Court : Supreme Court of India
Reported in : AIR1984SC1182; (1983)3CompLJ30(SC); [1983]144ITR225(SC); 1983(2)SCALE222; (1983)4SCC392; [1983]3SCR773
..... it is thus clear that both of the specified authority as well as the central government had come to the impugned conclusion by wrongly equating financial non-viability with basic non-viability and in complete disregard of the provisions of sections 370 and 371 of the companies act. ..... this is also made clear by the provision contained in clause (a) of sub-section (1) which states that the financial non-viability of the amalgamating company has to be judged by reference to 'its liabilities, losses and other relevant factors'.14. ..... press note dated 23rd february, 1981 and decide the question whether the impugned conclusion of the specified authority as well as the central government is liable to be interfered with or not by having regard to the true concept of financial non-viability as discussed above and applying the several tests or criteria mentioned in that behalf earlier.16. ..... counsel urged that apart from the aspect that the conclusion arrived at by the specified authority and the central government about the non-fulfilmentof the condition specified in clause (a) of sub-section (1) was such that no reasonable body of persons, properly informed, would come to, the same was also vitiated by (a) the adoption of a wrong approach to the true concept of 'financial non viability', and (b) having taken into account irrelevant and extraneous matters. .....
Tag this Judgment!Court : Delhi
Reported in : [1983]53CompCas409(Delhi); (1983)36CTR(Del)153; ILR1983Delhi856; [1983]141ITR174(Delhi)
..... the record shows that the aforementioned note on the concept of financial non-viability was placed before the specified authority and the central govt. ..... the statement is thus torn out of the context for the purpose of considering the financial non-viability immediately before the date of amalgamation, i.e. ..... the aforesaid note on 'the concept of financial non-viability' then mentioned that the ncaer identified four stages in the sickness process : (i) 'financial viability sound', i.e. ..... market value of the assets of itci could not be considered as a relevant material to the determination of the question of the financial non-viability of itci within the meaning of s. ..... the other condition regarding financial non-viability of the amalgamating company was established by the facts before the specified authority and the central ..... value of the assets of the amalgamating company, thereforee, cannot be considered as a relevant material to the determination of the question of financial non-viability of itci within the meaning of s. ..... the standard and criterion of financial non-viability as understood by the central ..... of the act discloses the following position with regard to the financial non-viability of itci as on 31st october, 1977 (i.e. ..... view may be held about the exchange ratio, but they cannot be suggestive of financial non-viability of the amalgamating company. ..... of the companies act, was specifically asked by the screening committee to submit an expert note on itci's financial non-viability'. .....
Tag this Judgment!Court : Delhi
Reported in : [1992]195ITR232(Delhi)
..... this being the true concept of financial non-viability as understood, by men of business and commerce and by financial institutions it is by reference to these several tests or criteria adopted by them that the question has to be decided whether a particular undertaking is financially non-viable at a given point of ..... an undertaking which is basically or potentially non- viable will ordinarily be incapable of revival and would face a closure; in other words, the financial non-viability spoken of by the section must refer to sickness brought about by temporary adverse financial circumstances that disabies' the unit to stand and work on ..... after referring to the same the court observed : '.....thatthe financial non-viability of an undertaking had been equated with the sickness of such undertaking and obviously in the context of its revival by a sound undertaking the sickness must be of a temporary character and not any basic or ..... (l) which states that the financial non-viability of the amalgamating company has to be judged by reference to 'its liabilities, losses and other ..... observed by the supreme court as follows: 'ncaer has further observed that where all the three parameters - profitability, liquidity and solvency - show positive figures the unit's financial viability will be sound; where one of the three parameters shows negative figure the unit could be regarded as 'tending towards sickness', when two of the three parameters show negative figures, it would be case of 'incipient .....
