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Issues:
Winding up of respondent-company under section 433(e) read with sections 434 and 439 of the Companies Act, 1956 due to inability to secure payment of admitted liability. Interpretation of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 in relation to the ongoing proceedings. Analysis: The petitioner sought winding up of the respondent-company citing its inability to secure payment of admitted liability. The respondent relied on an order from the court in 2005 related to a reference with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985. The petitioner argued that since the claimed amount was not part of the respondent's proposed scheme, the winding up proceedings should not be stayed. Reference was made to the Real Value Appliances Ltd. case where the Supreme Court emphasized the need for BIFR's inquiry before any final decision affecting the company. It was highlighted that the legislative intent was to prevent actions against the company's assets until the BIFR reaches a decision. The petitioner also cited various judgments, but the court found them inapplicable to the present case. The court analyzed the Smt. Manohar Bhasin case and concluded that unless the arrears are part of a rehabilitation scheme, there is no bar to their realization. The court disagreed with the petitioner's argument, emphasizing that the nature of the claim, whether statutory or contractual, impacts the applicability of section 22 of the Act. The court noted that the Act does not differentiate between claims part of a scheme or not, and the key is the utilization of available funds by the company. Based on the previous order related to the respondent-company, the court adjourned the company petition sine die, allowing parties to seek revival once the BIFR decides on the reference. The judgment underscores the importance of BIFR's role in determining the fate of a company before any winding up proceedings can proceed, especially in cases where claims are not part of proposed rehabilitation schemes.
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