The interpretation of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1984, (SICA) and the Companies Act, 1956, recently arose before the Supreme Court of India in Tata Motors Ltd v Pharmaceutical Products of India Ltd and Ors. The judgment explained that a high court had no jurisdiction to sanction a scheme of arrangement presented by a sick company if the company’s revival scheme was pending before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). In this case, Pharmaceutical Products (PPI) had taken a loan from Tata Motors and failed to repay it. The matter went to arbitration and an award was passed in favour of Tata Motors.
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The update of court judgments is compiled by Bhasin & Co, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
