Decided on November 21,2016

Parekh Aluminex Ltd. Respondents


S.C.GUPTE, J. - (1.) This application raises an important question as to when can an inquiry within the meaning of section 16(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, be said to have commenced, when the BIFR receives information relating to a sick industrial company within the meaning of section 16(1) (b) of the Act, so as to trigger the stay of proceedings against the industrial company under section 22 of that Act.
(2.) Company Application (L) No. 529 of 2016 is taken out by the shareholders of the respondent-company, which is sought to be wound up in the present petition. These shareholders between them hold 14.76 per cent, paid-up share capital of the respondent-company. It is their case that the net worth of the company has completely eroded and it has become a sick industrial company, liable to be reconstructed by the Board for Industrial and Financial Reconstruction (the "BIFR") under the Sick Industrial Companies (Special Provisions) Act, 1985 (the "SICA"). The applicants have, accordingly, submitted information to the BIFR for an inquiry under section 16(1)(b) of the SICA. It is their case that the BIFR having received this information and in fact, having allotted a miscellaneous petition number thereto, an inquiry' is deemed to have commenced within the meaning of the Explanation to section 16(3) of the SICA and that, in the premises, the present proceedings for winding up of the respondent-company cannot be proceeded with except with the consent of the BIFR, in accordance with section 22 of the SICA. The application, accordingly, prays for an order that the hearing of the company petition be deferred until after the conclusion of the inquiry' pending before the BIFR.
(3.) This application is taken out in Company Petition No. 136 of 2014. In this petition, the petitioner's claim arises on a short-term loan aggregating to Rs. 67 crores given by the petitioner to the respondent for its business. The respondent had issued various cheques aggregating to Rs. 67 crores towards repayment of this loan. The cheques were dishonoured on presentation for payment due to lack of funds. The company petition is filed on the basis of this debt. The petitioner had simultaneously filed a summary suit for recovery of these dues. On a summons for judgment in that suit, this court granted conditional leave to the respondent to defend the suit subject to deposit of principal amount of Rs. 67 crores in this court. The respondent carried this order in appeal, which came to be rejected by a Division bench of this court. An SLP filed by the respondent from that rejection was dismissed by the Supreme Court. The petitioner has thereupon applied for a decree under the provision of Order 47, Rule 27 of the Code of Civil Procedure, 1908, for failure of the respondent to deposit the amount. In the premises, there is factually no defence to the petitioner's debt and the consequent inability of the respondent to pay that debt. Besides this petitioner, there are several other creditors of the respondent-company, who have filed their own winding up petitions against the respondent. In the premises, there is a case for taking up the petitions expeditiously for admission. It is, however, the case of the applicants before this court that by reason of the pendency of the miscellaneous petition of the applicants before the BIFR for an inquiry under section 16(1) of the SICA, the provision of stay of proceedings under section 22 of the SICA is triggered.;

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