Winding up of sick industrial company upheld where rehabilitation was not viable and revival financing was unavailable

A sick industrial company was ordered to be wound up after the Board for Industrial and Financial Reconstruction formed the opinion that rehabilitation was not viable under the special statute. The record showed repeated failure to submit a workable revival proposal, continuing non-cooperation, no feasible financing plan, and serious doubts about technical and economic viability. The operating agency reported that the unit remained non-functional and that the promoters were not sufficiently serious or resourceful to restore viability within a reasonable time. The Board's opinion was accepted, liquidation followed, and the Official Liquidator was appointed to take over the assets and accounts in accordance with law.

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Issues: Whether, on the opinion of the Board for Industrial and Financial Reconstruction under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, the company should be ordered to be wound up.

Analysis: The company was found to have failed to submit a viable rehabilitation proposal despite opportunities and extensions. The record showed continuing non-cooperation, absence of a workable means of finance, and serious doubts regarding technical and economic feasibility. The operating agency reported that the unit was non-functional, the required funds for revival were not available, and the promoters were neither serious nor resourceful enough to restore viability within a reasonable time. The opinion of the Board therefore concluded that the company could not become viable and that winding up was justified in the public interest.

Conclusion: The opinion of the Board was accepted and the company was directed to be wound up.

Final Conclusion: The proceeding resulted in liquidation of the company, with the Official Liquidator appointed to take over the assets and accounts and to proceed in accordance with law.

Ratio Decidendi: Where the statutory opinion shows that a sick industrial company has no realistic rehabilitation prospect, lacks a viable financing plan, and is unlikely to revive within a reasonable time, the court may accept the opinion and order winding up under the special statute.

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