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Company petition for winding up under section 433(e) of the Companies Act due to inability to pay debt. Bar under section 22 of SICA for winding up proceedings while BIFR proceedings are pending. Observations on delay in BIFR proceedings causing harm to creditors and debtors. Direction to BIFR for expeditious disposal of reference case within six months. Analysis: The petitioner filed a company petition seeking winding up of the respondent-company under section 433(e) of the Companies Act, citing the respondent's inability to pay the debt owed. However, it was noted that proceedings before the Board for Industrial and Financial Reconstruction (BIFR) were ongoing under sections 15 and 16 of the Sick Industrial Companies (Special Provisions) Act (SICA) at the respondent's instance. This triggered the application of the bar contained in section 22 of SICA against proceeding with the winding up. The court advised the petitioner to engage with the BIFR as a creditor rather than pursuing the winding-up petition independently. If the BIFR's decision favored the respondent, the petitioner could later file a winding-up petition or execute a money decree obtained against the respondent, depending on the outcome of the BIFR proceedings. The court expressed concern over the prolonged nature of proceedings before the BIFR, highlighting that delays benefited the debtor company while causing significant harm to creditors unable to recover their dues due to the operation of section 22 of SICA. The court emphasized the need for the BIFR to expedite the disposal of cases to provide clarity to both creditors and debtors regarding the resolution of outstanding dues. In this specific case, where the matter had been pending before the BIFR for over five years without progress, the court directed the BIFR to ensure the expeditious disposal of the reference case within six months from the date of the court's order. In conclusion, the judgment underscored the importance of timely resolution of cases before the BIFR to protect the interests of both creditors and debtors. The court's directive aimed to mitigate the adverse effects of prolonged proceedings on stakeholders and urged the BIFR to act promptly in disposing of cases to provide clarity and facilitate the recovery of outstanding dues in accordance with the law.
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