S.A.HAKEEM Ag. C.J. - (1.) This appeal is directed against the winding up order dated 7-1-1994 passed by the learned Company Judge in Company Petition No. 10 of 1988.
(2.) In order to appreciate the question of law arising in this case, it is appropriate to briefly refer to undisputed facts and the chronological events leading to passing of the impugned order.
(3.) The appellant is a public limited Company incorporated under the provisions of the Companies Act 1956, having its Registered Office as well as Factory at Mysore. The 1st respondent herein claiming to be a creditor, filed a petition for winding up of the Company on the ground under Sections 433(e) and 434(1)(a) and (c) of the Companies Act seeking winding up of the Company for non-payment of certain amounts due to it. The said petition was admitted on 12-2-1988. While the said petition was pending, the Company having become a sick industrial unit made a reference before the Board for Industrial and Financial Reconstruction (hereinafter referred to as 'BIFR') under Section 15(1) of the Sick Industrial Companies - (Special Provision) Act, 1985 (hereinafter referred to as 'the Act'). The Company Petition was being adjourned from time to time until 16-6-1989 when it was adjourned sine die in view of the pendency of the reference before the BIFR. It transpires that the BIFR prepared a scheme for implementation. During the pendency of the said proceedings, a proposal was made for one time settlement on payment of certain sums of money. This proposal failed as the Company was not in a position to raise the necessary funds. Thereupon, the BIFR issued a show cause notice as to why the Company should not be directed to be wound up. This notice was challenged before the Appellate Authority for Industrial and Financial Reconstruction (hereinafter referred to as 'AAIFR'). By its order dated 20-7-1993, the AAIFR dismissed the appeal, inter alia, with the following observations:- "No useful purpose would be served by entertaining the appeal at this stage particularly, when ample opportunities are available to the appellant to submit proposals before the BIFR, as indicated in the impugned order. Such opportunities being available, it is not required of this authority to proceed with this matter further at this stage. As far as the representatives of the workers are concerned, it was pointed out to them that they are at liberty to urge all their contentions and proposals before the BIFR when this matter is next taken up by it.";