Tag this Judgment!Court : Delhi
Reported in : (1992)103CTR(Del)63; 46(1992)DLT463; 1992(22)DRJ270
..... also made clear by the provision contained in clause (a) of sub-section (1), which states that the financial non-viability of the amalgamating company has to be judged by reference to 'its liabilities, losses and other relevant ..... being the true concept of financial non-viability as understood by men of business and commerce and by financial institutions it is by reference to these several tests or criteria adopted by them that the question has to be decided whether a particular undertaking is financially non-viable at a given point ..... an undertaking which is basically or potentially non-viable will ordinarily be incapable of revival and would face a closure; in other words, the financial non-viability spoken of by the section must refer to sickness brought about by temporary adverse financial circumstances that disables the unit to stand and ..... that the financial non-viability of an undertaking has been equated with the 'sickness' of such undertaking and obviously in the context of its revival by a sound undertaking the sickness must be of a temporary character and not any ..... 241) : 'national council of applied economic research has further observed that where all the three parameters-profitability, liquidity and solvency - show positive figures, the unit's financial viability will be sound; where one of the three parameters shows a negative figure, the unit could be regarded as 'tending towards sickness'; when two of the three parameters show negative figures, it would be a case of .....
Tag this Judgment!Court : Supreme Court of India
Reported in : 1996IAD(SC)734; AIR1996SC960; I(1996)BC478(SC); [1996]87CompCas589(SC); [1996]218ITR140(SC); JT1996(1)SC1; 1996(1)SCALE57; (1996)1SCC683; [1996]1SCR31
..... provision contained in clause (a) of sub-section (1) which states that the financial non-viability of the amalgamating company has to be judged by reference to 'its liabilities ..... basically or potentially non-viable will ordinarily be incapable of revival and would face a closure; in other words, the financial non-viability spoken of by the section must refer to sickness brought about by temporary adverse financial circumstances that disables ..... the expression 'financial non-viability' has not been defined in the act but the finance minister's speech, the notes on clauses of the bill and the memorandum explaining the provisions thereof make it clear that the financial non-viability of an undertaking has been equated with the 'sickness' of such undertaking and obviously in the context of its revival by a sound undertaking the sickness ..... act as it will throw light on what was the mischief or situation that was intended to be remedied by its introduction as also the true concept of financial non-viability. ..... order thus :financial viability or non-viability is determined by ..... the central government, on the recommendation of the specified authority, is satisfied that the following conditions are fulfilled, namely :(a) the amalgamation company was not, immediately before such amalgamation, financially viable by reason of its liabilities, losses and other relevant factors;(b) the amalgamation was in the public interest; and(c) such other conditions as the central government may, by notification .....
Tag this Judgment!Court : Orissa
Reported in : 85(1998)CLT560; (1999)158CTR(Ori)298; [1999]235ITR574(Orissa)
..... on record that the central government has issued two guidelines on february 2, 1978 and february 23, 1981 in the said matter which indicate the test on which the financial non-viability would be judged and decided and what will be the test of public interest. ..... in special cases where the specified authority is satisfied that there is no reasonable scope for revival of the undertaking with its present product line and such diversification will be necessary for restoration of financial viability of the undertaking provided the amalgamating company has already obtained industrial licence for production of such new items, or where individual licence is not required for manufacture of such items.16. ..... the declaration of non-viability and public interest in that stage 4s binding in a declaration under section 72a(1) of the act unless the central government held that the ..... products manufactured by the sick unit ; employment given by the sick unit ; location of sick unit ; consequence of closure of the sick unit on the industrial ancillary unit having employment and identification of real cause of non-viability.'8. ..... the undertaking, in spite of its basic viability on account of various dependent or independent factors, may not be in a position to generate necessary financial resources to continue the business on an economical level, lack of finance may be acting as a detriment ;(iii) the central government and the special authority, therefore, are required by section 72a to gauge whether .....
Tag this Judgment!Court : Orissa
Reported in : [1992]195ITR539(Orissa)
..... the expression 'financial non-viability' has not been defined in the act ; but the finance minister's speech, the notes on clauses of the bill and the memorandum explaining the provisions of section 72a of the act make it clear that the financial non-viability of an undertaking has been equated with the 'sickness' of such undertaking and, obviously, in the context of its revival by a sound undertaking, the sickness must be of a temporary character and must not be a basic or permanent ..... put differently, the financial non-viability to which reference is made in the section must refer to sickness brought about by temporary adverse financial circumstances that have destabilised the unit to operate on its ..... , : [1983]144itr225(sc) , there are three statutory conditions which are to be fulfilled before entitlement to the benefits prescribed therein are to be available to the amalgamated company, namely--(i) the amalgamating company was, immediately before such amalgamation, financially non-viable by reason of its liabilities, losses and other relevant factors ; (ii) the amalgamation is in the public interest ; and (iii) such other conditions as the central government may, by notification in the official gazette, specify, to ensure ..... the products manufactured by the sick unit ; employment given by the sick unit ; location of the sick unit ; consequences of closure of the sick unit on the industrial ancillary unit having employment and identification of real cause of non-viability.9. .....
