WP/5394/2006 of P.R. Cements Limited, a company incorporated under Vs The Appellate Authority for Industrial and Financial on 27 December 2007

IN THE HIGH COURT OF JUDICATURE OFANDHRA PRADESHAT HYDERABAD

THE HON’BLE MRS. JUSTICE T.MEENA KUMARIAND

THE HON’BLE MS. JUSTICE G.ROHINI

WP MP No. 27549 of 2007AND

WRIT PETITION NO.5394 OF 2006

Dated : December 27, 2007

Between:

P.R. Cements Limited,29-13-28, Kaleswar Rao Road,Suryaraopet, Vijayawada,Rep. By its Managing DirectorDr.K.S.N. Prasad.

Petitioner

AND

The Appellate Authority for Industrial

And Financial Reconstruction,25, Kasturba Gandhi Marg,New Delhi –1,Rep.by its Registrar and others Respondents THE HON’BLE MRS. JUSTICE T.MEENA KUMARIAND

THE HON’BLE MS. JUSTICE G.ROHINI

WP MP No. 27549 of 2007

AND

ORAL ORDER:(per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI)

Seeking a writ of certiorari calling for the records ofthe second respondent connected with the proceedingsunder Reference Case No.57 of 2000 dated 12.1.2004 asconfirmed by the 1[st] respondent under Appeal No. 40 of2004 dated 27.9.2005 and to declare the same asunenforceable, arbitrary and ultravires the Sick IndustrialCompanies (Special Provisions Act), 1985 andconsequently to quash the same, the petitioner filed thiswrit petition.

The petitioner company was set up as a PublicLimited Company in the year 1985 and the project wascommissioned with the financial assistance fromrespondents 4 to 7 and it went into commercial productionin September, 1991. The Company took up expansion ofits business with the financial assistance of IFCI during1996-97, but with the passage of time, the companysuffered financial crisis resulting in lower capacityutilisation and which ultimately led to cash losses leadingto erosion of complete net worth by the end of the year1999. As such, the petitioner company made a referenceto the second respondent herein under Sec. 15 of theSick Industrial Companies Act, 1985, which wasregistered as 57 of 2000. The Board for Industrial Financial and Reconstruction, in its meeting dated22.6.2000 declared the petitioner company as a SickIndustrial Company and appointed the sixth respondentas the Operating Agency. The proposals submitted by thepetitioner company for rehabilitation were rejected.Subsequently, certain promoters submitted acomprehensive rehabilitation proposal with EMD paymentof Rs.25.00 lakhs, which was also not accepted.Ultimately, in reply to the letter written by the petitionerdated 16.8.2003, the second respondent issued a showcause notice dated 29.10.2003 asking why the petitionercompany should not be wound up. It is averred by thepetitioner that in the meeting held on 12.1.2004, M/s.Annapurna Enterprises, who requested for their presencein the meeting to present their views on rehabilitation,were not allowed and the second respondent passedorders under Sec. 20(1) of the Sick Industrial CompaniesAct, 1985.

Aggrieved thereby, the petitioner company filedappeal being 40 of 2004, before the first respondent,which also was dismissed by order dated 27.9.2005confirming the order dated 12.1.2004 passed by thesecond respondent, which is assailed in this writ petition.

On 19.10.2006, when this writ petition has come upfor hearing, since none appeared for the petitioner, the writpetition was dismissed in dafault.

Now WP MP No. 27549 of 2007 is filed seeking toset aside the default order dated 19.10.2006 and torestore the writ petition.

Conclusion

When the above miscellaneous application wastaken up for hearing on 11.12.2007, except respondentNo.1, there was no representation on behalf of the otherrespondents. Therefore, the matter was directed to beposted on 13.12.2007, on which date also there was norepresentation and it stood adjourned to 19.12.2007.From 19.12.2007, it was adjourned to 24.12.2007. On24.12.2007 also, none of the respondents appeared northere was any representation on their behalf. Learnedcounsel for the petitioner submits that notice has beenissued to all the respondents and they have received thesame, as is evident from the original of the said notice filedin WP(USR) No. 12601 of 2007. Consequently, the aboveMiscellaneous Application is ordered and the Writ Petitionis restored.

Heard learned counsel for the petitioner. Since thereis no representation on behalf of the respondents, thematter is being heard and decided on the materialavailable on record.

The learned counsel for the petitioner contends thatthe order dated 27.9.2005 made in Appeal No. 40 of 2004by the first respondent confirming the order dated12.1.2004 passed by the second respondent, is not a speaking order. It is further contended that since the firstrespondent has not adverted to merits of the case andpassed the impugned order without affording anopportunity to the petitioner, the same may be remandedback for consideration afresh after affording anopportunity to the petitioner to put forth their case.

Evidently, the order dated 27.9.2005 passed inAppeal No. 40 of 2004 by the first respondent, is not onmerits inasmuch as none appeared on behalf of thepetitioner herein before the first respondent. Therefore,without adverting to various contentious issues raised inthis writ petition, we set aside the order dated 27.9.2005passed by the first respondent in Appeal No. 40 of 2004and remand the same to the first respondent for disposalafresh, on merits, after affording an opportunity to thepetitioner herein, within a period of three months from thedate of receipt of a copy of this order.

With the above direction, the writ petition standsdisposed of. No order as to costs.

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T.MEENA KUMARI, J.

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G.ROHINI, J.