BIFR reference bar blocks winding up proceedings and leaves industrial company status to the statutory forum

Once a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 is registered and inquiry is pending before BIFR, section 22(1) bars continuation of winding up or similar coercive proceedings unless the Board or Appellate Authority consents. The company court cannot proceed with winding up petitions while that protective bar operates, and the jurisdictional question whether the company is an industrial company falls within the statutory forum's enquiry. Parallel determination by the company court would be inconsistent with the special scheme of the Act. The effect is that the pending reference must be decided by BIFR, not in the company petitions.

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Issues: Whether winding up proceedings under the Companies Act could be continued when a reference by the company was already registered and pending before the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985, and whether the Company Court could still decide at that stage whether the company was an industrial company.

Analysis: The statutory scheme of the Sick Industrial Companies (Special Provisions) Act, 1985 makes a pending inquiry under section 16 the trigger for the protective bar under section 22(1). Once a reference is registered and inquiry has commenced, proceedings for winding up or similar coercive action cannot be proceeded with further except with the consent of the Board or the Appellate Authority. The question whether the company is an industrial company is part of the jurisdictional enquiry entrusted to the Board, and parallel adjudication by the Company Court would be inconsistent with the scheme of the Act. The Court also relied on the binding effect of the Supreme Court decisions treating registration of the reference as sufficient to attract the statutory bar.

Conclusion: The Company Court could not proceed with the winding up petitions, and the question whether the respondent was an industrial company had to be determined in the proceedings before the Board.

Final Conclusion: The pending BIFR reference operated as an absolute bar to further proceedings in the company petitions, leaving the jurisdictional questions to be decided by the statutory forum under the special enactment.

Ratio Decidendi: Once a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 is registered and inquiry is pending, section 22(1) bars continuation of winding up proceedings, and the jurisdictional issue whether the company is an industrial company must be decided by the Board itself.

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