Statutory bar on winding up of sick companies continues during rehabilitation scheme implementation without BIFR consent.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 bars winding up proceedings against a sick industrial company while an inquiry is pending, a scheme is under preparation or consideration, or a sanctioned rehabilitation scheme is under implementation, unless consent is obtained from the Board or Appellate Authority. Where the company had already been declared sick and the sanctioned scheme was still being implemented, a winding up petition filed without such consent fell within the statutory prohibition. Section 20 preserves the Board's role within the Act's rehabilitation framework, so the winding up process cannot proceed in breach of that scheme-related bar.

---

---

Issues: Whether a winding up petition under the Companies Act, 1956 is maintainable when a sanctioned rehabilitation scheme under the Sick Industrial Companies (Special Provisions) Act, 1985 is under implementation and no consent of the Board for Industrial and Financial Reconstruction has been obtained.

Analysis: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 creates a statutory bar against proceedings for winding up of an industrial company where an inquiry is pending, a scheme is under preparation or consideration, or a sanctioned scheme is under implementation, unless consent is granted by the Board or the Appellate Authority. The company was already declared sick, a rehabilitation scheme had been sanctioned, and the scheme was under implementation when the petition was filed. No consent of the Board had been obtained at that stage. In those circumstances, the prohibition under Section 22(1) operated directly against continuation of the winding up proceedings, and Section 20 of the Act preserved the Board's role in forwarding a winding up opinion in accordance with the statutory framework.

Conclusion: The winding up petition was not maintainable and was liable to be dismissed for want of BIFR consent during the subsistence of the statutory bar.

Final Conclusion: The decision reaffirms that winding up proceedings cannot proceed against a sick industrial company while a sanctioned rehabilitation scheme is under implementation unless the statutory authority grants consent.

Ratio Decidendi: Proceedings for winding up of a sick industrial company are barred under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 during the pendency or implementation of the rehabilitation process, unless the requisite consent of the Board or Appellate Authority is obtained.

---