TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) whether the company's application for convening meetings of creditors and shareholders for considering a revival and compromise scheme deserved to be granted; (ii) whether the winding up petition based on the BIFR opinion should be allowed.
Issue (i): whether the company's application for convening meetings of creditors and shareholders for considering a revival and compromise scheme deserved to be granted.
Analysis: The company had remained before the sick industrial process for years without producing any acceptable, fully tied up and viable rehabilitation proposal. The record showed repeated opportunities, failure to mobilise fresh funds, prior references to sale of units, objections from secured creditors and workmen, and a consistent pattern indicating that the proposed revival exercise was only to delay liquidation. In such circumstances, the Court was not bound to direct meetings merely because a scheme was proposed under section 391 of the Companies Act, 1956.
Conclusion: The application for convening meetings was rejected, as the proposed revival scheme lacked bona fides and viability.
Issue (ii): whether the winding up petition based on the BIFR opinion should be allowed.
Analysis: The BIFR had formed and forwarded its opinion that the company could not be revived within a reasonable time, could not meet its financial obligations, and ought to be wound up in public interest under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The winding up petition had already been admitted and advertised, the provisional liquidator had been appointed, and no sustainable basis remained to prevent liquidation after the rejection of the revival application.
Conclusion: The winding up petition was allowed and the company was ordered to be wound up.
Final Conclusion: The company's revival attempt failed, the proposed meeting of creditors and shareholders was not permitted, and the company was placed in liquidation with the Official Liquidator continuing as liquidator.
Ratio Decidendi: A court may refuse to convene meetings under section 391 of the Companies Act, 1956 where the proposed revival scheme is not bona fide or viable and is advanced only to delay winding up, particularly when the BIFR has already opined that the company should be wound up under section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.
TaxTMI 
TaxTMI 
