2003 (1) TMI 561 - HC - Companies Law

Summary

Issues:
Company petition seeking winding-up under section 433(e) of the Companies Act; Company's application to BIFR as a sick industrial company; Parallel proceedings before BIFR and the High Court; Precedence of proceedings before BIFR; Dismissal of the company petition and directions to BIFR.

Analysis:
The judgment pertains to a company petition seeking winding-up under section 433(e) of the Companies Act against a company that allegedly failed to repay the debt. It is noted that the company had applied to the BIFR to be declared as a sick industrial company, with a reference case registered by the BIFR. The BIFR had directed a Special Investigating Audit (SIA) to be conducted regarding the company's accounts to determine whether it should be declared as a sick industrial company for winding-up or be rehabilitated under the SICA.

The High Court emphasized that the issue involved in the company petition was substantially part of the proceedings before the BIFR, as evident from the facts and the BIFR's directives. The court highlighted that parallel proceedings against the same company in different forums should be avoided. It was stated that if the BIFR determines the need for winding-up or revival of the company, the final orders would need to be passed accordingly, with precedence given to the BIFR proceedings.

Based on the above considerations, the High Court concluded that there was no valid ground to entertain the company petition and subsequently dismissed it. However, the court directed the BIFR to ensure that the petitioners' claims in the company petitions were addressed while determining the company's liability concerning its assets. The court also instructed that appropriate orders be passed promptly by the BIFR, with a copy of the order to be sent to the BIFR for their information and record, emphasizing the importance of the BIFR's role in resolving the matter.

This comprehensive analysis of the judgment highlights the legal intricacies involved in the company petition seeking winding-up, the company's application to the BIFR, the issue of parallel proceedings, and the ultimate dismissal of the petition with directions to the BIFR for further action in resolving the matter.