SICA restraint does not bar creditors participating in BIFR inquiry and preserves their right to renew winding-up petitions if dismissed.

Where a statutory reference to the administrative tribunal under the insolvency regime is pending and a statutory restraint bars the company court from proceeding with winding up, the court may nonetheless permit petitioning creditors to participate in the tribunal's inquiry to protect their interests, and may reserve their procedural right to file or renew winding up petitions if the reference is dismissed; the tribunal is to dispose of the reference expeditiously and creditors retain the ability to pursue winding up thereafter.

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Issues: (i) Whether the company court can permit creditors who have filed winding-up petitions to participate in the inquiry pending before the BIFR under section 15 of SICA despite the restraint under section 22 of SICA; (ii) Whether the petitioners' right to prosecute or maintain winding-up petitions is lost if the BIFR reference is dismissed.

Issue (i): Whether the company court may allow participation of petitioning creditors in the BIFR inquiry under section 15 of SICA notwithstanding section 22 of SICA.

Analysis: The Court examined the interaction between the Companies Act winding-up proceedings and the ongoing reference before the BIFR under section 15 of SICA, noting that section 22 restricts the company court from proceeding with winding-up while a SICA reference is pending but does not prohibit measures that safeguard creditors' interests or permit their participation in the BIFR inquiry; the BIFR or its appointed officer will examine the company's financial position including creditors' claims, and the court can direct that creditors be allowed to participate in that inquiry without violating section 22.

Conclusion: The Court held that petitioning creditors may be permitted to participate in the BIFR inquiry in reference case No. 303 of 2002 and granted liberty to participate in those proceedings in support of their debts.

Issue (ii): Whether the petitioners' right to prosecute winding-up petitions is extinguished if the BIFR dismisses the reference.

Analysis: The Court considered the contingency that the BIFR might dismiss the reference and observed that such an eventuality would not automatically deprive creditors of the right to prosecute winding-up; the Court reserved the right of petitioners to file or renew petitions under section 433 of the Companies Act on the same cause of action if the reference is rejected, to be examined on merits later within the statutory framework.

Conclusion: The Court held that the petitioners' right to file or renew winding-up petitions is preserved and expressly granted liberty to do so in the event the BIFR reference is rejected.

Final Conclusion: The petitions are disposed of by recording these observations, permitting petitioners to participate in the BIFR inquiry and granting liberty to file or renew winding-up petitions if the BIFR reference is dismissed; the BIFR is directed to dispose of the reference expeditiously within the time fixed.

Ratio Decidendi: Where a SICA reference under section 15 is pending and section 22 restrains the company court from proceeding with winding-up, the court may nonetheless protect creditors' interests by permitting their participation in the BIFR inquiry and may reserve their procedural right to prosecute winding-up petitions should the SICA reference be dismissed.

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