Tag this Judgment!Court : Customs Excise and Service Tax Appellate Tribunal CESTAT Calcutta
Reported in : (1987)(14)ECC456
..... however, construing the expression "financial non-viability" occurring in section 72a of the income tax act, 1961 the hon'ble supreme court in (1983) 4 scc 392 (c. i. t. v. ..... or the immediate pecuniary hardship that may be caused to the applicants, in case a deposit were to be made is, really, of no relevance at all in the light of the hon'ble supreme court's order in the spencer case; (b) while it may be that, financially speaking, the deposit of the aforesaid amounts would not cause any hardship whatsoever--much less undue hardship--to the applicants, that is not the criterion for adjudging "undue hardship" in section 35f of the act. ..... ) cited with approval the incidents of "financial viability" furnished by ncaer (national council of applied economic research) in a study of industrial sickness in 1979, thus"financial viability consists of three interdependent elements of equal emphasis and weight, viz. ..... collector of central excise calcutta, reported in (1986) 23 elt 234 where the tribunal had held that while disposing of an application for dispensing with deposit of duty or for stay not only financial hardship, but other relevant factors like merits of the case should be gone through and prima facie case looked into. ..... the belief that a correct interpretation of section 35f allows considera tions of factors other than financial hardship, is further strengthened by the tribunal's 3-member bench-special bench a's order in the case of sonodyne television co. v. .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1996)57ITD286(Mad.)
..... this being the three concept of financial non-viability as understood by men of business and commerce and financial institutions it was by reference to the several tests or criteria adopted by them that the question whether a particular undertaking was financially non-viable at a given point of time ..... considering the objects of the assessee-company and the substantial nature of the interest it held in the loanee company and the commitment it had given to the financial institution for purposes of obtaining facilities for the loanee company, we hold that the assessee-company was guided by the dictates of commercial expediency in not charging interest on ..... if they showed positive figures the unit's financial viability would be sound; where one of the three aspects showed a negative figure the unit could be regarded as 'tending towards sickness'; when two of the three aspects showed negative figures, it would be a ..... by the company in your favour and you will be at liberty to take such action against us and/or the company as may be deemed fit by you.such is the undertaking given by the assessee-company to the financial institution in respect of loans and advances granted to unitel communications ltd. ..... it was explained before the assessing officer that the financial position of unitel communication's limited was in a precarious condition and as the assessee is one of the major shareholders, at the request of the borrower and on ground of commercial expediency interest was not charged .....
Tag this Judgment!Court : Chennai
Reported in : (1996)56TTJ(Mad)628
..... this being the three concept of financial non-viability as understood by men of business and commerce and financial institutions it was by reference to the several tests or criteria adopted by them that the question whether a particular undertaking was financially non-viable at a given point of time, had to be decided ..... considering the objects of the assessee-company and the substantial nature of the interest it held in the loanee company and the commitment it had given to the financial institution for purposes of obtaining facilities for the loanee company, we hold that the assessee-company was guided by the dictates of commercial expediency in not charging interest on its loans to unitel communications ..... if they showed positive figures the units financial viability would be sound; where one of the three aspects showed a negative figure the unit could be regarded as tending towards sickness; when two of the three aspects showed negative figures, it would be a case of incipient sickness ..... such is the undertaking given by the assessee-company to the financial institution in respect of loans and advances granted to unitel communications ..... the other company, namely, unitel communications was not financially viable and was facing resource crunch as seen from the balance sheet produced before ..... addition, the cit(a) on a scrutiny of the balance sheet of the assessee-company held that the assessee did not have any non-interest bearing funds from out of which the advances could have been made. .....
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