Section 20 winding up turns on expert rehabilitation findings, and persistent non-compliance justified liquidation here.

Under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985, the High Court was not required to act mechanically on a winding-up recommendation and had to give substantial weight to the BIFR and AAIFR's expert view. Because no viable rehabilitation scheme had been implemented, the sanctioned scheme failed for non-compliance with financial and other conditions, and the promoters had not restored creditor confidence or shown a realistic prospect of revival, the recommendation for winding up was accepted. The company's unconditional withdrawal of its writ petition, without liberty to revive the challenge, also left its objections to the BIFR and AAIFR orders without substance, and liquidation was directed to follow.

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Issues: Whether the High Court should accept the BIFR's recommendation under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 and order winding up of the company; and whether the challenge to the BIFR and AAIFR orders could survive after withdrawal of the writ petition.

Analysis: The company had remained under the sick industrial company regime for many years, yet no viable rehabilitation proposal was implemented and the sanctioned scheme itself failed for want of the promoters' contribution and compliance with monetary and non-monetary conditions. The BIFR and AAIFR recorded that the promoters had not brought in the required funds, had not restored creditor confidence, and had not shown any realistic possibility of revival. The Court held that although section 20(2) uses mandatory language, the High Court is not bound to act mechanically and must give due weight to the expert opinion of the Board and the appellate authority. The Court also held that the company's unconditional withdrawal of the writ petition, without liberty to re-agitate the matter, left the challenge to the BIFR and AAIFR orders without substance.

Conclusion: The recommendation for winding up was upheld and accepted, and the objection of the respondent company was rejected.

Final Conclusion: The decision finally terminated the winding-up controversy in favour of the petitioning creditors, with the company directed to be wound up and liquidation proceedings to follow.

Ratio Decidendi: In proceedings under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985, the High Court must accord substantial weight to the BIFR's expert opinion and may order winding up where no viable rehabilitation scheme exists and the record shows persistent non-implementation of revival obligations.

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