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TMI Blog1994 (9) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... f jurisdiction by a High Court, that unbridled power is given to the Board and as such the Board can be arbitrary, and it can adopt different norms and different procedures in the matters coming up before the Board and as such, it is discriminatory. 4. Section 20 of the Act reads thus : 20. Winding up of sick industrial company. (1) Where the Board after making inquiry under section 16 and after consideration of all the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of opinion that it is just and equitable that the sick industrial company should be wound up, it may record and forward its opinion to the concerned High Court. (2) 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 sick industrial company in accordance with the provisions of the Companies Act, 1956 (1 of 1956). (3) For the purpose of winding up of the sick industrial company, the High Court may appoint any officer of the operating agency if the operating agency gives its consent as the liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts due to the banks and financial institutions, to the extent possible from the non-viable sick industrial companies through liquidation of those companies. (2) It has been the experience that the existing institutional arrangements and procedures for revival and rehabilitation of potentially viable sick industrial companies are both inadequate and time consuming. A multiplicity of laws and agencies makes the adoption of a co-ordinated approach for dealing with sick industrial companies difficult. A need has, therefore, been felt to enact, in public interest, a legislation to provide for the timely detection of sickness in industrial companies and for expeditious determination by a body of experts of the preventive, ameliorative, remedial and other measures that would need to be adopted with respect to such companies and for enforcement of the measures considered appropriate with utmost practicable despatch. (3) The salient features of the Act are : (i) application of the legislation to the industries specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, with the initial exception of the scheduled industry relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ability and integrity and standing with special knowledge and professional experience of not less than 15 years. The other provisions relate to the conditions of service of the chairman and members of the Board and also the staff of the Board and the Appellate Authority. The proceedings of the Board are deemed to be judicial proceedings as provided under section 14 of the Act. Section 13 of the Act lays down the procedure for conducting proceedings before the Board and the Appellate Authority. It satisfies all the requirements of a judicial proceeding. Chapter III relates to references, inquiries and the schemes relating to sick industries. Section 20 falls under Chapter III of the Act. It comes after the provision relating to rehabilitation of a sick industry by giving financial assistance. Section 21 relates to operating agency to prepare, complete inventory, etc. Sections 22 and 22A also fall in Chapter III. Chapter IV relates to proceedings in case of potentially sick industrial companies, misfeasance proceedings, appeal and miscellaneous matters. Section 22 falls in Chapter III, but it relates to suspension of legal proceedings, contracts, etc., against a sick industry in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing winding up of a company have to satisfy certain conditions as prescribed under sections 439 or 440, as the case may be, of the Companies Act to maintain the proceedings. When once the report is submitted by the Board, no such requirements of section 439 or 440, as the case may be, of the Companies Act need be looked into. In this case, we are not concerned with Chapters III and IV of Part VIII relating to voluntary winding up and winding up subject to supervision of court . The report of the Board would become the basis for a proceeding to be continued against the sick industrial company for winding up in accordance with the provisions of the Companies Act. Sub-section (2) of section 20, which is already reproduced, specifically states that the High Court shall, on the basis of the opinion of the Board, order winding up of a sick industrial company and may proceed or cause to proceed with the winding up of the sick industrial company in accordance with the provisions of the Companies Act. Therefore, it is clear that the opinion furnished by the Board will only form a basis for the proceedings to be continued against the sick industrial company for the purpose of winding up a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ushed aside. Even otherwise, it is a jurisdiction conferred upon the High Courts under the Companies Act. Any jurisdiction conferred on the High Courts under a statute has to be exercised, subject to the limitations prescribed under that statute, and such jurisdiction can also be taken away or modified by appropriate amendment to the very statute, or by any other law passed by the competent legislative body. In the instant case, even if it were to be held that section 20 of the Act, to a certain extent, mutilates the jurisdiction of the High Court, it cannot be held to be unconstitutional on that ground. Because both the enactments are passed by Parliament, therefore, it is open to Parliament to modify the powers conferred on the High Courts under the Companies Act. However, one thing is clear on a reading of sections 20 and 22 of the Act that in the case of the sick industrial company to which section 22 of the Act is attracted, proceedings for winding up of such sick industrial company cannot be initiated in the High Court, except with the consent of the Board, or, as the case may be, of the Appellate Authority. Therefore, Parliament very advisedly made the provisions contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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