TMI Blog1993 (4) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... or to take charge of the assets and records of the company. It is averred in the application that the respondent-applicant company is a sick industrial company within the meaning of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "the Act"). The company has made a reference to the Board for Industrial and Financial Reconstruction (hereinafter referred to as "the Board") for determining the measures which shall be adopted with respect to the company and as per the communication received by the applicant, the said reference stands registered as Case No. 24 of 1993. This application came up for orders on March 31, 1993, on which date, learned counsel for the company was asked to fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry under section 16 is pending before the court and in view of section 22 of the Act, proceedings for winding up, if any, have to be stayed, has placed reliance upon the judgment of a single judge of the Allahabad High Court in Industrial Finance Corporation of India v. Maharashtra Steels Ltd. [1990] 67 Comp Cas 412. In holding so, after examining the Act, it was held that the reference made, when on consideration is registered, the Board cannot thereafter decline to enquire into the matter. On inquiry, it may come to the conclusion that the application for treating the company concerned as a sick unit is not acceptable and thus reject the same. In Gram Panchayat v. Shree Vallabh Glass Works Ltd. [1991] 71 Comp Cas 169 (SC), it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company has become a sick industrial unit or not. The procedure which is to be followed by the Board or the steps which are required to be taken by it are enumerated in sub-sections (2) to (6) of section 16. Orders, if any, on completion of inquiry are required to be made under section 17 of the Act. When an order has been made, schemes, etc., are to be prepared under section 18 of the Act It was not a case in which only a reference has been received. But after receipt of the same on October 13, 1992, the further steps which the Board took within the next four months was to register the same, which in other words imply that the Board had on consideration, thought it fit that an inquiry deserves to be made. Further steps for conducting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the fact that the Board had in the said case registered the reference of Kanwar Papers Pvt. Ltd. Registration of a reference was held to amount to pendency of inquiry as contemplated under section 16 of the Act. In the result, the application is allowed and further proceedings in Company Petition No. 4 of 1992 are stayed till further orders reserving liberty to the petitioner to approach the Board for obtaining its consent to continue with these proceedings or taking such other remedies against the applicant-company as may be deemed fit. Company Petition No. 4 of 1992 : In view of the order passed in Company Application No. 2 of 1993, further proceedings in the petition are hereby stayed. Parties are at liberty to get the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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