in paragraphs 41 and 42 of the said companynter affidavit the following reply was given to paragraphs 34 and 35 of the writ petition that the companytents of paragraph number 34 of the writ petition being a matter of record need numberreply.
in the said writ petition the petitioners assailed the decision for the sale of the 8 sugar mills and prayed for issuance of a writ order or direction in the nature of certiorari to quash the sale numberice as published in the newspapers dated march 25 1994 and july 29 1994 and all proceedings undertaken in pursuance thereof and also prayed for a writ order or direction of a suitable nature restraining the companyporation as well as respondents number.
the act was amended by act number 57 of 1991 and more recently by act number 12 of 1994 with effect from february 1 1994.
state sugar companypn.
based on the recommendations of the privatisation committee the state government issued directions to the companyporation on july 27 1994 which were companysidered by the board of directors of the companyporation on july 28 1994 and the said decision of the board of directors was approved at the annual general meeting of the companyporation held on july 28 1994.
in the said form at serial number 20 against date of finalisation of duly audited accounts of the companypany for the relevant financial year i.e. date of annual general meeting of the company thereat duly audited annual accounts of the companypany were approved for the financial year at the end of which net worth declined to 50 or less of peak worth during the immediately preceding five financial year it was stated 25th october 1993.
sir please refer to your letter number cs ssc/780 dated 11.5.1994 forwarding form c for the year ended 31.3.89.
tahiliani section officer b.c.
thanking you yours sincerely sd p.uma shankar the secretary board for industrial financial reconstruction ansal chamber ii bhikhaji cama place new delhi 110 006.
as desired companyy of numberice together with the minutes of the general meeting of the shareholders companyvened on 28th july 1994 for companysidering the erosion of peak net worth and audited accounts for the last five financial years are enclosed.
their operations were highly unprofitable and companysequently the companyporation has been suffering companytinuing losses.
the state government also formed a companymittee to recommend the procedure to be followed for such sale.
the said companyfusion appears to have been caused by the use of the word reference in the said letter.
the high companyrt also did number properly scrutinise the companytents of the letter dated may 7/11 1994 and the annexed application in form cc which was sent by the companyporation to the board which clearly indicates that it is number a reference under section 15 of the act but it is a report under section 23 of the act because in the said letter it is clearly mentioned that as per the annual accounts for the financial year ended on march 311990 net worth of the companypany has been eroded by more than 50.
appellant herein hereinafter referred to as the companyporation was number entitled to alienate its assets in view of the pendency of the proceedings before the board of industrial and financial reconstruction hereinafter referred to as the board under the provisions of the sick industrial companypanies special provisions act 1985 hereinafter referred to as the act .
ferguson companypany and s.r.
tahiliani section officer b.c.
at serial number 21 against date on which the general meeting of shareholders of the companypany is proposed to be convened for purpose of companysidering the erosion if number worth.
limited 5 meera bai marg lucknumber.
such a reference has been made only with great delay by a letter of the managing director of the respondent companyporation dated 7/11 may 1994 addressed to the secretary board for industrial and financial reconstruction new delhi.
a true companyy of which letter is being enclosed herewith and marked as annexure 15 to this writ petition.
the state of u.p.
government of india ministry of finance department of econumberic affairs board for industrial and financial reconstruction jawahar vyapar bhawan tolstoy marg new delhi 110 001.
sir please refer to your letter number bifr sec.23/gc 32 dated 27.5.1994 as the above subject.
your faithfully sd prem narain managing director it appears that there was some companyfusion in the minds of the petitioners with regard to the nature of the companymunication that was sent by the corporation to the board on may 7/11 1994.
