Delhi High Court
Indian Steel And Wire Products vs The B.I.F.R. And Ors. on 10 December, 2003
Equivalent citations: II(2004)BC548, 110(2004)DLT186, 2004(73)DRJ71
Author: Dalveer Bhandari
Bench: Dalveer Bhandari, H.R. Malhotra
JUDGMENT Dalveer Bhandari, J.
1. The Indian Steel & Wire Products Limited filed this petition with the prayer that the order dated 25.7.2003 passed by the The Board of Industrial & Financial Reconstruction (in short `BIFR') be quashed/set aside. It may be pertinent to mention that the BIFR after hearing all sides for over two years had accepted the revised proposal submitted by respondent No.13/Tata Iron & Steel Company Limited (in short `TISCO'). All the creditors also accepted the proposal. According to that proposal, apart from TISCO's outstanding dues of Rs.20 crores which TISCO has to recover from others, TISCO has undertaken to further invest an amount of about Rs.38 crores. In other words, the proposal of TISCO was to invest in all at least Rs.58 crores. This offer of TISCO was accepted by the secured creditors.
2. After respondent No.13's offer was accepted this petition was filed in this court in which it was mentioned that the petitioner's offer was not considered in the proper perspective by the BIFR though the petitioner's offer was as good as the offer of respondent No.13, if not better. Impression given to the court was that the petitioner is not as large as respondent No.13, therefore, its offer was not considered seriously. Mr.Rajiv Nayyar, learned senior counsel for the petitioner, submitted that the petitioner was and still is prepared to match fully tied up proposal/scheme line by line and would also invest at least Rs.58 crores within the same period as provided to TISCO. The grievance which has been made out by the petitioner is that its offer has not even been considered in the proper perspective because respondent No.13 is a giant organization in its comparison.
3. Mr. Rajiv Nayyar, learned senior counsel for the petitioner, on instructions from the petitioner, also submitted that to demonstrate its bona fides, the petitioner company is prepared to deposit the title deeds of 17 Tughlaq Road, New Delhi premises (value of this property is much more than what the value of the entire offer of TISCO) and a banker's cheque of Rs.5 crores within a period of two weeks with the BIFR. The offer reflected seriousness of the petitioner. We were given the impression that the petitioner was perhaps not treated equally and fairly. In order to ensure that the petitioner is given proper hearing and its proposal is considered in proper perspective in the interest of the petitioner and its creditors, we thought it appropriate to consider the proposal of the petitioner de novo provided the petitioner is absolutely serious about its offer. Therefore, in our order dated 29.10.2003, we made it abundantly clear that in the event the amount as undertaken is not deposited, the BIFR shall not consider the new proposal of the petitioner or fully tied up scheme submitted by the petitioner company. Learned counsel for the petitioner submitted that in case the petitioner fails to submit fully tied up proposal/scheme matching the proposal/scheme of TISCO, the amount of Rs.5 crores be forfeited and this amount be distributed towards the arrears of the wages of the workers. We also entertained the faint hope that in case, on BIFR's directions, if TISCO decides to further improve its existing offer, then it would better serve the interest of all concernes and in that eventuality the amount of Rs.5 crores deposited by the petitioner's company along with the title deeds shall be returned to the petitioner.
4. On 29th October 2003, when we passed the order we ourselves were not absolutely certain whether the petitioner would in fact deposit Rs.5 crores and the title deeds of 17, Tughlaq Road premises but to erase the impression of unfair treatment and to ensure full justice to the petitioner, we made the said order. While making the order, we also had some hope that in case the petitioner gives a matching offer, in that event TISCO may improve its existing offer, which in fact would be eventually in the interest of workers and other creditors.
5. Today to our utter dismay and surprise the learned counsel for the petitioner, instead of complying with the undertaking given to the court on 29.10.2003, now craves leave of the court to withdraw this writ petition. Ordinarily this court grants permission to the party to withdraw its petition at any stage. The question arises whether such an indulgence be granted to a party who has abused the entire process of law? Now it is absolutely clear that the offer and undertaking of the petitioner company was not bona fide. The petitioner company has not approached the court with clean hands. The sole purpose of filing of this petition was to sabotage the proposal/scheme of TISCO, which was accepted by the BIFR. The petitioner company's false offer and undertaking have delayed the implementation of the scheme and the interests of the workers & other creditors have suffered. We strongly deprecate this practice. This tendency needs to be strongly discouraged and effectively curbed so in future the petitioner and such like litigants should not gather the courage of abusing the process of law for ulterior motives and extraneous considerations. Such motivated petitions pollute the entire legal and judicial process which seriously affect the credibility of the system.
6. Respondent No.13/TISCO has filed affidavit dated 8.12.2003 which amply reflect the conduct of the petitioner. The relevant portion of the affidavit is reproduced as under:
" The fact that the current promoters of the petitioner company have also made false statement before this Hon'ble Court and/or has misled this Hon'ble Court will be further evident from the fact that despite having professed to deposit the title deeds of premises No.17, Tughlaq Road, Delhi before the BIFR by 12.11.2003, the current promoters of the petitioner company knew very well that they could not produce such registered documents since the said premises is the subject matter of a partition suit pending before this Hon'ble Court as also the subject matter of an application pending before the Hon'ble Company Law Board wherein the other co-owners of the said property have made serious allegations against Sardar Ravi Inder Singh, the Managing Director of the petitioner company of embezzlement and misuse of family assets and an order of injunction has been passed and hence the offer to deposit such deed was made to mislead this Hon'ble Court and to gain time."
7. It is really unfortunate that an undertaking to deposit the title deed of 17, Tughlaq Road, New Delhi was given to the court which the petitioner in fact did not possess. The petitioner gave an undertaking of depositing Rs.5 crores without in fact any intention of depositing the amount. The false undertaking and offer were designed to accomplish ulterior motives.
8. The petitioner has totally abused the process of the court. The petitioner deliberately gave inaccurate, untrue and misleading undertaking to this court for extraneous considerations. Such petitioners forfeit all claims to the exercise of discretion in its favor under Article 226 of the Constitution of India. We strongly deprecate the practice of filing such type of frivolous petition. The petitioner is guilty of deliberately creating obstruction in the implementation of the approved scheme of respondent No.15. Because of this approach of the petitioner even the interests of the workers, creditors and others have adversely suffered.
9. In pursuance to our notice, respondent Nos.5,11,13 & 15 have appeared before us. These respondents had to unnecessarily incur costs to contest such a frivolous petition. In our considered opinion at least those respondents who have appeared and contested this litigation and incurred costs must be compensated to some extent. On consideration of the totality of the facts and circumstances and in the interest of justice and fair play, we deem it appropriate to direct that each of the respondents who appeared in pursuance of our notice (respondent Nos.5,11,13 & 15) be paid costs of Rs.25,000/- within three weeks from today by the petitioner company.
10. The leave as prayed is granted to the petitioner and the writ petition is dismissed as withdrawn subject to the aforesaid condition.
11. Needless to say that the BIFR would now proceed in the matter as expeditiously as possible in accordance with law.