The plea was dismissed when VIL rejected the AAFIR's offer to acquire the equity of UCPTL at Rs 60 per share. The VIL, in any case, would have been under an obligation to buyback at Rs 60 per share, if it had not failed to perform its obligation as an associate of BPL during 1996-96 when the revival package was sanctioned for UCPTL.

``It is obvious that if the appellant (VIL) had fulfilled its obligation to acquire equity at par during the year 1996-97, there would have been some problem in the fulfilment of the appellant's obligation to acquire further shares by way of buyback at Rs 60 per share....We do not see any merit in the appeal,'' an AAFIR bench,comprising acting chairman MS Dayal and member JK Bagchi, concluded at a hearing recently.

Despite claim to the contrary, VIL appealed against the Board for Industrial and Financial Reconstruction's (BIFR) refusal to VIL from joining hands with BPL in the revival of UCPTL. The BIFR had given no reprieve to VIL following its failure to meet the obligations laid down in the sanctioned scheme.

The scheme had said BPL and associates would contribute to the equity of UCPTL at par as follows: 193.4 lakh shares to be taken by BPL by infusing Rs 19.34 crore, 75 lakh shares by VIL by bringing Rs 7.5 crore, 37.5 lakh shares by Toshiba by investing Rs 3.75 crore. Moreover, the scheme had cast an obligation on BPL to provide any shortfalls in the undertakings by BPL and associates.

VIL contended that it was willing to contribute to acquire 75 lakh shares of UCPTL at par by paying interest for delay as envisaged in para 6.7 of the sanctioned scheme. However, the authority did not find any merit in the contention asthe particular para pertains to penal interest at 2 per cent per annum in case of default in payment of interest or principal on due dates to the secured creditors.

The electronics major further said it had shown its ``readiness and willingness to subscribe to its share of the equity contribution as envisaged in the sanctioned scheme'' by writing letters to BPL and UCPTL.

The company said it had to approach BIFR as BPL did not reply to its request for the allotment of shares and claimed that it would have made the Rs 7.5-crore payment immediately on receipt of the allotment.

The AAFIR observed it is obvious that by writing letters to BPL and UCPTL, VIL was ``either trying to wriggle out of its nominees as directors as a quid pro quo for its contribution to the equity of UCPTL. It is obvious that any reply by BPL or UCPTL to the appellant's reply would have only resulted in further litigation.''

The authority held VIL's claims as ``not tenable'' as the allotment of shares could not be expected beforemaking the payment. ``The allocation to make the shares in the sanctioned scheme was itself a firm allotment. There was no question of receiving any further communcation from BPL or UCPTL, confirming the allotment of 75 lakh shares to the appellant,'' the AAFIR bench said.

Further, the bench held that VIL has no locus standi to make any grievance in regard to the monitoring of the scheme and fulfilment or non-fulfilment of obligations by other parties.