Case: Hindustan Antibiotics Limited Vs. Special Land Acquisition Officer (14) &amp; Others

no question of proceedings under the Act in acquiring lands belonging to company are proceedings as contemplated by section 22. There is therefore no question of prior consent of the Board being taken for that purpose. 16. Reliance was placed by the learned counsel for the petitioner on a judgment reported in the case of Maharshtra Tubes Ltd. V/s State Industrial & Investment Corporation of Maharashtra Ltd. & Another, (1993) 2 SCC 144 in support of its contention that consent of the Board is necessary even for proceedings under the Land Acquisition Act. In that case the Supreme Court of India was dealing with the question as to whether financial corporation established under the State Financial Corporation Act could exercise the powers under section 29 of that Act while proceedings under section 15 to 19 of the SICA are pending. After considering provisions of SICA the Supreme Court of India came too the conclusion that commencement of such proceedings by Financial Corporation would in all necessity render the entire process contemplated by sections 15 to 19 nugatory. The Supreme Court then held that in such a situation the law (SICA) merely expect the Corporation (Financial Corporation) or for that matter any other creditor to obtain consent of the Board or the Appellate Authority as the case may be. The Supreme Court then observed that the law viz. SICA has not left such Corporation or any other creditor without a remedy. It then proceeds to observe that the express proceedings occurring in section 22 must be widely construed. The observations of the Supreme court of India in this case made in para 6 of its judgment are liable to be noted verbatim: 6. On the other hand, the 1985 Act was enacted as its preamble manifests, with a view to timely detection of sick or potentially sick companies owning industrial undertakings, the identification of the nature of sickness through experts in relevant fields with a view to devising suitable remedial measurers through appropriate schemes and their expeditious implementation. Here the emphasis is to prevent sickness and in cases of sick undertakings to prepare schemes for their rehabilitation by providing financial assistance by way of loans, advances or guarantees or by providing reliefs, concessions or sacrifices from Central or State Governments, scheduled banks, etc. The basic idea is to revive sick units, if necessary, by extending further financial assistance after a through examination of the units by exerts and only when the unit is found too be no more capable of rehabilitation, that the option of winding up may be resorted to. It is for that reason that section 22(1) provides that during the pendency of (i) an inquiry under section 16 or (ii) preparation or consideration of a scheme under section 17 or (iii) an appeal under section 25, no proceedings for winding up of the concerned industrial company or for execution, distress or the like shall lie or be proceeded with in relation to the properties of that concern unless BIFR/appellate authority has consented thereto. The underlying idea is that every such action should be frozen unless expressly permitted by the specified authority until the investigation for the revival of the industrial undertaking is finally determined. It is thus crystal clear that the main thrust of this special legislation is a revival or rehabilitation of the sick industrial undertaking and it is only when it is realised that the same is not feasible that the option of winding up of the unit can be resorted to. It will be seen from the above that the main thrust of this special legislation (SICA) is revival or rehabilitation of sick industrial undertaking. The provisions of section 22 in our opinion, therefore be interpreted or read in the light of this object of the Act. 17. The Supreme Court then proceeds to note certain judgments of the High Court and Supreme Court in this connection under the provisions of State Financial Corporations Act, 1951 and observed that these cases therefore support the view that expression proceedings under section 22(1) need not be limited to legal proceedings as understood in the narrow sense notwithstanding the marginal notes. Because the provisions have to be interpreted according to the Supreme Court of India to consider the proper aspects sought to be taken up and solved by provisions of SICA. In our opinion, the observations of the Supreme Court of India in the above referred case over all support the view that we have taken that proceedings contemplated by section 22 whether legal or otherwise must be such as are connected with financing or restructuring of the Company. 18. Reliance was placed on reported decision of the Supreme court of India in the case Maharashtra Tubes Ltd. V/s State Industrial & Investment Corporation of Maharashtra Ltd. & Another, (1993) 2 SCC 144. A careful consideration of the observations by the Supreme Court of India as a whole would in our opinion, reiterate concrete support to our opinion that proceedings contemplated by provisions of section 22 of SICA must be such as are analogous to proceedings mentioned therein and proceedings for acquisition of land are not such proceedings analogous to those mentioned in section 22. There is therefore no substance in the submission made by the learned counsel. 19. There is yet another aspect which we would like to note. Proceedings for acquisition of land commenced with the publication of section 6 notification. That was done in 1998. No preventive action like filing of petition of the kind we are dealing with was taken till award was made under section 12 and communicated to the Company under section 12(2). This delay on the part of company to avoid acquisition of a part of its property by reference to section 22 is unexplained. However nothing much turns on this as on merits we have held above that legal proceedings as contemplated by section 22 do not encompass proceedings under Land Acquisition Act of the kind impugned in this petition.