BIFR Judgments

BIFR Judgments

2001 SCCL.COM 697(Case/Appeal No: Civil Appeal Nos. 6734-6745 of 2000 (with C.A. Nos. 6746/2000, 6750/2000, 6747/2000, 6748/2000 & 6749/2000))
Government of Andhra Pradesh and others Appellants Vs. V.S.R. Murthy and others Respondents, decided on 9/18/2001.
Name of the Judge: Hon’ble Mr. Justice S. Rajendra Babu and Hon’ble Mr. Justice D.P. Mohapatra.
Subject Index: Board of Industrial and Financial Reconstruction (bifr) — tendency of proceedings before — settlement reached — MOU signed agreeing arrangement for deployment elsewhere — High Power Committee appointed — recommendations of Committee accepted by Government — scheme sanctioned by bifr – later promulgation of ordinance prohibiting absorption of employees — held the scheme already having been sanctioned by the bifr, it must be taken that the employees in different establishments have been identified and their placement in the various Government Departments and the public sector undertakings is complete.

2003 SCCL.COM 390(Case/Appeal No: Transferred Case (C) No. 8 of 2000 (with T.C.(C) Nos. 2, 4, 3, 9, 10, 11, 12, 13, 15, 35/2000 and T.P.(C) No. 326 of 2002))
A.K. Bindal and another Petitioners Vs. Union of India and others Respondents, decided on 4/25/2003.
Name of the Judge: Hon’ble Mr. Justice S. Rajendra Babu and Hon’ble Mr. Justice G.P. Mathur.
Subject Index: Service — pay scale — issue of revision of pay-scales of officers of Fertilizer Corporation of India and Hindustan Fertilizer Corporation — the economic viability or the financial capacity of the employer is an important factor which cannot be ignored while fixing the wage structure, otherwise the unit itself may not be able to function and may have to close down which will inevitably have disastrous consequences for the employees themselves — the employees cannot legitimately claim that their pay scales should necessarily be revised and enhanced even though the organisations in which they are working are making continuous losses and are deeply in red — petitions dismissed.

2003 SCCL.COM 479(Case/Appeal No: Writ Petition (C) No. 488 of 2002)
Kapila Hingorani Petitioner Vs. State of Bihar Respondent, decided on 5/9/2003.
Name of the Judge: Hon’ble the Chief Justice, Hon’ble Mr. Justice S.B. Sinha.
Subject Index: Companies Act — corporate veil — lifting of — if at all and to what extent the Government of the State of Bihar is vicariously liable for payment of arrears of salaries to the employees of the State owned corporations, public sector undertakings or the statutory bodies — the State cannot escape its liability when a human rights problem of such magnitude involving the starvation deaths and/ or suicide by the employees has taken place by reason of non-payment of salary to the employees of Public Sector Undertaking for such a long time — committee be appointed.

2003 SCCL.COM 829(Case/Appeal No: Civil Appeal No. 14572 of 1996 (With W.P.(C) Nos. 34/88, 1073, 1074/89, T.P.(C) No. 289/88,  W.P.(C) Nos. 152/88, 214/89, 218, 44, 134, 211/88, 161/87, 579/89,  T.P.(C) No. 290 of 1988))
Chairman-cum-Managing Director, National Textiles Corporation Ltd. and others Appellants Vs. N.T.C. (WBAB & O) Ltd. Employees Union and others Respondents, decided on 10/14/2003.
Name of the Judge: Hon’ble Mr. Justice Brijesh Kumar and Hon’ble Mr. Justice Arun Kumar.
Subject Index: Equal Pay for equal work — the issue involved in these cases is regarding the claim of the staff/sub staff engaged by the various textile mills under the NTC for ‘equal pay for equal work’. The staff working in the mills is claiming pay equal to or in parity with the pay scales prevailing for the staff working in the corporate offices of the mills — over the years by disparity between the pay scales of the staff working in the corporate offices and staff working in the mills has become highly disproportionate — as per the provisions of Section 5(2)(c) of the Sick Textile Undertakings (Nationalisation) Act, 1974, the waves, salaries and other dues of the employees of the sick textile undertakings after the takeover of their managements by the Central Government are the responsibility of the Central Government. The Central Government has failed to discharge its responsibility for all these years by raising such specious pleas. The Central Government has to discharge its responsibility de hors the bifr schemes.

