TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Winding-up petition dismissed for lack of Board consent under Sick Industrial Companies Act</h1> <h3>Sanjay Forging & Steel Industries Versus Bombay Forgings (P.) Ltd.</h3> The court dismissed the winding-up petition as void ab initio for not obtaining prior consent from the Board under section 22(1) of the Sick Industrial ... Compromise and arrangement, Company when deemed unable to pay its debts Issues:1. Whether a winding-up petition filed without obtaining prior permission under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 from the Board for Industrial and Financial Reconstruction against a company already declared as a sick unit is void ab initio and liable to be dismissed.2. Whether a winding-up petition can be kept alive by keeping it in abeyance pending the inquiry or preparation of a scheme under the SIC Act.Analysis:1. The primary issue in this judgment revolves around the requirement of obtaining prior permission under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SIC Act) before filing a winding-up petition against a company declared as a sick unit. The court emphasizes that if a reference is made to the Board for Industrial and Financial Reconstruction (BIFR) prior to filing the petition, and such reference is pending, then no winding-up proceedings can be initiated without the consent of the Board. The court highlights the distinction between proceedings initiated before and after the reference to BIFR, emphasizing the mandatory nature of obtaining the Board's consent in such cases. The judgment cites precedents, including the Supreme Court decision in Gram Panchayat v. Shree Vallabh Glass Works Ltd., which reinforce the necessity of prior consent from the Board before pursuing winding-up proceedings against a sick company. The court also refers to local decisions, such as Ramniklal and Co. v. Wallace Flour Mills Co. Ltd., where it was held that proceedings can be kept in abeyance if the company is declared sick after the petition is filed.2. The second issue addressed in the judgment pertains to whether a winding-up petition can be maintained by keeping it in abeyance pending an inquiry or the preparation of a scheme under the SIC Act. The court clarifies that in cases where a company is declared as a sick unit prior to the filing of the petition, and the company claims protection under section 22(1) of the SIC Act, the petition may be dismissed if filed without the Board's prior consent. The judgment cites the case of G.J. Gelatine Products Ltd., In re, where a similar claim was accepted, and the petition was dismissed. Additionally, the court refers to the Gujarat High Court's decision in Testeels Ltd. v. Radhaben Ranchhodlal Charitable Trust, which upheld the dismissal of a winding-up petition filed without the Board's consent. Based on the legal provisions and precedents discussed, the court concludes that the petition in question is not maintainable due to the absence of prior consent from the BIFR.In conclusion, the judgment dismisses the winding-up petition for failing to obtain the necessary prior consent from the Board under section 22(1) of the SIC Act. The court's decision is supported by legal provisions, precedents, and a clear interpretation of the statutory requirements for initiating winding-up proceedings against a company declared as a sick unit.
TaxTMI 
TaxTMI 
