Damodar Valley Corporation vs Appellate Authority For ...
2009 Latest Caselaw 2511 Del

*      HIGH COURT OF DELHI: NEW DELHI

+      Writ Petition (Civil) No. 9152/2009

                          Judgment reserved on: May 22 , 2009
%                         Judgment delivered on: July 07, 2009

       Damodar Valley Corporation                  ..... Petitioner

                          Through       Mr.Janaranjan Das with
                                        Mr.Dwetaketu Mishra, Advs.
                      Versus

       Appellate Authority for Industrial & Financial
       Reconstruction & Others                   ..... Respondents

                          Through       None
       Coram:

       HON'BLE MR. JUSTICE MADAN B. LOKUR
       HON'BLE MR. JUSTICE A.K. PATHAK

       1. Whether the Reporters of local papers may           Yes
          be allowed to see the judgment?

       2. To be referred to Reporter or not?                  Yes

       3. Whether the judgment should be reported             Yes
          in the Digest?



A.K. PATHAK, J.

1. The petitioner has filed this writ petition challenging

the order dated 26th February, 2009 passed by the Appellate

Authority for Industrial & Financial Reconstruction (hereinafter

referred to as AAIFR) as well as order dated 4th July, 2007 passed

by the Board for Industrial & Financial Reconstruction

(hereinafter referred to as BIFR) and praying therein that the

petitioner be permitted to file objections to the Draft

Rehabilitation Scheme (DRS).

2. Brief facts are that the petitioner is a Statutory

Corporation established under the Damodar Valley Corporation

Act, 1948. Its functions are the promotion and operation of

schemes for irrigation, water supply and generation,

transmission and distribution of electrical energy.

3. Respondent No.3 company was consumer of the

petitioner and defaulted in making the payment of electricity bills

and till 31st August, 2001 a sum of Rs.2.73 crores was due and

payable by respondent No.3 company to the petitioner.

4.            Respondent      No.3       company     became     sick     and      a

reference was made to BIFR.              It was declared as sick company

under Section 3 (1) (o) of the Sick Industrial Companies (Special

Provisions) Act, 1985 (for short SICA) vide order dated 26th

November, 1997 passed by the BIFR.

5. Draft Rehabilitation Scheme (DRS) was prepared and

circulated for revival of respondent No.3 company to all the

concerned parties inviting the objections/suggestions.

6. DRS was sent to petitioner by the BIFR on 23rd March,

2007 and was received by it on 6th April, 2007. The petitioner did

not file any objections to the DRS though it appeared before the

BIFR during the hearing. Vide order dated 4th July, 2007, BIFR

sanctioned the rehabilitation scheme. Though petitioner did not

file any objections/suggestions but BIFR suo moto deleted reliefs

and concessions proposed qua the petitioner as contained in

clauses No.(ii), (iv) (v) and (vi) of paragraph 9.3 of DRS and

added a condition of restoration of power supply.

7. Petitioner aggrieved by the order dated 4th July, 2007

passed by the BIFR, filed an appeal before the AAIFR. Grievance

of the petitioner was that BIFR did not grant time to the

petitioner to file objections/suggestions to the DRS despite its

request. BIFR wrongly recorded that the representative of the

petitioner did not raise any objection to the DRS. DRS was

received by the petitioner on 6th April, 2007 and the same was

under examination of the petitioner corporation. In the

meanwhile, the petitioner received a letter dated 21st May, 2007

from respondent No. 3 company which raised grave

apprehensions about the intention of respondent No.3 company.

Under these circumstances, BIFR should have given time to the

petitioner to file objections under Section 19 (2) of the SICA. In

the order BIFR did not mention that there was deemed consent of

the petitioner corporation. Sixty days as provided under Section

19 (2) of SICA should have been calculated from the date of

communication of respondent No.3 company dated 21st May,

2007 whereby it had reduced its offer given in the DRS. BIFR had

wrongly ordered for supply of electric power to respondent No.3

company even though not a single instalment was paid by the

said company. BIFR also unilaterally deleted some clauses of the

scheme.

8. These contentions of the petitioner were considered by

the AAIFR but did not find favour with the AAIFR for the reasons

mentioned in the impugned order, consequently, appeal was

dismissed vide the impugned order.