2004 SCCL.COM 1059(Case/Appeal No: Writ Petition (C) No.427 of 1999)
National Confederation of Officers Asson. of Central Public Sector Undertaking and Others Petitioner Vs. Union of India and Others Respondents, decided on 11/30/2004.
Name of the Judge: Hon’ble Mr. Justice Ashok Bhan and Hon’ble Dr. Justice AR. Lakshmanan.
Subject Index: Constitution of India — Article 32 — petition — concerning release of revised IDA pay scale in respect of the British India Corporation (a Government Undertaking) and its two units situated at Cawnpore Woollen Mills, Kanpur and New Egerton Woollen Mills, Dhariwal (Punjab) — the brief controversy involved in this matter is that by order dated 19.7.1995, the Central Government has denied the benefit of revised IDA pay scale to those sick public sector undertakings which are registered with the bifr – Court passed the order directing the implementation of the Scheme as sanctioned Scheme by the bifr in so far as the petitioners are concerned.

2005 SCCL.COM 382(Case/Appeal No: Civil Appeal No. 3271 of 2005 (with I.A. No.2 in CA. No. 3271/2005 @ SLP(C) No. 7405/05, C.A. Nos. 3272-73/2005, I.A. Nos. 7-11 in C.A. Nos. 3272-3273@ SLP(C) Nos. 7549-7550/2005, C.A. No. 3274/2005, I.A. No. 3 in C.A. No. 3274 @ SLP(C) No. 10511/2005, C.A. No. 3275/2005, I.A. No. 2 in C.A. No. 3275/2005@ SLP(C) No. 7453/2005, C.A. No. 3276/2005, I.A. No. 2-3 in C.A. No. 3276/2005@ SLP(C) No. 7451/2005, C.A. No. 3277/2005, I.A. No. 2 in C.A. No. 3277/2005@ SLP(C) No. 8362/2005 and C.A. No. 3278/2005, I.A. No. 2 in C.A. No. 3278/2005 @ SLP(C) No. 8378 of 2005))
Bombay Dyeing and Manufacturing Co. Ltd. Appellant Vs. Bombay Environmental Action Group and others Respondents, decided on5/11/2005.
Name of the Judge: Hon’ble Mr. Justice N. Santosh Hegde and Hon’ble Mr. Justice S.B. Sinha.
Subject Index: Bombay Cotton Textile Mills Case — Development Control Regulations, 1991 — Regulation 58 — lands of Cotton Textile mills measuring about 600 acres — interest of justice would be sub-served if the National Textile Corporations are permitted to complete the transactions in terms of the scheme framed by the bifr but the same shall be subject to the conditions that in the event, the writ petition ultimately succeeds, the vacant land available from other mills, if necessary, shall be offered by way of adjustment — scheme, rules, regulations and byelaws, framed under the provisions of Maharashtra Regional & Town Planning Act, 1966 shall be strictly complied while granting permission — the committee appointed in terms of the regulation shall grant its approval only in accordance with the extant regulations — any further constructions and/ or creation of any third party rights by the mill owners will be at their own risk wherefor they would not claim any equity whatsoever and furthermore the same subject to the orders of the Court.

2005 SCCL.COM 608(Case/Appeal No: Civil Appeal Nos. 5199-5201 of 2004 (with C.A. Nos. 5202-5205 of 2004))
M/s. NGEF Ltd. Appellant Vs. M/s. Chandra Developers Pvt. Ltd. and another Respondents, decided on 9/29/2005.
Name of the Judge: Hon’ble Mr. Justice S.B. Sinha and Hon’ble Mr. Justice C.K. Thakker.
Subject Index: Sick Industrial Companies (Special Provisions) Act, 1985 — Sections 20(4) and 32 — Companies Act, 1956 — Sections 433 and 536(2) — Companies (Court) Rules, 1959 — Rules 6 and 9 — winding up — powers of Company Court — company directed to execute sale deed by Company Court under provisions of the Companies Act — provisions of SICA prevails over provisions of the Companies Act — u/s 20(4) of SICA only bifr has jurisdiction as regard sale of assets till winding up order is passed — order of sale set aside — appeals allowed.

