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Issues:
Application for winding up of a company under section 433(e) and (f) read with section 439(1)(b) of the Companies Act, 1956; Interpretation of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985; Maintainability of the winding-up application during the pendency of proceedings before the Board for Industrial and Financial Reconstruction (BIFR). Analysis: The company petition was filed seeking winding up of the respondent-company due to an unpaid balance. The respondent-company confirmed a balance of Rs. 1,82,856.61 as of March 31, 1993, but failed to pay. The petitioner contended that more amount was due. The respondent argued that only Rs. 54,069.62 was payable, which had been paid. The respondent claimed the winding-up petition was not maintainable under section 22(1) of the Sick Industrial Companies Act, as the company was declared sick by the BIFR and a rehabilitation scheme was under consideration. The court analyzed section 22 of the Act, which suspends legal proceedings against an industrial company during certain stages. The Supreme Court's interpretation in a previous case highlighted the automatic suspension of proceedings against a company's properties once an inquiry is ordered by the Board. The court also referred to judgments from the Bombay High Court and the local High Court regarding the suspension of winding-up proceedings during BIFR inquiries. The court concluded that the winding-up application filed after the BIFR initiated proceedings and during their pendency was not maintainable under section 22(1) of the Act. The application did not lie due to the bar imposed by the Act. However, the petitioner's rights were protected as the limitation period was extended until the bar was cleared. The court dismissed the company petition but allowed the petitioner to seek approval from the Board to initiate winding-up proceedings in the future. Overall, the judgment clarifies the application of section 22 of the Sick Industrial Companies Act in relation to the maintainability of winding-up petitions during BIFR proceedings, emphasizing the need for consent from the Board for such actions and the automatic suspension of legal proceedings against a company once BIFR inquiries are initiated.
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