Winding-up petition and sick company rehabilitation: debt claim left to statutory revival process, petition dismissed.

A winding-up petition based on alleged inability to pay debts was held not maintainable where the respondent had already been found to be a sick industrial company and rehabilitation proceedings were pending before the statutory forum. The Court treated the rehabilitation framework as the governing process for addressing the petitioner's outstanding claim and found it unnecessary to examine whether the ingredients of section 433(e) of the Companies Act, 1956 were otherwise established. As the proposed rehabilitation scheme was the appropriate statutory avenue, the petition was not entertained and was dismissed.

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Issues: Whether the company petition seeking winding up on the ground of inability to pay debts was maintainable in view of the proceedings before the Board for Industrial and Financial Reconstruction and the proposed rehabilitation scheme.

Analysis: The petition was founded on alleged outstanding dues and a notice said to have been issued under section 434 of the Companies Act, 1956. The respondent contended that it had been found to be a sick industrial company and that rehabilitation proceedings were underway under the statutory framework governing sickness and revival. Once the competent statutory authority had concluded that the respondent was a sick industrial company capable of revival through a rehabilitation scheme, the Court found it unnecessary to examine whether the ingredients of section 433(e) were otherwise made out. The outstanding claim of the petitioner was left to be addressed in the rehabilitation process, if permitted by law.

Conclusion: The petition for winding up was not entertained and was dismissed.

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