Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2012 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (7) TMI 534 - HC - Companies LawMisuse of the machinery provided under the SICA - continuous and systematic abuse of process resorted to by respondent with the sole motive of delaying and defeating the rights of its creditors - Held that:- It was felt that the existing institutional arrangements and procedures for revival and rehabilitation of potentially viable insolvent industrial company were both inadequate and time consuming and a comprehensive law was needed - Section 22 (1) provides that in case the inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration by BIFR or any appeal under Section 25 is pending then certain proceedings against the industrial company are to be suspended or presumed to be suspended and if it is intended by the concerned party that the proceedings are to be continued against the sick industrial company then prior consent or approval of BIFR should be taken. Once the enquiry under Section 16 is treated to be pending, the provisions of Section 22 are attracted and the company court cannot proceed further the matter. In present case it appears to be one where prima facie the provisions of Section 22 of the SICA are taken undue advantage of. Therefore, at least in those cases where the reference was rejected in previous years on merits by the BIFR, guidelines can be issued to ensure that fresh references in subsequent years should not be mechanically entertained - direction that BIFR should formulate necessary Practice Directions as where the references were rejected previously, the BIFR can pass appropriate directions refusing to extend the benefit of Section 22 of the SICA.
|