9911796707
TMI Blog1993 (10) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground of inability of the company to pay debts, are as, under: ( i ) Whether the petition filed) without obtaining prior permission under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986)(hereinafter referred to as "the SIC Act ) from the Board for Industrial and Financial Reconstruction ("BIFFR" in short) against the company already declared as "a sick unit" by the BIFR under the. SIC Act, prior to the presentation of the petition in the court is void ab initio and liable to be dismissed as being not maintainable. ( ii ) Whether the petition can be kept alive by keeping it in abeyance pending the inquiry under section 16 or preparation of the scheme under section 17 of the SIC Act. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the industrial company or for the appointment of a receiver in respect thereof shall lie or be proceeded with further, except with the consent of the Board, or, as the case may be, the appellate authority... (3) During the period of consideration of any scheme under section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings for winding up. Whereas the expression "be proceeded with further", it clearly provides and means that the same refers to the reference made later on or at subsequent stages of institution of the petition in the court as is clearly spelt out from the first part of sub-section (1) of section 22 of the SIC Act. To put it clearly it talks of, in the first instance, proceedings filed before the reference to BIFR when it speaks of "shall lie". The second category of the proceedings contemplated are those where reference to the BIFR is made after the filing of the proceedings and, therefore, the expression used is "be proceeded with further". Obviously and naturally, the question of obtaining prior consent of the Board would arise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restrained the gram panchayat from recovering the property taxes without the consent of the Board. The matter was carried to the apex court, which confirmed the decision of the High Court reiterating and reaffirming that the proceedings adopted without prior consent of the Board were not maintainable. The observations appearing in para 11 of the said judgment are eloquent, which bring out the legal position luminously clear (at page 173) : "It may be against the principles of equity if the creditors are not allowed to recover their dues from the company, but such creditors may approach the Board for permission to proceed against the company for the recovery of their dues/outstandings/overdues or arrears by whatever name they are called. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition was dismissed. Next is the Division Bench decision of the Gujarat High Court in the case of Testeels Ltd. v. Radhaben Ranchhodlal Charitable Trust, AIR 1988 Guj. 213 ; [1989] 66 Comp. Cas. 555, construing the meaning of section 22(1) of the SIC Act, the Bench accepted the claim of the company, raised in an identical manner as in the case before this court, and held that the petition for winding up filed without prior consent of the Board was not maintainable and consequently proceeded to dismiss the same. In view of the clear provisions of law noticed above, considered in the various decisions referred to above, and the ratio laid down therein, and in view of the facts and circumstances as obtaining in the matter herein, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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