2006 SCCL.COM 341(Case/Appeal No: Civil Appeal No. 6217 of 1999 (With C.A. Nos. 6171-6172 of 1999, and C.A. No. 6176 of 1999))
State of U.P. & Anr. Appellants Vs. Uptron Emp. Union CMD.I & Ors. Respondents, decided on 4/26/2006.
Name of the Judge: Hon’ble Mr. Justice B.P. Singh and Hon’ble Mr. Justice Altamas Kabir.
Subject Index: Sick Industrial Companies (Special Provisions) Act, 1985 — Section 15 — sick company a fully owned to subsidiary of a government company owned and controlled by State of U.P. — direction given by bifr to State of U.P. to make on account payment of wages to workers of the sick company on humanitarian grounds challenged — no provision in SICA which authorities bifr to pass such order — impugned orders set aside — appeals allowed.

2007 SCCL.COM 626(Case/Appeal No: Civil Appeal No. 1672 of 2006)
G.L. Sultania and another Appellants Vs. The Securities and Exchange Board of India and others Respondents, decided on 5/16/2007.
Name of the Judge: Hon’ble Mr. Justice B.P. Singh and Hon’ble Mr. Justice Altamas Kabir.
Subject Index: Securities and Exchange Board of India Act, 1992 — Section 15Z — appeal under — shares not valued in accordance with the parameters laid down under Regulation 20(5) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 — as per the appellants — respondents contended that the valuation of shares was done having regard to the parameters laid down under Regulation 20(5) of the Takeover Code and the Board had taken all necessary precautions to safeguard the interest of the shareholders so as to ensure payment of best price for the shares to be sold by them — the question there arises as to who shall determine whether the valuation of shares is reasonable and acceptable — the valuer, Patni & Company have not committed any such error which may justify our interference. They have considered all the factors relevant under Regulation 20(5)) of the Takeover Code and have adopted a reasonable approach which does not call for interference — the Board has acted in a reasonable manner and made its best efforts to secure a reasonable price for the shares of the shareholders. It has exercised its discretion wisely and we find no reason to interfere.

2007 SCCL.COM 1036(Case/Appeal No: Civil Appeal No. 2805 of 2005)
Carona Ltd. Appellant Vs. M/s Parvathy Swaminathan & Sons Respondents, decided on 10/5/2007.
Name of the Judge: Hon’ble Mr. Justice C.K. Thakker and Hon’ble Mr. Justice P. Sathasivam.
Subject Index: Landlord and tenant — in spite of determination of tenancy, the tenant did not hand over vacant and peaceful possession of the suit premises to the landlord. The landlord, therefore, filed a suit in the Small Causes Court, Bombay on April 2, 2001. In a written statement, dated August 1, 2001, the tenant disputed the averments made and allegations levelled by the landlord and contended that it was not liable to be evicted. The Small Causes Court, Bombay, however, passed a decree of eviction against the tenant on December 16, 2002 which was confirmed by a Bench of that Court as also by the High Court. The said order is challenged in the present appeal — on the date the tenancy was terminated, the tenant (Public Limited Company) was having a paid up share capital of rupees more than one crore. Under clause (b) of Section 3(1) of the Act, therefore, the provisions of the Act were not applicable to the suit-premises. It is true that a resolution was passed by the Company to reduce the paid up share capital to less than rupees one crore, but the said resolution was never approved by bifr — the tenant has not paid ‘rent’/’mesne profits’ since more than ten years. Even after approaching this Court, it had made part payment pursuant to interim order made in April, 2005. But nothing was paid/deposited thereafter even though two years have passed — the appellant-tenant cannot ask for discretionary and equitable relief.

2007 SCCL.COM 1187(Case/Appeal No: Civil Appeal No. 5275 of 2007)
Bijli Cotton Mill (Unit of National Textile Corporation U.P. Limited) Appellant Vs. U.P. Power Corporation Limited & others Respondents,decided on 11/16/2007.
Name of the Judge: Hon’ble Dr. Justice Arijit Pasayat and Hon’ble Mr. Justice Lokeshwar Singh Panta.
Subject Index: Recovery proceedings — quashment requested — appellant involved in manufacture of cotton yarn — matter referred to bifr — electricity connection was disconnected — payment of surcharge — request for waiver — the High Court is requested to consider the matter within four months of the receipt of the order of bifr.

