IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY FOURTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO.11970 of 2008 Between: M/s. Maruthi Cottex Limited, A company Registered under the Companies Act 1956 having its Registered Office at 257, Chotuppal Village, Nalgonda District, Rep. by its Managing Director, Sri Vijay Garg, S/o. Sri Hari Charan Garg, aged 55 years. ..... PETITIONER. AND 1 The Appellate Authority for Industrial and Financial Reconstruction, 10th Floor, Jeevan Prakash Building, 25, Kasturba Dandhi Marg, New Delhi 110 001. 2 The Board for Industrial & Financial Reconstruction, Jawahar Vyapar Bhawan, No.1, Tolstoy Marg, New Delhi --110 001. 3 The Chairman & Managing Director, State Bank of Hyderabad, Gunfoundry, Hyderabad. 4 The Chairman & Managing Director, Industrial Development Bank of India, IDBI Tower, Cuffe Parade, Mumbai. ..... RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue appropriate writ order or Direction more particularly one in the nature of a Writ of Certiorari calling for documents pertaining to Appeal No. 316 of 2003 on the file of the Respondent No.1 herein and upon perusal of the same be pleased to quash the order dt. 19-05-2008 and consequentially remand the matter back to the Respondent No.1 for fresh disposal in accordance with law in the interest of justice and pass Counsel for the Petitioner : MR.MILIND G GOKHALE Counsel for the Respondent No.: MR.A.RAJASHEKAR REDDY (ASST. SOLICITOR GEN) The Court made the following : ORDER : (Per Hon’ble Sri Justice Ghulam Mohammed) This writ petition is filed for writ of Certiorari calling for the records pertaining to the order dated 19-05-2008 passed by the first respondent in Appeal No.316 of 2003 and quash the same. 2. The brief facts of the case are that a reference was registered under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short ‘the Act’) by the Board for Industrial and Financial Reconstruction (for short ‘the B.I.F.R.’) cum second respondent vide reference No.293 of 2000 and after inquiry the second respondent by its order dated 15-11-2000, declared the petitioner company as a sick industrial company in terms of Section 3 (i) (o) of the Act. Thereafter, the second respondent issued a notice dated 28-03-2003 to the petitioner company calling upon it to show cause as to why it should not be wound up. Aggrieved by the said show cause notice, the petitioner company preferred an appeal in Appeal No.170 of 2003 before the first respondent and no interim orders were passed in that appeal but, the appellate authority assured the petitioner before passing any orders, it would hear and dispose of the appeal. The petitioner informed the appellate authority, that the next date of hearing before the second respondent was fixed on 02-07-2003. However, the appellate authority did not hear the matter before 02-07-2003, due to which, the second respondent on the same day passed the order of winding up of the petitioner company and the Appeal No.170 of 2003 practically became infructuous. Challenging the inaction, the petitioner prepared another appeal before the appellate authority bearing Appeal No.316 of 2003. In that appeal, the appellate authority did not grant interim orders staying the effect and operation of the order of the second respondent. Aggrieved by the same, the petitioner preferred writ petition No.23635 of 2003 and this Court by order dated 11-11-2003 stayed the operation of the order dated 02-07-2003 of the second respondent and that stay order is still in force. While things stood thus, the appellate authority started proceedings in Appeal No.316 of 2003 and the petitioner submitted a fresh rehabilitation proposal for consideration before it and also informed that substantial payments have been made to the I.D.B.I. and the State Bank of Hyderabad, pursuant to One Time Settlement (OTS) and that regular payments were continued to be made. However, the appellate authority by its order dated 02-07-2003 ordered the winding up of the petitioner company and the second respondent sent the recommendations to Company Court vide R.C.C. No.6 of 2003 recommending winding up of the company, which has been stayed by the Company Court. Hence, this Writ petition. 3. The learned counsel for the petitioner contended that in spite of granting interim stay by this Court on 11-11-2003, the appellate authority continued the proceedings in Appeal No.316 of 2003 and disposed of the same, which is not sustainable and as such the appellate authority ought not to have ordered the winding up of the petitioner company. Further, the learned counsel contended that in spite of the Petitioner made substantial payments to the I.D.B.I. and to the State bank of Hyderabad, in pursuance of the One Time Settlement (OTS), the appellate authority without taking that aspect into consideration, erroneously dismissed the Appeal by ordering winding up of the company. 4. The learned counsel for the respondents submits, when the Petitioner participated and contested the appeal, the interim order passed by this Court substantially amounts to infructuous. 5. Heard the learned counsel on either side and perused the matter. It is seen that this Court passed an interim order dated 11-11-2003 in W.P. No.23536 of 2003 to stay the proceedings in the Appeal No.316 of 2003. When this Court stayed the proceedings in the said appeal, the appellate authority ought not to have heard the appeal and passed the impugned order. The appellate authority grossly erred in disposing the appeal when the matter is subjudice before this Court. Further, the appellate authority ought to have taken into consideration the aspect of petitioner paying the amounts in pursuant to One Time Settlement (OTS). Having regard to the facts and circumstances of the case, we deem it appropriate to remit the matter back to the Appellate authority for fresh consideration. 6. Hence, the Writ petition is allowed. The order dated 19-05-2008 in Appeal No.316 of 2003 is set aside. The first respondent is hereby directed to hear the matter afresh after giving opportunity to both sides, within a period of one month from the date of receipt of a copy of this Order. Further, it is seen that the petitioner has not informed about the interim order dated 11-11-2003 in W.P. No.23635 of 2003 to the Appellate authority. Therefore, it is just and proper to impose a cost of Rs.25,000/- (Rupees twenty five thousand only) on the petitioner, so as to deposit the same to the credit of State Bank of Hyderabad/third respondent. _____________________ GHULAM MOHAMMED, J _______________________ VILAS.V.AFZUL PURKAR, J June 24, 2009. DSH