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Issues: Whether the Company Court could permit and confirm sale of the assets of a sick industrial company before passing a winding up order on the basis of the Board's recommendation under SICA.
Analysis: Under Section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985, the Board's opinion may be forwarded to the High Court for winding up, but the scheme of the statute keeps control over the assets with the Board until a winding up order is actually passed. Section 20(4) contains a non obstante clause and authorises the Board to cause sale of the assets of the sick industrial company and forward the proceeds for distribution in accordance with law. The Court held that the Companies Act provisions invoked by the respondents could not override this special statutory regime, and that the power to initiate or validate sale of the assets before winding up is not available to the Company Court merely because a winding up petition is pending.
Conclusion: The impugned orders permitting and confirming the auction sale before a winding up order were unsustainable and were set aside.
Final Conclusion: The appeals succeeded, and the sale-related orders passed by the Company Court were invalidated because sale of the sick company's assets could not be authorised prior to a winding up order under SICA.
Ratio Decidendi: Until a winding up order is passed on the Board's recommendation under SICA, the Board retains control over the assets of the sick industrial company and the Company Court cannot authorise or confirm their sale; the special statutory scheme of SICA overrides the Companies Act.
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