VIL expressed willingness to contribute Rs 7.5 crore in the sick company and sought to induct two of its directors on BDDL's board.

BPL Ltd opposed VIL's bid on the ground that VIL failed to contribute Rs 7.5 crore immediately on sanctioning the rehabilitation scheme in April 1996 or within the time schedule.

Despite being aware of its obligations towards the sick company, VIL did not pump in the requisite funds on fears whether the sick company would ever revive, BPL alleged at a review hearing of the Board for Industrial and Financial Reconstruction (BIFR).

According to the sanctioned scheme, BPL and its associates were to contribute a sum of Rs 71.25 crore within a time bound schedule to meet a part of the cost of the scheme. BPL was recognised as the propounder of the scheme and the obligation to fulfil anyshortfall towards the funds to be infused had to be met by BPL which they had done.

The sanctioned scheme had envisaged that fresh equity would be raised in BDDL with BPL taking up 1.934 crore shares at par by bringing in Rs 19.34 crore, VIL taking up 75 lakh shares at par by birning in Rs 7.5 crore and toshiba taking up 37.5 lakh shares at par by bringing in Rs 3.75 crore.

Videocon submitted that it had written letters to both BPL and Uptron Picture Tubes requesting for expeditious steps to be taken for inducting its share of Rs 7.5 crore. At the same time, the company said that it has not deposited the money either by cash or cheque on or before the required date - March 31, 1997.

At the same time, VIL referred to an agreement dated November 11, 1994 signed between the chairmen of BPL and VIL indicating that out of the total equity of Rs 51.9 crore, BPL's share would be 51.25 per cent and that of VIL 10.02 per cent.

The agreement also included the provision that VIL would not seek further equity inany future equity issue nor take any guarantees or make any further investment other than the present equity.

Moreover, VIL would have two directors in UCPTL even as BPL would have management control.

BPL, terming VIL's demand for inclusion of two of its directors in the board of directors of the sick company as an `impossible proposition', pointed out the agreement did not form a part of the sanctioned scheme. Not one para of the agreement, including that relating to equity structure, was made a part of the sanctioned scheme, BPL counsel Alok Dhir contended.

Since VIL and Toshiba did not fulfil their financial obligations according to the sanctioned scheme, there was no obligation on the part of the sick company to solicit the contribution from VIL.

"VIL quietly waited for more than a year ignoring their obligation cast upon them by the sanctioned rehabilitation scheme for the very reason of risk factor, but came later after knowing fully that the propounder promoter could successfully implement toenable the sick industrial company to start the industrial undertaking as envisaged in the scheme," BPL pointed out.

The sick company submitted that the only way in which any other party can now be allowed to subscribe to the equity was by making a substantial modification to the sanctioned scheme or changing the sanctioned scheme in accordance with the provisions contained in sub section (5) and (6) of section 18 of Sica.

On hearing the submisssions from all parties, the board reserved its order for a later date.