Sethi, J. - (1.) On being satisfied that the appellant-company was unable to meet the obligations of making the payment of the amounts due to the creditors, the learned single Judge of the High Court vide his order dated 5th September, 1997 directed its winding up. Official Liquidator attached to the Court was appointed as Liquidator of the Company with directions to take charge of the assets and other properties of the appellant-company. The notice of the winding up order was directed to be published in the Indian Express and Dainik Tribune. The operation of the order of the learned single Judge was stayed by the Division Bench of the High Court in Civil Appeal No. 26 of 1997 on 18-9-1997. The appellant thereafter filed Reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the 'Act') before the Board for Industrial and Finance Reconstruction (hereafter referred to as "the Board"). The appellant then moved an application in the High Court under Section 22 of the Act with a prayer for staying the proceedings arising out of the Company Petition No. 111 of 1985 which was the subject-matter of Company Appeal No. 26 of 1997. The application was rejected by the Division Bench of the High Court vide the order impugned herein. After holding that as no proceedings under the Act of 1985 were pending on the date of passing of the winding up order, the application under Section 22 of the Act was misconceived. It was further found that no such proceedings were pending even on the date of passing of the said order by the Division Bench in Company Appeal No. 26 of 1997 and only on the basis of a Reference made to the Board the proceedings of winding up petition could not be ordered to be held in abeyance. Not satisfied with the order of the Division Bench of the High Court, the appellant-company has preferred this appeal.
(2.) Some of the facts relevant for the purpose of determining the controversy in this appeal are that the respondent-Bank filed a Company Petition No. 111/95 on 30-9-1995 under Section 433(e) and (f) and Section 434 of the Companies Act, 1956 for winding up of the appellant-company on the ground that the company had been unable to pay the loan of Rs. 50 lacs and the agreed rate of interest thereon. On 14-12-1995 a compromise was arrived at between the parties whereby the appellant-company agreed to pay monthly instalments as per stipulations made in the compromise deed. In pursuance to the compromise arrived at between the parties, the appellant-company claimed to have paid the instalments and completed the full payment of principal amount of Rs. 50 lacs. Regarding interest, the company referred to further transactions between the bank and its sister concerns. However, instead of agreeing with the request of the company to return the collateral security of 5 lacs shares of Rs. 10/- each aggregating to Rs. 50 lacs, the respondent-bank is stated to have insisted for payment of instalment for the months of October and November, 1996 as per compromise. It is contended that having failed to get the security the appellant-company per force had defaulted the payment of balance amount towards interest with the result that the respondent-bank moved an application before the Company Judge in Company Petition No. 111/95 praying for revival of the winding up petition. The learned single Judge admitted the position for hearing and passed an order for issuance of publication vide its orders dated 14-3-1997. Feeling aggrieved, the appellant herein preferred a Special Leave Petition in this Court which was withdrawn on 28th August, 1997 purportedly with a view to approach the learned Company Judge with fresh proposal of settlement. An application was moved before the learned Company Judge wherein the appellant proposed to pay alleged balance principal amount of Rs. 14,11,010/- and the amount of Rs. 7,06,120/- as interest thereon in monthly instalment of Rs. 2 lacs each to be paid on or before 7th day of each English calendar month together with future interest at the rate of 12% per annum thereon on a reducing balance basis till the liquidation of the entire amount. The aforesaid application was dismissed by the learned Company Judge on 5th September, 1997 when he directed the winding up of the company. As noticed earlier, during the pendency of the appeal filed against the order of the learned Company Judge, a petition for Reference under Section 15(1) of the Act was preferred before the Board on 30th September, 1997.
(3.) Shri Anurag Kumar Aggarwal, the learned Counsel appearing for the appellant has submitted that the Division Bench of the High Court committed a mistake of law in interpreting Section 22 of the Act and by holding that the proceedings appearing in Section 22(1) of the Act, meant the proceeding up to the stage of passing of winding up order by the Court and not thereafter. It is contended that the High Court completely ingnored the mandate of the Section which provided that no proceedings for the winding up of the industrial company shall lie or be proceeded with further in respect of the industrial company when an enquiry under Section 16 is shown to be pending or any claim referred to under Section 17 or under preparation or consideration of sanctioned scheme or under the implementation or when an appeal under Section 25 relating to an industrial company was pending. According to the learned Counsel, after the filing of the application under Section 15 an enquiry under Section 16 of the Act is deemed to be pending warranting the stay of the proceedings in terms of Section 22 of the Act.;