BIFR winding-up opinion is not conclusive; the High Court must independently assess and follow prescribed winding-up procedure.

An opinion forwarded by the Board for Industrial and Financial Reconstruction under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 is relevant and weighty, but it does not bind the Company Judge mechanically. The High Court must independently examine whether winding up is justified and then follow the ordinary winding-up procedure under the Companies (Court) Rules, 1959, including admission, notice, advertisement and further hearing as required. Winding up cannot be ordered straightaway merely on receipt of the Board's opinion, and the parties must have an opportunity to be heard at the relevant stage.

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Issues: (i) Whether the Company Judge, while acting under section 20(2) of the Sick Industrial Companies (Special Provisions) Act, 1985, is bound by the Board for Industrial and Financial Reconstruction's opinion recommending winding up. (ii) What procedure the Company Judge must follow after receipt of the Board's opinion under section 20(2) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Issue (i): Whether the Company Judge, while acting under section 20(2) of the Sick Industrial Companies (Special Provisions) Act, 1985, is bound by the Board for Industrial and Financial Reconstruction's opinion recommending winding up.

Analysis: Section 20(1) enables the Board to form an opinion after inquiry and hearing concerned parties, while section 20(2) requires the High Court to act on the basis of that opinion. The expression used in section 20(2) does not make the Board's opinion conclusive in the sense of excluding judicial scrutiny. The opinion of an expert body carries substantial weight, but the High Court cannot abdicate its own function of deciding whether winding up should follow. The High Court must consider the opinion, assess its correctness, and form its own judicial view.

Conclusion: The Company Judge is not bound to mechanically accept the Board's recommendation and must independently consider whether winding up should be ordered.

Issue (ii): What procedure the Company Judge must follow after receipt of the Board's opinion under section 20(2) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The Companies (Court) Rules, 1959 contemplate admission, notice, advertisement, and further hearing before final winding up. On receipt of the Board's opinion, the Company Judge may, depending on the circumstances, issue notice to the company or proceed to consider advertisement of the petition, and may even appoint a provisional liquidator if warranted. However, the Judge cannot straightaway order winding up solely on receipt of the Board's opinion. The petition must thereafter proceed in accordance with the ordinary winding-up procedure, and the parties must have an opportunity to be heard at the relevant stage.

Conclusion: The Company Judge must apply the winding-up procedure under the Companies (Court) Rules, 1959 from the stage of admission and advertisement onward, and cannot order winding up straightaway on the Board's opinion alone.

Final Conclusion: The winding-up order passed only on the basis of the Board's opinion was unsustainable, and the matter required reconsideration by the Company Judge in accordance with law.

Ratio Decidendi: An opinion forwarded under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 is relevant and weighty, but not binding; the High Court must independently determine whether winding up is justified and then follow the prescribed winding-up procedure under the Companies (Court) Rules, 1959.

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