Statutory bar under sick company law prevents winding up proceedings while a BIFR reference is pending.

Once a reference is registered under the sick company regime and inquiry has commenced, section 22 bars proceedings against the company until the Board takes a final decision. Applying that protection, the Court stated that a winding up petition based on alleged inability to pay an admitted liability could not proceed while the BIFR reference remained pending. The fact that the claim arose from contract and the authorities cited by the petitioner did not displace the statutory bar on these facts. The petition was therefore kept in abeyance, with liberty to seek revival after disposal of the reference.

---

---

Issues: Whether the winding up petition could proceed in view of the pendency of a reference before the Board for Industrial and Financial Reconstruction and the statutory bar under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The petition was founded on alleged inability to pay an admitted liability under sections 433(e), 434 and 439 of the Companies Act, 1956. The respondent invoked the statutory protection available once a reference is registered before the Board for Industrial and Financial Reconstruction. The Court applied the principle that, after registration of a reference and commencement of inquiry under the sick company regime, proceedings against the company are barred by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 until the Board takes a final decision. The Court also held that the authorities relied upon by the petitioner did not displace that bar on the facts of the case, particularly where the claim arose from contract and the statute itself does not distinguish between amounts that are or are not part of the rehabilitation scheme.

Conclusion: The winding up petition could not proceed during the pendency of the BIFR reference, and the matter was adjourned sine die with liberty to seek revival after the reference is decided.

Ratio Decidendi: Once a reference under the sick company legislation is registered and inquiry has commenced, section 22 imposes a bar on proceedings against the company until final determination by the Board.

---