but was step in aid to find out if any re-habilitation was still possible and required I.F.C.I. (O.A.) to examine the proposals of the company on merits. None of these proposals were found acceptable by Board, which is an ex-pert body. It was found that company does not have financial proposals fully tied up, and was not serious about O.T.S., inasmuch as even the earnest money was not paid and further it had not even applied to the Trade Tax Department for sales tax deferment. The matter was pending since 1997 and that the interest liability was ac-cumulating. The company had no re-sources to arrange for working capital and that secured creditors were not willing to make extra-ordinary sacrifices. In the circumstances, the B.I.F.R. rightly recommended for winding up of the company. 9. No other ground was raised for consideration. The writ petition is devoid of any merit and is dismissed.