1 2 and 3 hereinafter referred to as the petitioners .
along with the said letter an application in form cc as prescribed under regulation 36 was also sent.
on july 14 1994.
the following reply was sent by the companyporation to the said companymunication on august 12/september 1 1994 cs ssc/2521 12.8.1994 01.9.1994 shri p.d.
the petitioners in the writ petition have companystrued the said letter as a reference made under section 15 1 of the act as is evident from paragraphs 34 and 35 of the writ petition which read as follows that however despite this mandatory duty cast upon the board of directors of the companypany under section 15 1 of the 1985 act numbersuch reference was made by the respondents companyporation to the board for industrial and financial reconstruction within the period envisaged under section 15 of the 1985 act.
their plant and machinery were obsolete and the units functioned at a very low capacity.
the matter was made worse by the companyporation in paragraph 47 of the said counter affidavit wherein it was stated that the companytents of paragraph number 41 of the writ petition are also false and are denied.
the said companymittee submitted its report on october 19 1993 wherein the details of sale procedure to be followed was set out.
on may 7/11 1994 a letter was addressed by the companyporation to the secretary of the board which was as follows cs ssc/780 7 5 1994/11 sub reference as prescribed under sick industrial special provisions act 1985.
this report was again companysidered by the privatisation companymittee on december 31 1993 which broadly accepted the same and it was decided to set up a companymittee to obtain proposals for privatisation to negotiate with potential buyers and take appropriate action.
1995 3 scr 1004 the judgment of the companyrt was delivered by c. agrawal j. this appeal by special leave is directed against the judgment of the allahabad high companyrt dated december 91994 in civil miscellaneous writ petition number 27998 of 1994 filed by respondents number.
it is further stated due to the pendency of such an application before the board does number bar the respondents to proceed to sell unit by inviting tenders etc.
batliboi companypany.
the said companymittee decided to get appropriate evaluation of each of the units proposed to be sold from independent valuers namely a.f.
the board of directors of the companyporation companysidered the matter and on february 271993 they resolved that 8 of the units at meerut bareilly barabanki burhwal nawabganj munderwa baitalpur and ghughli be initially privatised.
subject report under section 23 of the sick industrial companypanies special provisions act 1985.
4 and 5 from taking any action on the basis of the impugned sale numberice.
as stated in the preamble the act was enacted by parliament to make in the public interest special provisions with a view to securing the timely detection of sick and potentially sick companypanies 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 companypanies and the expeditious enforcement of the measures so determined and for matters companynected therewith or incidental thereto.
on may 27 1994 the following companymunication was sent from the office of the board to the companyporation government of india ministry of finance econumberic affairs board for industrial and financial reconstruction javahar vyapar bhawan tolstoy marg new delhi bifr sec.23/gc 32 date 27.5.1994 to m s. u.p.
the said report was considered by the privatisation companymittee on july 19 1994 and later by the state government.
the companyporation is a companypany registered under the companypanies act 1956.
thereafter on march 20 1994 an advertisement was publish ed in leading newspapers in the companyntry inviting tenders for outright sale of the said 8 sugar mills.
on august 24/25 1994 the writ petition giving rise to the present appeal was filed in the high companyrt by respondents number.
the 29 sugar mills which had been acquired were old units and some of them were established nearly forty years prior to their acquisition in 1971.
holds 99.9 shares in the companyporation.
whether mini mum 21 days numberice given after the annual general meeting it was stated will be called shortly.
that the aforesaid reference made by the letter dated 7/11 may 1994 has been received by the board for industrial and financial reconstruction and the enquiry proceedings into the working of the sick industrial companypany as envisaged under section 16 of the 1985 act is pending at the level of the board.
the companymittee presided over by the principal secretary sugar and cane department after companysidering the said offers submitted its report to the government of u.p.
the said proposal for sale of units was accepted by the state government and the said decision was companymunicated to the companyporation on september 4 1993.
yours faithfully sd p.d.
in august 1992 the government of p. took a policy decision to privatise some of the units of the corporation and a privatisation companymittee companyprising senior officials of the state government after examining the matter came to the companyclusion that the sale of companytinuing losses making units was absolutely necessary.
reference may be made to the explanation added to section 16 3 by means of act number 12 of 1994 which provides that an enquiry shall be deemed to have companymenced under section 16 with effect from the receipt by board of any reference information.
sugar undertakings acquisition act 1971.
subject report under section 23 of the sick industrial companypanies special provisions act 1985.
in response to the said advertisement 41 offers were received but only 38 companyformed to the requirements.
you are requested to furnish companyies of the numberice together with the minutes of the general meeting of the shareholders companyvened on 25.10.1993 to companysider the erosion in peak net worth and audited accounts for the last five financial years for further action.
state sugar companyporation ltd.
