BANK OF NEW YORK MELLON LONDON BRANCH versus ZENITH INFOTECH LIMITED

Citation: [2017] 2 S.C.R. 415 · Decided: 21-02-2017 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Disposed off

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Judgment (excerpt)

[2017] 2 S.C.R. 415 
BANK OF NEW YORK MELLON LONDON BRANCH 
A 
v. 
ZENITH INFOTECH LIMITED 
(Civil Appeal No. 3055of2017) 
FEBRUARY 21, 2017 
[RANJAN GOGOi AND ABHAY MANOHAR SAPRE, JJ.] 
Sick Industrial Companies (Special Provisions) Act, 1985 -
ss. 15, 3(e), 3(j) - Board for Industrial and Financial Reconstruction 
Regulations, 1987 - Regns. 19(5), (4) _:Registration of the 
Reference under SICA - Scope - Power and jurisdiction of the 
Registrar and Secretary to refuse registration of the application for 
reference by the Company - On facts, application for registration 
of Reference by respondent no. l company - Dismissal of, by 
Registrar, Secretary and Chairman of the Board, on the ground 
that respondent no. 1 company was not an industrial company within 
the meaning of s. 3(e), (j) - Meanwhile, order of winding up of 
respondent no. I-Company by the High Court, upheld by the Division 
Bench - Subsequently, respondent-company challenged the orders 
of the Secretary and Chairman of the Board rejecting the application 
for Reference - High Court held that the Registrar and the Secretary 
and the Chairman of the Board not conferred any power of 
adjudication and as registration of the Reference was refused on 
that basis, the said orders non est in law; and that the winding up 
order passed by the Company Court would not foreclose the 
proceedings under the SICA, and registration of Reference and 
inquiry can still be made - On appeal, held: Power to "scrutinize" 
an application prior to registration thereof and thereafter to register 
and place the same before the Bench vests in the Registrar or the 
Secretary of the Board - Power of scrutiny cannot be understood 
to be vesting in any of the authorities the power to adjudicate the 
question as to whether a company is an industrial company within 
the meaning of s. 3(e) read with 3(/) and 3(n) - Rejection of the 
question could have been made only by a process of adjudication, 
vested by SICA and the Regulations framed thereunder in a Bench 
of the Board - High Court was correct in holding that the refusal of 
registration of the reference sought by the respondent Company by 
415 
B 
c 
D 
E 
F 
G 
H 
416 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017) 2 S.C.R. 
the Registrar, Secretary/Chairman of the Board was non-est in lmv -
Reference must, thus, understood to be pending before the Board 
on the relevant date attracting the provisions of s. 252 of the 
Insolvency and Bankruptcy Code - In view thereof the question 
whether reference before the Board stood foreclosed by the order 
of winding up of the respondent company and the appointment of 
the liquidator becomes redundant - Respondent open to seek 
remedies uls. 252 r!w ss. 13, 14, 20 and 25. 
Disposing of the appeal, the Court 
HELD: 1.1 From the provisions of Regulation 19(5) of 
the Board for Industrial and Financial Reconstruction Regulations, 
1987 it would appear that on receipt of a Reference under 
Regulation 19(4) the Secretary or the Registrar, as may be, after 
making an endorsement of the date on which the same has been 
received in the office of the Board Is required to make a scrutiny 
and, thereafter, if found to be in order, to register the same; assign 
a serial number thereto and place the same before the Chairman 
for being assigned to a Bench. After completion of the said 
exercise under Regulation 19(5) the later part of the said 
Regulation contemplates that simultaneously, remaining 
information/documents required, if any, may be called for from 
the applicant. Regulation 20 contained in Chapter III and 
Regulation 21 contained in Chapter IV deal with the manner in 
which the proceedings of inquiry after registration of the 
Reference is to be made. [Para 16] [428-G-H; 429-A-B] 
1.2 Regulation 19(5) requires the Registrar or the 
Secretary, as may be, to make an endorsement of the date of 
receipt of the Reference [Regulation 19(4)] and thereafter, on 
scrutiny thereof to register the same and place before the 
Chairman for being referred to the Bench. When the Regulations 
framed under the statute vests in the Registrar or the Secretary 
of the Board the power to "scrutinize" an application prior to 
registration thereof and thereafter, to register and place the same 
before the Bench, it cannot be seen bow such power of scrutiny 
can be understood to be vesting in any of the said authorities the 
power to adjudicate the question as to whether a company is an 
industrial company

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