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. In our opinion, proceedings analogous to those enumerated above, but not specifically covered by provisions of section 22 also may not be taken up without previous consent of the Board. But it is only such proceedings which are connected with the financial existence and proprietary rights of the Company which are prohibited. Such proceedings directly deal with the existence of the Company itself and where restructuring on reconstruction or financing is pending contemplation. All these proceedings as contemplated by section 22 therefore must relate to the sickness of the Company and no proceedings of the kind mentioned above and similar proceedings be taken without consent of the Board so that activities undertaken by the Board under the provisions of SICA are not hampered by such proceedings. In our opinion, proceedings contemplated by section 22 are obviously legal proceedings. Proceedings taken up by any authorities which are judicial or quasi judicial. What is contemplated in section 22 is therefore no proceedings of the kind referred to above be taken up except with the previous sanction of the Board. There is no prohibition. All that as stipulated by section 22 is taking up of these legal proceedings without prior consent of the Board. The Board may on being moved for grant of such consent take into consideration the nature of legal proceedings and grant or refusal of sanction. We must therefore keep in mind that initiation of any legal proceedings is not barred by the provisions of section 22. What is provided for by it is prior consent of the Board13. In our opinion, proceedings contemplated under section 22 which can be taken up with prior consent of the Board are therefore proceedings in financial nature or proceedings having financial implications and are connected with the sickness of the industry concerned. They must in all cases be legal proceedings before a judicial authority or quasi judicial authority. That in our opinion would necessarily take us to consider question as to whether proceedings commenced under the Act are legal proceedings as understood in common parlance and whether such proceedings under the Act can be said to have been covered by the provisions of section 22 requiring prior consent of the Board15. In our opinion, no such consent is necessary because these proceedings under the Act are not such legal proceedings as are contemplated under section 22. We have enumerated above kind of proceedings contemplated by section 22. We repeat what in our opinion constitute legal proceedings as contemplated by section 22. By no stretch of imagination proceedings for acquisition of land can therefore be called legal proceedings as contemplated by section 22. Section 22 contemplates legal proceedings which have some bearing on the existence of the industrial company or its sickness or its refinancing or its restructuring or reconstruction. The entire lands which were earlier acquired for they are not being acquired again by the State for another purpose. It must be kept in mind that all lands belonging to they were acquired for the petitionercompany as power provisions of part 7 of the Act. It was acquired for the purposes of running of the Company or conducting its business. All that land acquired for the petitioners after its establishment is not sought to be acquired for the purposes of road widening or any other purposes as stated in section 6 notification. Only part of it is being acquired. The acquisition has nothing to do with any of things relating to sick industry. Even if it is assumed that land belonging to the Company can be sold for the purposes of revenue or for reconstruction of the Company this acquisition cannot affect the profits of the company in relation to its operation as a Company. There is therefore no question of proceedings under the Act in acquiring lands belonging to company are proceedings as contemplated by section 22. There is therefore no question of prior consent of the Board being taken for that purpose18. Reliance was placed on reported decision of the Supreme court of India in the case Maharashtra Tubes Ltd. V/s State Industrial & Investment Corporation of Maharashtra Ltd. & Another, (1993) 2 SCC 144.  A careful consideration of the observations by the Supreme Court of India as a whole would in our opinion, reiterate concrete support to our opinion that proceedings contemplated by provisions of section 22 of SICA must be such as are analogous to proceedings mentioned therein and proceedings for acquisition of land are not such proceedings analogous to those mentioned in section 22. There is therefore no substance in the submission made by the learned counsel19. There is yet another aspect which we would like to note. Proceedings for acquisition of land commenced with the publication of section 6 notification. That was done in 1998. No preventive action like filing of petition of the kind we are dealing with was taken till award was made under section 12 and communicated to the Company under section 12(2). This delay on the part of company to avoid acquisition of a part of its property by reference to section 22 is unexplained. However nothing much turns on this as on merits we have held above that legal proceedings as contemplated by section 22 do not encompass proceedings under Land Acquisition Act of the kind impugned in this petition.