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Issues: Whether a separate company petition for winding up on the ground of inability to pay debts should be entertained when the respondent-company had already been declared a sick industrial company and a reference for winding up was pending before the Court.
Analysis: The respondent-company had already been declared sick by the Board for Industrial and Financial Reconstruction and, under section 20(2) of the Sick Industrial Companies (Special Provisions) Act, 1985, the matter had been referred to the High Court for passing a final winding up order. In that situation, the Court found no purpose in entertaining or keeping alive a parallel petition under sections 433(e) and 434 of the Companies Act, 1956. The petitioner's claim was to be worked out in the winding up proceedings, where creditors would be required to lodge their claims before the Official Liquidator with proof, and the existing interim orders in the present petition would continue to have effect in the connected winding up matter.
Conclusion: The separate winding up petition was not entertained and was disposed of, leaving the petitioner to pursue its claim in the pending winding up proceedings.
Ratio Decidendi: Where a company is already under winding up consideration pursuant to a BIFR reference, a parallel winding up petition on the same debt claim need not be entertained, and the creditor must establish its claim in the winding up proceedings before the Official Liquidator.
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