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TMI Blog2002 (7) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is just and equitable that M/s. Modistone Ltd. should be wound up and has directed the registrar to forward the aforesaid opinion of the Board to this Court (wrongly named as High Court of Maharashtra) for further action under law. On receipt of the papers, matter was placed before the learned Company Judge who by his order of 24-1-2002 directed the petition to be registered as winding up petition. The petition was also accepted. The order of the learned Judge discloses that an appeal had been preferred by the employees union to A.A.I.F.R. which was dismissed on 8-8-2001. There is no challenge to that order. 2. The petition has now come up for admission before this court. There were also other petitions for winding up of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The purpose is to find out whether once an authority under Sick Industrial Companies (Special Provisions) Act has come to the conclusion that the company cannot be rehabilitated. What is the order to be passed by the company court : "433. A company may be wound up by the Court : ( a )if the company has, by special resolution, resolved that the company be wound up by the Court; ( b )if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting; ( c )if the company, does not commence its business within a year from its incorporation, or suspends its business for a whole year; ( d )if the number of members is reduced, in the case of a public company below seven, and in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the Apex Court when in the meantime, an amendment made to the Act with effect from 17-1-2000. The Allahabad Bank filed proceedings for recovery of amounts before Debt Recovery Tribunal Recovery. Case was filed before the Recovery Officer. The Debtor company filed an appeal, there was no stay. In the meantime, Canara Bank also filed an application before Debt Recovery Tribunal, Delhi for a decree under RDB Act. That was pending. The Canara Bank filed interlocutory proceedings before the Recovery Officer seeking pro rata distribution of sale proceeds from auctions of the debtor company s property. This was resisted by the Appellant Bank. The applications were dismissed. The property of the debtor company was sold. This was confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due, Tribunal has to issue necessary certificate under section 19(22) of the Recovery Officer for recovery of the debts specified in the certificate. Then the next question was whether the Act over rides provision of sections 442, 537 and 447 of the Companies Act. The court after considering the matter then held that the provisions of the RDB Act and special provisions contained therein and the purpose of the Act is something more important than the purpose of sections 442, 446 and 537 of the Companies Act. The court then proceeded to examine whether the RDB Act is special Act and whether the Companies Act is general Act as held by some High Courts. The Court after examining the order in Para 49 observed that at the stage of adjudication u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On receipt of information, the court is required to proceed under sub section 2 of section 20. Sub-section 2 of section 20 referred to earlier would show that the High Court shall order winding up of the sick industrial company on the basis of the opinion of the Board and the High Court is required to proceed with the winding up in accordance with the provisions of the Companies Act. He then observed that once company is wound up under section 20 of SICSP Act, the company Judge has to proceed as if that company has been wound up as per section 20 of the Act. 4. We may now examine some provisions of the Act to find out whether SICSP act is special Act considering section 446 considering Companies Act. Under section 32 of the SICSP Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that after the board conducts an enquiry under section 16 and after consideration of all the relevant facts and circumstances, the Board is of the opinion that the sick industrial company is not likely to make good losses within a reasonable time. The authorities specially set up applies mind to the record and comes to the conclusion that it is just and equitable that the company be wound up. Sub-section (2) sets out that the High Court shall, on the basis of the opinion of the Board, order winding up of the sick industrial company and may proceed and cause to proceed with the winding up of the sick industrial company in accordance with the provisions of the Companies Act. Under section 433 of the Companies Act and more specifically (F) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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