Bombay High Court Considers Validity of AAIFR Order Setting Aside BIFR's Exclusion of ULC Land from Sick Company's Rehabilitation Scheme. The Court Examines Whether the Remand for Modification Was Justified Under SICA and ULC Provisions.

Writ Petition under Article 226 of the Constitution of India challenging the order of AAIFR dated 01.07.2011

To set aside the impugned AAIFR order and uphold the BIFR order dated 09.04.2010 in so far as it directed the State of Maharashtra to waive ULC limitations and facilitate transfer of land to the petitioner

The AAIFR set aside parts of the BIFR order that had directed the State to facilitate land transfer without ULC hindrances and instead remanded the matter for modification of the rehabilitation scheme to exclude ULC-affected land, thereby adversely affecting the petitioner's rights under the sanctioned scheme

BIFR order dated 09.04.2010 permitting demerger and transfer of land; AAIFR order dated 01.07.2011 setting aside sub-paras (i) and (ii) of para 7.5 and remanding for modification; earlier exemption order dated 21.03.1981 under ULC; notifications under Sections 10(1) and 10(3) of ULC dated 11.03.2004 and 16.05.2005

The Petitioner, by this Petition under Article 226 of the Constitution of India takes exception to the order dated 1st July 2011 (majority opinion) passed by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) which, on an appeal by the State of Maharashtra, sets aside sub paras (i), (ii) of para 7.5 of the order dated 9.4.2010 passed by the Board for Industrial and Financial Reconstruction (BIFR) and remands the case to BIFR with a direction to initiate the process for modification of rehabilitation scheme concerning M/s. Khatau Makhanji Spinning & Weaving Co.Ltd. (KMSW) in terms of Section 18(5) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) for exclusion of the land affected by notices/ orders/ action under the Urban Land Ceiling Act, 1976 (ULC) and its transfer to Swayam Realtors and Traders LLP (SRTL), the Petitioner herein, in pursuance of demerger and to provide for consequential changes. The land exempted under this exemption order shall be used by the said person for his own benefit for the purpose of Industry and for no other purpose. Any change made in the user of the land shall amount to a breach of these conditions; He shall commence building construction within a period of one year from the date of this exemption order and shall complete the construction within a period of five/ten/fifteen years from the date, failing which the exemption stands withdrawn. Upon payments of workers dues by SRTL, GoM to agree to grant permission for closure of Mumbai units and facilitate development of land by the de-merged Company (SRTL) in accordance with DCR 58 framed for the purpose.

21.03.1981: Exemption order under Section 20 of ULC issued for subject property, with conditions. 15.06.1994: Extension of time to commence construction. 23.04.1997: Amendment permitting setting up of industrial estate. 11.03.2004: Notification under Section 10(1) of ULC for acquisition. 16.05.2005: Notification under Section 10(3) declaring land vested in State. 07.09.2006: KMSW's representation against notifications; appeal under Section 34 of ULC. 01.12.2007: Appeals abated on coming into force of Urban Land (Ceiling and Regulation) Repeal Act, 1999 in Maharashtra. 11.07.2007: BIFR sanctions rehabilitation scheme. 09.04.2010: BIFR order, including para 7.5 directions to State. 01.07.2011: AAIFR sets aside parts of BIFR order and remands for modification. 2012: Writ Petition No. 8816 of 2012 filed. 10.02.2014: Judgment reserved. 28.02.2014: Judgment pronounced.

• Constitution of India, 1950: Article 226
• Sick Industrial Companies (Special Provisions) Act, 1985: Section 18(5)
• Urban Land (Ceiling and Regulation) Act, 1976: Sections 20, 10(1), 10(3), 34
• Urban Land (Ceiling and Regulation) Repeal Act, 1999:
• Limited Liability Partnership Act, 2008: