YASH DEEP TREXIM PRIVATE LIMITED versus NAMOKAR VINIMAY PVT. LTD. & ORS.

Citation: [2013] 10 S.C.R. 366 · Decided: 23-09-2013 · Supreme Court of India · Bench: P. SATHASIVAM · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
[2013] 10 S.C.R. 366 
YASH DEEP TREXIM PRIVATE LIMITED 
v. 
NAMOKAR VINIMAY PVT. LTD. & ORS. 
(Civil Appeal Nos.8440-8445 of 2013 etc.) 
SEPTEMBER 23, 2013 
[P. SATHASIVAM, CJI AND RANJAN GOGOi, JJ.] 
Sick Industrial Companies (Special Provisions) Act, 1985 
- s.3(o) - Applicability of the Act - To the foreign companies 
C registered in India - Held: In view of object and scheme of the 
Act and the financial health of the company in question, the 
company does not fall within ambit of expression 'sick 
industrial company' defined uls. 3(o) - Hence provisions of the 
Act does not apply - The question whether the Act applies to 
D foreign companies registered in India, is left open. 
The main question for consideration in the present 
appeals was whether the provisions of the Sick Industrial 
Companies (Special Provisions) Act, 1985 are applicable 
E to the 'foreign companies' registered in India un.der the 
provisions of s.591 of the Companies Act, 19~ and 
therefore, the revival scheme framed by the Board for 
industrial and Financial Reconstruction, in respect of the 
respondent-Company, was required to be implemented. 
In addition to the main question, various other 
F contentious issues with regard to the rights of one group 
of shareholders or the others to be in the control of the 
management of the Company were also raised. 
G 
H 
Disposing of the appeals, the Court 
HELD: The Act was enacted to overcome the grossly 
inadequate 
and 
time 
consuming 
institutional 
arrangements that were then in place for revival and 
rehabilitation of sick industrial companies. The Act was 
366 
YASH DEEP TREXIM PRIVATE LIMITED v. 
367 
NAMOKAR VIN I MAY PVT. LTD. & ORS. 
brought into force to provide timely identification, by an 
A 
expert body, of sick industrial companies and to design 
suitable rehabilitation packages in order to obviate the 
enormous loss that would be occasioned by such units 
going permanently out of business. The Act has cast 
upon the BIFR the duty to cause a detailed inquiry to be 
B 
made into the functioning of any sick industrial company 
and to take steps to revive the functioning of such 
company failing which to refer the cases of such 
companies to the jurisdictional High Court for winding up 
in accord\ance with the provisions of the Companies Act. c 
[Para 7] [375-H; 376-A-E] 
2 .. In the present case the entitlement of the 
respondent company to receive a total amount of Rs.170 
crores (approximately) by way of acquisition 
compensation and the payment of Rs.95 crores by NHAI 
D 
which is presently lying in deposit with the Registrar of 
the Calcutta High Court is not in dispute. That the 
respondent company would be left with a surplus of 
about Rs.50 crores after meeting all its losses and 
liabilities is a common ground amongst all the contesting 
E 
parties. The rehabilitation scheme framed by the Board 
by its order dated 04.10.1999 is yet to be implemented. 
In the aforesaid situation keeping in view the object and 
scheme of the Act and the virtual consensus of the 
contesting parties with regard to the present financial 
F 
health of the respondent company, it is clear that the 
company can no longer fall within the ambit of the 
expression "sick industrial company" as defined .in 
Section 3(o) of the Act. Further applicability of the Act to 
the respondent company, therefore, does not arise. [Para 
G 
8] [377 -A-D] 
3. Since the respondent-company no longer falls 
within the ambit of a 'sick industrial company' as defined 
by Section 3(o) of the Act and the Act has ceased to apply 
H 
368 
SUPREME COURT REPORTS 
[2013] 10 S.C.R. 
A to the company and the rehabilitation package worked 
out by the Board has not yet been implemented, the 
question(s) arising in the present appeals have become 
academic and redundant Hence, the said question(s) left 
open for determination in an appropriate case and as and 
B when the occasion would arise. [Para 9] 377-E-F] 
4. This Court exercising jurisdiction under Article 136 
of the Constitution is not the appropriate forum to 
adjudicate grievances/claims with regard to the right of 
management of the affairs of the company by one group 
C of shareholders or the other. Several contentious issues 
with regard to the rights of one group of shareholders or 
the other to be in control of the management of the 
Company had been raised and some of such claims are 
still pending before the High Court. Coupled with the 
D above is the pendency of s
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