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TMI Blog2003 (6) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, Sri V. Srinivas represents that when the respondent-company is not an industrial company and merely because the matter has been referred to BIFR and the same is pending enquiry, the proceedings in this Company Petition cannot be stopped and it is open to the Company Court to consider whether the respondent- company is an industrial company or not and in the event of the Company Court comes to the conclusion that the respondent-company is not an industrial company notwithstanding the pendency of the petition before the BIFR the Company Petition can be proceeded further. 4. Per contra Sri V.S. Raju, learned Counsel for the respondent would seek to contend that once the application is registered by the BIFR, the proceedings shall not be further proceeded with by the Company Court. 5. Having regard to the respective contentions, the short point that falls for determination at the threshold of these two petitions is obviously the jurisdictional question, inasmuch as there has been no gain saying that the application before the BIFR has been registered and is pending enquiry and it is not known whether the BIFR has been satisfied itself as to whether the respondent-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not eligible for tax exemption. In that view of the matter, in the instant case the learned Counsel for the petitioners would contend that the respondent-company is similarly placed with that of the petitioner s units in the above referred Judgment and, therefore, for want of manufacturing process, the respondent-company cannot be called as an industrial unit. 8. The objects of the company with which it was registered as set forth, inter alia, in para 5 of the petition shows the position otherwise. Manufacturing process is also one of the objects set forth for which the company was established. Even assuming for a moment that the contention of the learned Counsel that the respondent-company undertakes only bottling of the cylinders of LPG and distributes the same to the consumers and, therefore, the respondent-company is not an industrial company it has to be seen as to whether such an enquiry is open to the Company Court when once the matter is pending investigation and determination before the BIFR, having regard to the bar engrafted under section 22 of the SICA. It is appropriate here at the outset to consider the provision germane in the context for consideration for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he SICA, obviously sub-section (1) of section 22 comes into operation. The bar engrafted under the said section is absolute and no proceeding pending before the Company Court, notwithstanding any provision contained to the contra in the Companies Act, shall be proceeded with. Having regard to the same it is for the BIFR first to satisfy itself whether in a given case the company which approaches the Board is an industrial company or not. The question as to whether a particular company is an industrial company or not need not necessarily be consi-dered by this Court at this juncture since it comes within the realm of the jurisdiction of the Board. It is well-settled that it is within the purview of a Court or the Tribunal as the case may be to adjudicate about its own jurisdiction. Therefore, rightly or wrongly if an application is registered with the Board and is pending enquiry for determining whether the company is really sick industrial company or not the provisions of section 22(1) would come into play proprio vigore. 10. Lengthy arguments have been addressed by the learned Counsel for the petitioner to show what is an industrial company and whether the respondent-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine the same since it pertains to the jurisdictional aspect. When it is within the exclusive realm of BIFR by necessary implication the jurisdiction of the Company Court is ousted to determine whether the respondent-company is really a sick industrial company or not, even for the limited purpose of determining whether this Court can proceed with the enquiry or not. Such a parallel adjudication might lead to chaos. In that view of the matter, since it is a jurisdictional aspect it does not open to this Court to delve into the aspect as to whether the respondent-company answers the definition of sick industrial company or not. If the given company is not an industrial company, the reference would be rejected at the threshold by the Board. If it is an industrial company, then it needs to be seen by the Board whether it is a sick industrial company or not. Therefore, the two things, namely, whether the given undertaking is an industrial company and whether the said industrial company is a sick industrial company or not are the integral parts of the same proceeding which have to be considered by the Board. It is not open to contend that what is expected to be determined by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs against the assets are taken before any such decision is given by the BIFR for in case the Company s assets are sold, or the company wound up it may indeed become difficult later to restore the status quo ante ..." (p. 2071) In that view of the matter, the Apex Court rejected the contention. 12. The above Judgment has been followed in Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. (2000) 5 SCC 515. That was a case where in fact winding up order was passed on 5-9-1997. Consequently, a liquida- tor was appointed to take charge of the assets and other properties of the company in liquidation. On an appeal filed against the said order, a Division Bench of the High Court stayed the operation of the order. In the meanwhile, the Company filed a reference under section 15(1) of the SICA before the BIFR and thereafter moved an application before the High Court under section 22 of the said Act for stay of the proceeding arising out of the company petition. The Division Bench before which the appeal was pending rejected the application against which they carried the matter to the Apex Court. Four contentions were raised before the Apex Court, namely, ( i ) as no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany is pending. But it cannot be said that despite the existence of any of the aforesaid exigencies the provision of section 22 would not be attracted after the order of winding up of the company is passed. The words no proceedings for winding up... shall lie or be proceeded with further , leave no doubt that the effect of the section would be applicable even after the winding-up order is passed." (p. 516) 13. In the instant case it is clear that the proceedings in fact have been registered by the BIFR and they are pending enquiry for determination as to whether the respondent-company is a sick industrial company or not. Once that reference is registered as discussed by me hereinabove and as laid down by the Apex Court. Section 22(1) of the SICA comes into operation. The contention that mere registration will not operate as a bar and still it is to be seen whether it is an industrial company or not, in that view of the matter merits no consideration particularly having regard to the judgment of the Apex Court referred to above. Equally, the other contention that a sheer vexatious application filed by the unscrupulous company so as to thwart the proceedings before the Company ..... 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