SICA overrides section 391 schemes when revival is before BIFR, and prior approvals may be remitted for fresh consideration.

SICA was treated as a special, self-contained code governing inquiry, revival, amalgamation and asset disposition for sick industrial companies, and its overriding scheme controlled the field when proceedings were pending before BIFR or AAIFR. In that setting, the Company Court could not entertain or approve a merger or revival scheme under section 391 of the Companies Act, 1956 if it would trench upon matters reserved to the statutory fora; the Company Court's approval was therefore unsustainable. The approvals granted by BIFR and AAIFR were also set aside because the proposal had not received independent, reasoned consideration in accordance with SICA, and the matter was remitted to BIFR for fresh consideration.

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Issues: (i) Whether, in view of the Sick Industrial Companies (Special Provisions) Act, 1984, the Company Court could entertain and approve a scheme under section 391 of the Companies Act, 1956 when revival proceedings were pending before BIFR/AAIFR; (ii) whether the approval granted by the BIFR and AAIFR to the merger-cum-revival proposal could stand, or the matter had to be remitted for fresh consideration.

Issue (i): Whether, in view of the Sick Industrial Companies (Special Provisions) Act, 1984, the Company Court could entertain and approve a scheme under section 391 of the Companies Act, 1956 when revival proceedings were pending before BIFR/AAIFR.

Analysis: SICA is a special, self-contained enactment meant to secure timely detection and rehabilitation of sick industrial companies. It contains overriding provisions and regulates the field of inquiry, revival, amalgamation, and disposal of assets through BIFR and AAIFR. Where a company is before the SICA fora, the jurisdiction of the Company Court is subject to SICA and cannot be exercised in a manner inconsistent with that statute. The provisions of sections 391 to 394 of the Companies Act, 1956 cannot be harmonized with SICA where the scheme trenches upon matters reserved to BIFR, including revival, restructuring, amalgamation, and disposition of assets.

Conclusion: The Company Court ought not to have entertained and approved the scheme in the manner it did, and the challenge succeeded in favour of the appellant.

Issue (ii): Whether the approval granted by the BIFR and AAIFR to the merger-cum-revival proposal could stand, or the matter had to be remitted for fresh consideration.

Analysis: The proposed scheme was not shown to have been prepared after proper application of mind in accordance with SICA. The orders of the BIFR and AAIFR were found to have been influenced by the High Court proceedings and did not reflect an independent, reasoned consideration of all relevant facts and statutory requirements. Since the scheme had not been examined in the manner required by SICA, the approvals could not be sustained.

Conclusion: The approvals of the BIFR and AAIFR were set aside and the matter was remitted to the BIFR for fresh consideration under SICA.

Final Conclusion: The statutory scheme governing sick industrial companies was held to control the field, the Company Court's approval could not stand, and the revival issue was sent back for reconsideration by the specialised forum under the Act.

Ratio Decidendi: Where SICA applies, its overriding scheme governs revival and amalgamation of a sick industrial company, and proceedings under section 391 of the Companies Act, 1956 cannot be used to bypass the statutory jurisdiction and decision-making process of BIFR/AAIFR.

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