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Winding-up petition under section 439 of the Companies Act due to non-payment of dues. Interpretation of section 18E of the Industries (Development and Regulation) Act regarding the maintainability of the winding-up petition after the Central Government takes over the management of the company. Analysis: The petition sought the winding-up of a company for non-payment of dues exceeding one lakh rupees, following the statutory period under section 434(1)(a) of the Companies Act. However, a preliminary objection was raised by the company, which had come under the management of the Central Government. The objection was based on section 18E of the Industries (Development and Regulation) Act, which prohibits winding-up proceedings without the consent of the Central Government after it takes over the management of an industrial undertaking. The company argued that the winding-up petition was not maintainable without the Central Government's consent, as per section 18E(c) of the Act. The court analyzed the interpretation of section 18E(c) and concluded that the word "proceeding" encompassed all stages of the winding-up process, not just the filing of the petition. The court held that Parliament intended to bar all winding-up proceedings without the Central Government's consent once it took over the management of the company. The judgment emphasized the legislative intent to allow the Central Government the opportunity to rehabilitate industrial undertakings and prevent winding-up unless absolutely necessary. Drawing parallels with a Supreme Court case, the court highlighted that the word "proceeding" in section 18E(c) required consent for the entire duration of the winding-up process, not just the initiation. The court rejected arguments that the consent was only needed for the filing of the petition, emphasizing that the singular usage of "proceeding" in the provision did not limit its scope to a single stage of the process. Additionally, the court dismissed the contention that the petitioner had a vested right to pursue the petition without the Central Government's consent, as section 18E(c) was deemed retrospective in effect. Ultimately, the court held that the winding-up petition could not proceed without the Central Government's consent post its takeover of the company's management. As the petitioner had not obtained the required consent, the court dismissed the petition with costs. This judgment clarifies the application of section 18E of the Industries (Development and Regulation) Act in relation to winding-up proceedings post the Central Government's assumption of management control, underscoring the necessity of obtaining consent for such proceedings to proceed.
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