Hole in Delhi takeover pot

Sambit Saha, TT, Calcutta, Feb. 6: Proof of how outdated the Narendra Modi government's drive to take over tea gardens is has been unwittingly provided by the Centre itself.

The Board for Industrial and Financial Reconstruction (BIFR), the business sickbay whose approval is required for the takeover of six of the seven G.P. Goenka gardens marked out by the Centre, exists only on paper now and is being readied for burial.

The BIFR, which is dealing with Duncans Industries that ran the six gardens, used to function with two members and a chairman. It has not heard any matter since October 28, 2015, as no member remains on board. All three posts are lying vacant after chairman J.P. Dua retired on January 22.

In spite of a nudge from Delhi High Court to fill the posts so that urgent matters can be addressed, the Centre has not done so till now because the BIFR itself is on its way out - a departure that is unlikely to be mourned because of a perception that the board has mostly prolonged the life of sick companies at the cost of the taxpayer. A view also exists that several promoters use the sickbay to escape legal action for loan recovery.

Against such a backdrop, a plan has been mooted to replace the BIFR with a new mechanism under the Insolvency and Bankruptcy Code, which was tabled in December and is awaiting Parliament's nod. If and when the code is passed, the BIFR will be replaced by the National Company Law Tribunal.

But the upshot, as far as the six tea gardens in north Bengal are concerned, is that the estates' fate - and that of over 15,000 workers - is now mired in uncertainty. The takeover has already become a nobody's baby with the Bengal government yesterday rejecting the Tea Board of India's request to intervene to ensure the operation of the gardens until the red tape is unravelled.

The Tea Board has made it clear that it can take control of the gardens only after approval from the BIFR, which, as it turns out, exists only in name now.

The Duncans matter was last heard by the BIFR on September 9, 2015. The company is under the board's purview from 2006.

The Sick Industrial Companies Act, which governs the BIFR, supersedes the Tea Act under which the Union commerce ministry had issued the notification to take over the gardens. It is because of this that the BIFR's approval is needed for the takeover.

A team from the Tea Board is likely to visit Delhi next week to explore options, sources said.

Asked why the ministry pushed ahead with the takeover plan although the BIFR is in limbo, Union minister of state for commerce Nirmala Sitharaman told The Telegraph: "I do not want to get into the procedural issues. We are trying to sort out the issues and find a solution in the interest of workers. Since the BIFR is non-functional, the Centre can approach the high court and get a directive for taking over the tea estates."

However, Sanjay Basu of Acquilaw, a legal firm, said in response to a question from this newspaper: "A court may or may not hear the matter. It is discretionary, compared to the BIFR, where it is statutory (to hear the matter)."

The Duncans legal challenge to the takeover is also pending in Calcutta High Court.

Additional reporting by R. Suryamurthy