Winding-up petition against a sick company was not entertained because debt claims had to be proved in pending liquidation proceedings.

A creditor's winding-up petition under the Companies Act, 1956 was not entertained because the respondent-company had already been declared a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985 and a reference for winding up had been made under section 20(2). With final winding-up proceedings already pending, the creditor was required to establish its claim before the Official Liquidator along with other creditors. Continuing the separate petition would serve no useful purpose, while the creditor's right to prove the debt remained protected within the winding-up process. The petition was therefore disposed of without proceeding further.

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Issues: Whether a creditor's winding-up petition under section 433(e) of the Companies Act, 1956 could be entertained when the respondent-company had already been declared sick and a reference for winding up was pending in separate proceedings.

Analysis: The company had been declared a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985, and the BIFR had already referred the matter for winding up under section 20(2). As a final winding-up proceeding was pending before the Court, the creditor's claim was required to be established in those proceedings before the Official Liquidator, along with the claims of other creditors. In that situation, continuing the present petition would serve no useful purpose, and the petitioner's rights to prove the debt remained protected in the winding-up process.

Conclusion: The petition was not entertained and was disposed of against the petitioner.

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