9. It has been observed in the impugned order that the

DRS was sent by the BIFR to the petitioner on 23rd March, 2007

and same was received by it on 6th April, 2007. The petitioner

failed to file objections to the DRS within the stipulated period of

60 days from the receipt thereof i.e. by 6 th June, 2007. Petitioner

did not apply for extension of time though it could have applied

for further time not exceeding 60 days before the expiry of the

stipulated period of 60 days from the date of circulation of the

DRS. Petitioner had failed to place on record any document or

application/communication to show that it had made a request

for extension of time prior to the hearing conducted by the BIFR

on 4th July, 2007 when the impugned order was passed. Thus

according to Section 19 (2) of SICA it will be deemed that the

consent had been given by the petitioner. Since Section 19 (2) of

SICA was a deeming provision it was immaterial for the BIFR to

record any finding in the impugned order regarding "deemed

consent". Certain reliefs and concessions were proposed vide

clauses (ii), (iv) (v) and (vi) of para 9.3 of DRS qua the petitioner

and the same were deleted by the BIFR even without filing any

objections/suggestions by the petitioner. Direction regarding

restoration of power supply was imperative to enable

rehabilitation of respondent No.3 company. Respondent No.3

company was bound by the sanctioned scheme with regard to the

payments of dues of the petitioner and the petitioner was at

liberty to bring to the notice of the BIFR any failure on the part of

respondent No.3 company in case schedule was not adhered to.

In the light of above observations AAIFR dismissed the appeal.

10. Petitioner has reiterated the same contentions which

were raised before the AAIFR and the same have been considered

by us. To support his contentions that BIFR ought to have given

time to the petitioner company to file objections/suggestions

beyond a period of 60 days as provided in Section 19 (2) of the

SICA, petitioner has placed reliance on two judgments rendered

by the Hon'ble Apex Court tilted as Topline Shoes Ltd.

Vs.Corporation Bank reported in (2002) 6 Supreme Court Cases

33 and India House Vs.Kishan N.Lalwani reported in (2003) 9

Supreme Court Cases 393.

11. Section 19(2) of the SICA reads as under:-

19(1) XXXXXXXXXXXXXXXX 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.

12. It is apparent from the above that every person

required to give financial assistance had to file his consent within

a period of 60 days from the date of circulation of the scheme or

within such further period, not exceeding sixty days, as may be

allowed by the Board. It is further provided that if no such

consent is received by the BIFR within sixty days or within

extended period, it shall be deemed that consent had been given.

In this case scheme was circulated by the BIFR to all the

concerned persons including the petitioner, DRS was received by

the petitioner on 6th April, 2007. Thus, objections/suggestions, if

any, should have been filed by the petitioner on or before 6th

June, 2007. However, petitioner failed to do so. Petitioner has not

placed on record any document to show that it had made any

written request on or before the expiry of 60 days period. BIFR

held hearing on 4th July, 2007 wherein petitioner had

participated. Even, during the hearing no written request was

made by the petitioner for extension of time. It is highly

improbable that BIFR would have avoided to record such request

had it been made by the petitioner more so, when no bias has

been alleged.

13. Sub-section 2 of Section 19 of SICA clearly provides

that if no consent is received within a period of 60 days it shall be

deemed that consent had been given. Since petitioner had failed

to file objections to the DRS, "deemed consent" has to be inferred.

14. Judgments relied upon by the petitioner, are in

different facts and the laws and are of no help to the petitioner.

In Topline Shoes case (supra) Section 13 (2) of the Consumer

Protection Act was involved. Similarly in India House case

(supra), court was seized with the interpretation of Section 12 (2)

of the Limitation Act. Section 19 (2) of the SICA is not pari

materia with Section 13 (2) of the Consumer Protection Act and

Section 12 (2) of the Limitation Act.

15. In this case, it has been specifically stipulated under

Sub-section (2) of Section 19 of the SICA that in case consent is

not received from the concerned person, it shall be deemed that

consent had been given. Petitioner did not raise any objection to

the DRS nor gave written consent. Consequence of remaining

silent by a party to the scheme has also been provided under the

aforesaid provision of law. There was no occasion for the BIFR to

extend the period beyond a period of 60 days without any request

made in this regard by the petitioner. Thus, it is deemed that

petitioner had consented to the DRS.

16. In view of the above discussions, we do not find any

jurisdictional error in the impugned orders. In our opinion

petition is devoid of merits.

17. Accordingly, we dismiss the writ petition in limine.

A.K. PATHAK, J

MADAN B. LOKUR, J

July 07, 2009 ps