2001 (11) TMI 960 - HC - Companies Law

Issues Involved:
1. Petition for winding up.
2. Allegation of outstanding dues.
3. Dilatory tactics by the company.
4. Pendency of proceedings before the BIFR.
5. Applicability of Section 22 of the SICA.
6. Inclusion of dues in the revival scheme.
7. Legal precedents and their applicability.

Detailed Analysis:

1. Petition for Winding Up:
A petition for winding up was filed by Usha Beltron Limited under the Companies Act, 1956, against Fort William Industries Ltd. due to alleged outstanding dues amounting to Rs. 1,90,38,971.65, inclusive of principal and interest up to 29-8-2000. The petitioning creditor claimed that the dues arose from the sale of high/low carbon wire rods based on various orders placed by the company.

2. Allegation of Outstanding Dues:
The petitioning creditor alleged outstanding dues from Fort William Industries Ltd. amounting to Rs. 1,90,38,971.65. The winding-up proceeding was initiated in November 2000, and directions for filing affidavits were given on 13-11-2000. However, the company failed to file affidavits within the stipulated time and even after extensions.

3. Dilatory Tactics by the Company:
The petitioning creditor accused the company of employing dilatory tactics by not filing affidavits and seeking repeated adjournments. The company filed an application (C.A. No. 78 of 2001) in February 2001, seeking dismissal or stay of the winding-up petition under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).

4. Pendency of Proceedings Before the BIFR:
The company argued that the winding-up petition could not proceed due to pending proceedings before the Board for Industrial and Financial Reconstruction (BIFR). The company was declared a sick industrial company by the BIFR on 18-11-1987, and a revival scheme was prepared but not implemented due to delays by the State Bank of India and internal family divisions among the promoters.

5. Applicability of Section 22 of the SICA:
The court had to determine whether the winding-up petition could proceed or should be stayed under Section 22 of the SICA. The petitioning creditor's claim was not covered under the original or modified revival scheme by the BIFR. The creditor argued that Section 22's bar applies only to dues included in the sanctioned scheme.

6. Inclusion of Dues in the Revival Scheme:
The petitioning creditor's dues were not included in the original or modified revival scheme. The creditor provided evidence from the company's supplementary affidavit, showing that their claims were not listed as sundry creditors in the documents submitted to the BIFR.

7. Legal Precedents and Their Applicability:
The court referred to several legal precedents to address the applicability of Section 22 of the SICA:

- Corromandal Pharmaceuticals Case: The Supreme Court held that the bar under Section 22 applies only to dues included in the sanctioned scheme. The court emphasized that the purpose of Section 22 is to prevent impediments in implementing the sanctioned scheme.

- Sirmor Sudburg Auto Ltd. Case: The Delhi High Court held that mere pendency of proceedings before the BIFR does not attract Section 22 unless the dues are included in the sanctioned scheme.

- Vibgyar Ink Chem (P.) Ltd. Case: The Andhra Pradesh High Court ruled that claims not included in the scheme are not barred by Section 22.

- Pranami Press Case: The Andhra Pradesh High Court held that debts incurred after the scheme's sanction do not require BIFR's permission for recovery actions.

- Taulis Pharma Ltd. Case: The Calcutta High Court Division Bench reiterated that Section 22's bar applies only to dues included in the scheme.

The company's counsel argued that the Corromandal Pharmaceuticals case should be read in the context of Sales-tax dues, which are public money and not included in the scheme. However, the court found this argument unpersuasive in light of the binding precedents.

Conclusion:
The court concluded that the winding-up petition could proceed as the petitioning creditor's dues were not included in the BIFR's revival scheme. The application (C.A. No. 78 of 2001) filed by the company was dismissed, and the winding-up petition was directed to be posted before the appropriate bench on 3-12-2001. No order as to costs was made.

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