Company Court jurisdiction to permit sale of sick company assets after BIFR recommends winding up and seeks High Court directions.

Once the BIFR has recommended winding up and directed the parties to seek further directions from the High Court, the Company Court may act under section 20(4) of the Sick Industrial Companies (Special Provisions) Act, 1985, read with commencement of winding up under section 441 of the Companies Act, 1956. On that basis, the court may permit sale of the sick company's assets without sending the matter back to the BIFR. On the facts, the challenge based on absence of separate Government approval and alleged inadequacy of consideration was rejected, as the sale had already been negotiated and approved within the corporate process.

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Issues: Whether the Company Court had jurisdiction to permit sale of the sick company's assets after the BIFR recommended winding up and directed the parties to seek further orders from the High Court, and whether the permission could be challenged on the ground of want of Government approval or inadequacy of consideration.

Analysis: The proceedings had reached the stage where the BIFR, after recording that the company was not likely to become viable, forwarded its opinion for winding up and directed the parties to approach the High Court for further directions. In that situation, the High Court treated the matter as falling within its jurisdiction under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985, read with the commencement of winding up under section 441 of the Companies Act, 1956. The Court also held that, on the facts, no separate Government approval was required and that the objection as to adequacy of consideration could not be entertained at that stage, particularly when the offer had already been negotiated and approved in the corporate process.

Conclusion: The permission granted by the Company Judge to execute the sale deed was upheld and the objections to jurisdiction, Government approval, and price were rejected.

Final Conclusion: The appeals were dismissed, and the order permitting sale of the property in favour of the purchaser was left undisturbed.

Ratio Decidendi: Once the BIFR has recommended winding up and directed the parties to seek directions from the High Court, the Company Court can act on the matter and permit sale of assets under section 20(4) of the Sick Industrial Companies (Special Provisions) Act, 1985, without requiring the matter to be sent back to the BIFR or insisting on separate Government approval on the facts of the case.

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