2007 SCCL.COM 1217(Case/Appeal No: Civil Appeal No. 5347 of 2007)
Zenith Steel Tubes & Industries Ltd & Another Appellants Vs. SICOM Limited Respondent, decided on 11/23/2007.
Name of the Judge: Hon’ble Mr. Justice Altamas Kabir and Hon’ble Mr. Justice B. Sudershan Reddy.
Subject Index: Sick Industrial Companies (Special Provision) Act, 1985 — section 22 — suit — meaning of — in view of the intention of the legislature to protect sick industrial companies where references were pending before the bifr. It is also evident from the decision in Paramjeet Singh Patheja’s case that the views expressed in Kailash Nath Agrawal’s case had not been brought to the notice of the learned Judges who decided the matter — fit and proper that the matter should be referred to a larger Bench to resolve the existing anomaly resulting from the different views expressed in the two above-mentioned cases.

2008 SCCL.COM 605(Case/Appeal No: Civil Appeal No. 573 of 2005)
Sajjan Textile Mills Ltd. Appellant Vs. ICICI Bank Ltd. & others Respondents, decided on 5/16/2008.
Name of the Judge: Hon’ble Mr. Justice Tarun Chatterjee and Hon’ble Mr. Justice Harjit Singh Bedi.
Subject Index: Loan to company — not paid — Recovery suit — court appointed Receiver — application before bifr filed for declaration of sick unit — the appellant had suffered serious prejudice on account of remaining unrepresented on being unaware of the proceedings — the litigation has had a chequered career in several forums including this Court — till such time the High Court takes its decision in the matter, the status quo order passed by this Court on 29th October 2004 will continue to operate — appeal allowed.

2008 SCCL.COM 831(Case/Appeal No: Civil Appeal No. 4324 of 2008)
Shivanand Gaurishankar Baswanti Appellant Vs. Laxmi Vishnu Textile Mills and others Respondents, decided on 7/11/2008.
Name of the Judge:  Hon’ble Mr. Justice C.K. Thakker and Hon’ble Mr. Justice D.K. Jain.
Subject Index: Constitution of India — Article 226 — petition under — summary dismissal — appeal — Laxmi Vishnu Textile Mills operating 2 cotton mills — there were large number of workers in the mill and there was considerable profit in the business. By the passage of time, however, the Company started incurring losses and things turned worse in later eighties. Proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 — the High Court dismissed the writ petition observing that it was not a fit case to interfere with by an order dated February 12, 2007 in exercise of extraordinary jurisdiction under Article 226 of the Constitution. The said order is challenged by the appellant in this appeal — the very width of the power under Article 136 is a warning against its `freewheeling exercise save in grave situations’. Circumspection and circumscription must, therefore, induce the Court to interfere with the decision under challenge only if the extraordinary flaws or grave injustice or other recognized grounds are made out — no secured or unsecured creditor has come forward making grievance that though he was entitled to more amount, he has not been paid such amount. So far as workers are concerned, Court has already dealt with rights of Representative-Union in detail and have held that the Representative Union has preferential right to appear in the proceedings under the Act. Hence, taking any view of the matter, this is not a fit case to exercise discretionary and equitable jurisdiction under Article 136 of the Constitution.

2008 SCCL.COM 1101(Case/Appeal No: Civil Appeal No. 5225 of 2008)
KSL & Industries Ltd. Appellant Vs. M/s. Arihant Threads Ltd. and others Respondents, decided on 8/25/2008.
Name of the Judge: Hon’ble Mr. Justice C.K. Thakker and Hon’ble Mr. Justice Altamas Kabir.
Subject Index: Sick Industrial Companies (Special Provisions) Act, 1985 — section 22 — C.K. Thakker, J. and Altamas Kabir J. — in view of the difference of opinion on interpretation of Section 34 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Registry is directed to place the papers before the Hon’ble the Chief Justice of India for taking appropriate action in accordance with law — C.K. Thakker, J. — the present appeal raises a question of great public importance having far- reaching consequences. The appeal is filed by KSL & Industries Ltd. against final judgment and order passed by the Division Bench of High Court of Delhi on February 23, 2006 in Writ Petition (Civil) Nos. 2041-42 of 2006. By the said judgment, the High Court, set aside the order passed by the Debt Recovery Appellate Tribunal, Delhi and held that in view of the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, no recovery proceedings could be effected against the first respondent-Company in the light of the bar contained therein — question is whether the High Court was right in holding that the proceedings were barred under Section 22 of SICA — the High Court has committed an error of law in invoking and applying provisions of Section 22 of SICA and in dropping proceedings against the Company — Altamas Kabir, J. — unable to travel the same path which my learned Brother has chosen to traverse.

