9911796707
TMI Blog2001 (8) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order passed by the learned Single Judge was stayed by this Court on 15-6-2001, for a period of eight weeks. It is not disputed by Sri Thomoas V. Peter appearing for the official liquidator that he has not yet taken possession of the appellant-company. 3. Sri Basavaprabhu S. Patil, the learned counsel appearing for the appellant and Sri Nanjundaswamy, the learned counsel appearing for the first respondent submitted that the dispute between the appellant-company and the first respondent has been amicably settled and in terms of the settlement arrived at between the parties, the appellant has today handed over a DD for a sum of Rs. 5,50,000 in full and final settlement of all the claims of the appellant against the first respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20, the word shall is in the nature of the power conferred on the Company Court and must be considered as directory in nature allowing a lot of discretion to the court to decide as to whether in the facts and circumstances of the case a company is required to be wound up or not. It is his submission, the power for winding up of a company having been conferred on this Court under section 433 of the Act, this Court is required to keep in mind the principles governing winding up of the company as set out in the said provision, while considering the opinion furnished by the BIFR under sub-section (1) of section 20. In support of his submission that the opinion furnished by the BIFR is not conclusive and the Company Court is required to indepe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o become viable in future and that it is just and equitable that the company should be wound up, it may record its opinion on that behalf and forward the same to the concerned High Court which has a jurisdiction to make an order for winding up under the provisions of the Companies Act. As rightly pointed out by Sri Patil, the power of winding up of the company is conferred on this Court under section 433. Section 433 provides for the circumstances under which a company can be wound up. Clause ( f ) of section 433 provides for the power on the Company Court to pass an order of winding up, if the court is of the view that it is just and equitable that a company should be wound up. No doubt, sub-section (1) of section 20 empowers the BIFR to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceedings to be continued against the sick industrial company for the purpose of winding up and further proceedings are to be conducted in accordance with the provisions contained in the Act for the winding up of the company. In our view, we are supported by the decision of the Madras High Court in the case of J.M. Malhotra ( supra ) and of the Supreme Court in the case of V.R. Ramaraju ( supra ) which has affirmed the said decision. When the validity of sub-section (2) of section 20 of the Sick Industrial Companies Act came to be challenged before the Madras High Court, the Madras High Court while upholding the validity of sub-section (2) of section 20 has observed as follows : "...Sub-section (2) of section 20 of the Act is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras High Court as noticed by us earlier was affirmed by the Hon ble Supreme Court in the case of V.R. Ramaraju ( supra ). The Supreme Court has observed as follows : "It is obvious that sub-section (2) has to be construed to mean that the High Court in deciding the question of winding up of the company has to take into account the opinion of the Board forwarded to it under sub-section (1) and is not to abdicate its own function of determining the question of winding up. So read, sub-section (2) does not suffer from any infirmity. This in substance is the view taken by the High Court in the impugned order." (p. 610) Therefore, we are of the view that the view taken by the learned Company Judge that in the light of the order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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