2002 (11) TMI 659 - HC - Companies Law

Summary

Issues:
1. Whether the company petition for winding up should be entertained.
2. What is the fate of the company petition in light of the company being declared a sick company under SICA.
3. Whether the court can proceed with the winding up petition when the matter is sub-judice before BIFR.

Analysis:

Issue 1:
The petitioner claimed to be a creditor of the respondent-company, alleging non-payment of debt despite demand, leading to a petition for winding up under section 433(e) of the Companies Act. The respondent-company raised legal defenses against the petition.

Issue 2:
The respondent-company, declared a sick company under SICA, had an order for winding up pending before BIFR, which was under appeal before AAIFR. The court noted that the fate of the winding up petition was intertwined with the proceedings before BIFR and AAIFR. The court highlighted that all claims against the company, including the petitioner's, would be adjudicated upon as per the procedure prescribed under the Companies Act based on the outcome of the BIFR proceedings.

Issue 3:
The court observed that the question of whether the company should be wound up was already sub-judice before the competent authority under SICA. It emphasized that if the order of BIFR for winding up was upheld, the matter would come before the court for a final winding up order. Conversely, if the order was set aside and the company was to be revived, the claims of creditors, including the petitioner, would still need to be examined by BIFR. The court concluded that it could not proceed to decide the winding up petition on its merits due to the ongoing proceedings before BIFR and AAIFR, highlighting the legal restriction on parallel proceedings under SICA.

In conclusion, the court found no merit in entertaining the petition due to the pending proceedings before the specialized authorities. The petition was dismissed with no costs awarded.