2009 SCCL.COM 863(Case/Appeal No: Civil Appeal No. 3411 of 2009)
V.N. Devadoss Appellant Vs. Chief Revenue Control Officer-cum-Ins. and others Respondents, decided on 5/8/2009.
Name of the Judge: Hon’ble Dr. Justice Arijit Pasayat, Mr. Justice D.K. Jain and Hon’ble Dr. Justice Mukundakam Sharma.
Subject Index: Indian Stamp Act, 1899 — section 47-A — appeal under — bifr & AIFR are mediators and the sale value could not be the market value — all deal was done to evade stamp duty. High Court affirmed the order of District Court. Supreme Court held — the judgment of High Court cannot be sustained and is set aside. The appeal is allowed helding no scope for exercising power under section 47-A of the Act.

2009 SCCL.COM 1014(Case/Appeal No: Civil Appeal No. 3603 of 2009)
M.D., Bhoruka Textiles Limited Appellant Vs. M/s. Kashmiri Rice Industries Respondent, decided on 5/15/2009.
Name of the Judge: Hon’ble Mr. Justice S.B. Sinha and Hon’ble Dr. Justice Mukundakam Sharma.
Subject Index: Sick Industrial Companies (Special Provisions) Act, 1985 — section 16 and section 22 — Board’s enquiry for determining sick industrial company and suspension of legal proceedings, contracts etc. — respondent’s firm entered into a contract for supply of paddy husk with the appellant — appellant neglected to pay the price — appellant raised contention that has become a sick industry under Section 22 and a reference having been made to the Board of Industrial and Financial Reconstruction — appeal — respondent aware that the appellant had made reference to the bifr in terms of the provisions of the Act — appellant is an industrial undertaking — a suit is barred when an enquiry under Section 16 is pending — prior to institution to the suit, respondent did not obtain consent of Board — a judgement and decree passed by a Court or tribunal lacking inherent jurisdiction would be a nullity — impugned judgement set aside — appeal allowed — appellant deposited 50% of the decretal amount — Civil Court shall transfer the said amount to bifr.

2010 SCCL.COM 33(Case/Appeal No: Civil Appeal No. 5181 of 2002)
State of Bihar and others Appellant(s) Vs. Kalyanpur Cements Ltd. Respondent(s), decided on 1/8/2010.
Name of the Judge: Hon’ble Mr. Justice Tarun Chatterjee and Hon’ble Mr. Justice Surinder Singh Nijjar.
Subject Index: Industrial Policy, 1995 — clause 24 — Sales Tax Exemption Notification — the Company applied to the State Government for grant of Sales Tax Exemption for 5 years — State Government consistently gave assurances to the Company that the necessary Sales Tax exemption notification will be issued — no such notification was issued even after 3 years — Company filed petition for issuance of the writ of mandamus directing the State to issue necessary Notification under Clause 24 of the 1995 Policy — High Court allowed the writ petition in favour of Company — appeal — whether the Company could have invoked the principle of `promissory estoppel’ in support of its claim — Yes — for more than 3 years, the Company and the financial institutions had been assured by the Government that the notification will be issued forthwith — held that mere claim of change of policy would not be sufficient to exonerate the Government from liability and thus, discontinuance of the Sales Tax Exemption could not have affected the rights of the Company under the Industrial Policy, 1995 — held the entire sequence of meetings considering the rehabilitation package of the Company and the two Committees recommended granting of exemption much before the policy lapsed — the amount of Rs. 60 crores collected by the Company from the consumer to offset the tax liability, thus, tax lawfully levied and realized cannot be refunded — no interference to the orders of the High Court — appeal filed by the State dismissed and directed that the amount deposited by the Company with accrued interest be released to the appellant.

