Hemant Gupta, J. - (1.) THE petitioner has sought winding up of respondent company under Sections 433(e) read with Sections 434 and 439 of the Companies Act, 1956 on the ground of inability of the respondent company to secure payment of its admitted liability towards the petitioner.
(2.) LEARNED Counsel for the respondent relies upon the order passed by this Court on October 06, 2005 in Company Petition No. 69 of 2004 on the basis of a reference registered with the Board for Industrial and Financial Reconstruction (for short "BIFR") on 28.02.2005 to state that the proceedings in the present winding up petition cannot proceed in view of the bar contained in Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter to be referred as "the Act"). Learned Counsel for the petitioner has vehemently argued that since the amount claimed by the petitioner is admitted liability and is not part of the scheme proposed by the respondent company, therefore, the proceedings are not required to be stayed. Reference is made to Real Value Appliances Limited v. Canara Bank and Ors. In Para No. 23 of the report, Hon'ble Supreme Court has found no merit in the argument raised that the reference in the said case before the BIFR is only at the stage of registration under Section 15 of the Act and, therefore, Section 22 of the Act is not attracted. While considering Section 16(1) of the Act, it has been found that it is mandatory for the BIFR to conduct an inquiry once the reference is registered after scrutiny. It was found that it would be practically impossible for the BIFR to reject a reference outright without calling for information/documents or without hearing the Company or other parties. Whether the company seeks a declaration that it is sick or some other body seeks to have it declared as sick company, the Court found that it is necessary that the company be heard before any final decision is taken under the Act. The legislative intention is to see that no proceedings against the assets are taken before any such decision is given by the BIFR. In case the company's assets are sold or the company wound up, it may indeed become difficult later to restore the status quo ante. The Court, thus, concluded that the inquiry must be treated as having commenced as soon as the registration of the reference is completed after scrutiny and that from that time, action against the company's assets must remain stayed as stated in Section 22 till final decisions are taken by the BIFR. Infact, the said judgment was considered in Rishabh Agro Industries Limited v. P.N.B. Capital Services Limited where the apprehension that any unscrupulous litigant, after suffering an order of winding up, might approach the Board merely by filing a petition and get the proceedings in the company case stayed, the Supreme Court found that the Court has no option but to adhere to its earlier decision taken in Real Value Appliances's case (supra). It was observed that if a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it by having recourse to appropriate procedure, if necessary.
(3.) LEARNED Counsel for the petitioner has relied upon Cement Corporation of India v. : 82(1999)DLT343 ; Deputy Commercial Tax Officer and Ors. v. : [1997]2SCR1026 ; Gujarat Steel Tube Company Limited v. Virchandbhai B. Shah and Ors. Eagle Flask Industries Limited v. : (2004)8SCC640 and Modern Dies v. Symphony Comforts Systems Limited and Anr., 124 (2005) DLT 671. However, I am of the opinion that the judgments referred to are not applicable to the facts of the present case.;