TaxTMI Login
Just a moment...
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
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) whether the filing and registration of a reference before the BIFR during the pendency of the appeal attracted the protection of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 against the winding up order; (ii) whether the company could maintain the appeal and rely upon the pending proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985; (iii) whether the winding up proceedings were liable to remain stayed in view of the special statutory scheme for revival and rehabilitation of sick industrial companies.
Issue (i): whether the filing and registration of a reference before the BIFR during the pendency of the appeal attracted the protection of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 against the winding up order.
Analysis: The protection under Section 22 was held to depend on the reference being registered after scrutiny, not merely received. The reference was registered during the pendency of the appeal, and an appeal is a continuation of the original proceedings. The appellate court was therefore entitled to take into account the subsequent registration and the changed legal position arising during the appeal.
Conclusion: Section 22 protection applied, and the winding up order could not be sustained once the reference was registered during the appeal.
Issue (ii): whether the company could maintain the appeal and rely upon the pending proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985.
Analysis: The scheme of the special Act permits the Board of Directors to take steps for rehabilitation even after a winding up order, and the appellate remedy cannot be denied merely because an Official Liquidator has been appointed. The right to challenge the winding up order remained available to the company in aid of the statutory revival process.
Conclusion: The appeal was maintainable at the instance of the company.
Issue (iii): whether the winding up proceedings were liable to remain stayed in view of the special statutory scheme for revival and rehabilitation of sick industrial companies.
Analysis: The special Act was treated as a self-contained revival statute requiring a serious effort to rehabilitate the sick company before liquidation. In the event of conflict, the special law prevailed over the general winding up law. Since the BIFR proceedings were pending, continuation of winding up proceedings would frustrate the statutory object of revival.
Conclusion: The winding up proceedings were required to remain in abeyance pending disposal of the proceedings before the authorities under the special Act.
Final Conclusion: The appellate court interfered with the winding up order and preserved the company for consideration under the statutory rehabilitation framework rather than liquidation.
Ratio Decidendi: Where a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 is registered during the pendency of an appeal against a winding up order, the appellate court must give effect to the statutory stay and allow the special revival mechanism to operate, since the special rehabilitation law prevails over the general winding up regime.
TaxTMI 