2010 SCCL.COM 331(Case/Appeal No: Special Leave Petition (Civil) No. 33984 of 2009)
Kanpur Electricity Supply Co. Ltd. and another Petitioners Vs. M/s. L.M.L. Limited and others Respondents, decided on 5/7/2010.
Name of the Judge: Hon’ble Mr. Justice Altamas Kabir, Mr. Justice Cyriac Joseph and Hon’ble Mr. Justice C.K. Prasad.
Subject Index: U.P. Electricity Supply Code, 2005 — Clause 4.41 read with Clause 4.49 — the Respondent-Company applied for reduction of the contract load from 8 MVA to 1.25 MVA with effect from 1st April, 2006 which was approved by the UPERC. However, the electricity bill for the month of May, 2006 based on 8 MVA load was presented to the Respondent — the respondent paid the bill on the basis of 1.25 MVA load and also invoked the provisions of the Sick Industrial Companies Act, 1985. The KESCO directed to the Respondent-Company for submitting a Bank Guarantee for the arrears of the amount as per Clause 4.49 of the U.P. Supply Code, 2005 so that action could be taken to reduce the load from 8 MVA to 1.25 MVA which was not done — thereafter, the Respondent-Company restarted its manufacturing activities and requested KESCO to increase the load from 1.25 MVA to 2.25 MVA that was rejected by the KESCO on the ground of non-submission of the Bank Guarantee by the Respondent-Company for the balance amount of the bill raised for the month of May, 2006. As the respondent was registered as a Sick Unit, thebifr directed KESCO to continue to accept Rs.5 lakhs per month against their arrears, besides payment of current electricity bills on actual consumption basis, and not to adopt coercive measures to disconnect the supply of electricity. However, a disconnection notice was issued by KESCO — the High Court concluded that the reduction of the load of the Respondent-Company stood approved on 19th April, 2006, and, accordingly, the effective date of such reduction would have to be reckoned from the first day of the following month, namely, from 1.5.2006, in terms of Clause 4.41(e) of the Code — appeal — this Court observed that instead of helping the Respondent-Company to come out of its financial crisis, the Petitioners have prevented the Company from doing so by refusing to lower the load from 8 MVA to 1.25 MVA, as agreed upon, thus, held that the continued insistence of KESCO that a Bank Guarantee should be provided by the Respondent No.1-Company in respect of its outstanding dues, had the effect of negating the decisions to revive the Company — no interference to the impugned orders of the High Court — petition dismissed — no costs.

2011 SCCL.COM 381(Case/Appeal No:  Civil Appeal No. 3911 of 2011 With Civil Appeal No. 3912 of 2011)
Dunlop India Limited Appellant Vs. A.A. Rahna and another Respondent(s), decided on 5/4/2011.
Name of the Judge: Hon’ble Mr. Justice G.S. Singhvi and Hon’ble Mr. Justice Asok Kumar Ganguly.
Subject Index: Kerala Buildings (Lease & Rent Control) Act, 1965 — sections 11(2)(b), 11(3), 11(4)(i), 11(4)(v) — eviction petitions against the appellant — to vacate the leased suit premises — Sick Industrial Companies (Special Provisions) Act, 1985 — the Rent Control Court concluded that the appellant had ceased to occupy the suit premises since September, 2001 without any reasonable cause and, accordingly, directed it to vacate the premises. The Appellate Authority reiterated the finding recorded by the Rent Control Court — the High Court confirmed the said orders — hence, the appeals — whether pendency of the proceedings under the 1985 Act, which implies that the appellant was facing financial difficulty in conducting its business constituted reasonable cause for cessation of occupation of the premises — the appellant did not produce any evidence to prove physical occupation of the premises or any business transaction. It also failed to produce any evidence to show that there was reasonable cause for non occupation of the suit premises — the appellant neither pleaded nor any evidence was produced to show that financial stringency was due to the reasons beyond its control and on that account, the suit premises could not be used from September, 2001 onwards for the purpose specified in the lease deeds — the Supreme Court held that the evidence produced by the parties was rightly treated as sufficient by the Rent Control Court and the Appellate Authority for recording a finding that the appellant had ceased to occupy the suit premises continuously for six months without any reasonable cause — appeals dismissed.

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