Company court jurisdiction survives a pending BIFR reference where company restructuring laws and sick-company law are supplemental, not inconsistent.

Sections 391 and 394 of the Companies Act, 1956 were treated as operating in a different but overlapping sphere from the Sick Industrial Companies (Special Provisions) Act, 1985. A pending reference before the BIFR did not, by itself, suspend company court proceedings for compromise, arrangement or reconstruction, because section 22 was read as not barring such petitions and section 32 was held to override only where an actual inconsistency existed. As both enactments aimed at corporate viability and could be read as supplemental, the company court retained jurisdiction to sanction the scheme notwithstanding the BIFR reference. The restructuring petitions were therefore maintainable and the scheme was approved.

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Issues: Whether the company court could sanction a scheme under sections 391 and 394 of the Companies Act, 1956 despite a pending reference before the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 and the overriding clause in section 32 of that Act.

Analysis: The statutory schemes were held to operate in different but overlapping spheres. Sections 15 to 19 of the Sick Industrial Companies (Special Provisions) Act, 1985 deal with reference of a sick company to the BIFR and rehabilitation measures, while sections 391 and 394 of the Companies Act, 1956 enable compromise, arrangement, reconstruction and demerger for corporate restructuring. On a plain reading, section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not suspend proceedings under sections 391 to 394, and section 26 was confined to the appellate and injunctive scheme under that Act. The Court further held that section 32 would prevail only if there were inconsistency between the two enactments. As both statutes pursue the common object of making a company viable and efficient, and as the company court scheme can operate even where the company is not sick, the provisions were held to be supplemental rather than inconsistent.

Conclusion: The company court had jurisdiction to sanction the scheme under sections 391 and 394 of the Companies Act, 1956 notwithstanding the pending BIFR reference.

Final Conclusion: The petitions were maintainable and the restructuring scheme was approved, with costs awarded to the Regional Director.

Ratio Decidendi: The overriding clause in the Sick Industrial Companies (Special Provisions) Act, 1985 displaces the company court's jurisdiction under the Companies Act, 1956 only where an actual inconsistency exists between the two statutory regimes.

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