Winding up barred for sick company during revival proceedings absent statutory consent

Winding up proceedings against a company declared sick could not continue while inquiry and revival proceedings were pending before the Board, because the special statutory regime under the Sick Industrial Companies Act suspended such action unless the Board or appellate authority consented. The High Court therefore could not proceed with the petitions in the absence of that consent, and the earlier appointment of a receiver did not displace the later statutory bar. The operative effect was that the winding up petitions were dismissed until the statutory process for sickness and revival had run its course.

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Issues: Whether winding up petitions against a company declared sick by the Board for Industrial and Financial Reconstruction could be proceeded with or were barred by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 in the absence of the Board's consent.

Analysis: The company had been declared a sick industrial company, and proceedings for revival were pending before the Board. The Act was treated as a self-contained code for inquiry into sickness, preparation of schemes for revival, and, where necessary, consideration of winding up. Section 22 prohibits winding up proceedings from being continued where an inquiry under section 16 is pending or a scheme is under preparation or consideration, except with the consent of the Board or the appellate authority. No consent had been obtained, and the pendency before the Board meant that the High Court could not continue with the winding up petitions. The prior appointment of a receiver was held not to override the later statutory development of proceedings before the Board.

Conclusion: The winding up petitions were barred by section 22 and could not be proceeded with by the High Court in the absence of the Board's consent.

Final Conclusion: The petitions were dismissed because the statutory scheme governing sick industrial companies had to run its course before any winding up could be pursued.

Ratio Decidendi: Where a company is under inquiry or revival consideration before the Board for Industrial and Financial Reconstruction, winding up proceedings cannot continue without the Board's consent, and the special statutory regime prevails over ordinary winding up action.

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