Singhvi, J. - (1.) THESE appeals are directed against order dated 8 -3 -2001, passed by the learned company judge in the Company Application Nos. 542 of 1999 and 11 of 2001 vide which he declared that in view of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 ('the Act'), the court cannot take further proceedings in Company Petition No. 108 of 1997 and rejected the appellants' prayer to modify orders dated 25 -7 -1997, 5 -9 -1997 and 3 -10 -1997.
(2.) THE facts of the case are that on a petition filed by the respondent under Section 433 read with Section 434 of the Companies Act, 1956, which was registered as the Company Petition No. 108 of 1997, for winding up of the appellant, the learned company judge ordered issuance of notice on 25 -7 -1997 and restrained it from alienating the assets of the company except in regular course of business. After service of notice, the learned company judge passed order dated 5 -9 -1997, vide which he modified the ex parte interim order and gave liberty to the appellant to sell the assets and properties of the company with the permission of the IDBI subject to the condition that out of the sale proceeds, a sum of Rs. 1 crore shall be kept by the monitoring bank, i.e., State Bank of Patiala, till further orders. On 3 -10 -1997, the learned company judge took notice of the statement made by the appellant's counsel that out of the principal amount of Rs. 75 lakhs, a sum of Rs. 29 lakhs had already been paid and the remaining amount would be paid within two months or earlier to that and requested for adjournment. The learned company judge accepted his request and adjourned the case with a direction for filing written statement. Thereafter, the appellant is said to have paid Rs. 46 lakhs to the respondent and the dispute regarding the rate of interest is pending before the Civil Court at Rajpura. During the pendency of the winding -up petition, the appellant made a reference under Section 15 of the 1985 Act. The Board for Industrial and Financial Reconstruction ('BIFR') entertained the reference, and initiated enquiry under Section 16 of the 1985 Act. By taking advantage of this, the appellant filed an application under Section 22 for staying the proceedings of Company Petition No. 108 of 1997. The same was registered as Company Application No. 542 of 1999. It filed another application under Section 151 of the Code of Civil Procedure, 1908, read with Rule 9 of the Companies (Court) Rules, 1959, for modification of orders dated 25 -7 -1997, 5 -9 -1997 and 3 -10 -1997 and also for dismissal of Company Petition No. 108 of 1997 as having become infructuous. The second application was registered as Company Application No. 11 of 2001.
(3.) AFTER hearing the parties, the learned company judge declared that in view of the embargo contained in Section 22 of the 1985 Act, no further proceedings can be taken in the winding up petition and disposed of both the applications with the following observations : "A perusal of the above, reveals that in case of a pending proceeding inter alia before the company court under the provisions of the Companies Act, 1956, after initiation of enquiry under Section 16, the matter is not to be proceeded with further. In terms of the provisions of Section 22, proceedings in this case are adjourned sine die to await the determination by the BIFR in respect of the pending proceedings, in order to comply with the mandate of Section 22, namely, not to proceed with the matter further. The decision relied upon by the learned counsel for the appellant is wholly irrelevant in so far as the present controversy is concerned. This order shall also dispose of C.A. No. 11 of 2001 filed by the applicant. In the aforesaid application, the claim of the petitioner as narrated during the course of arguments is that orders dated 25 -7 -1997/5 -9 -1997, passed by this court in C.A. No. 231 of 1997 in C.P, No. 108 of 1997 should be modified, in order to grant liberty to the applicant to dispose of the properties in question, primarily on the basis of the submission that the entire principal amount has allegedly been paid by the applicant to the petitioner. In view of Section 22, extracted above, it is not open to this court to proceed any further with this matter. It is the opinion of this court that it is not within the purview of this court to modify the aforesaid orders while the matter is pending before the BIFR. Admittedly, proceedings before the BIFR had started on 12 -7 -1999, when a reference was registered under Section 15 by the BIFR.";