Winding up of sick industrial companies may proceed despite pending relief applications when no viable revival plan exists.

A High Court may accept a winding up recommendation for a sick industrial company where repeated revival opportunities have failed and no viable rehabilitation proposal has been placed before the statutory forum. Pending proceedings under a separate governmental relief scheme do not, by themselves, justify postponing liquidation when the company remains closed, creditors have not accepted settlement terms, and there is no realistic ability to meet secured and statutory dues. On those facts, the earlier view that the company was not viable and that winding up was just, equitable and in public interest was accepted, and the company was ordered to be wound up.

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Issues: Whether the recommendation for winding up of the sick industrial company under the special statute should be accepted despite the pendency of a governmental rehabilitation scheme and claimed prospects of revival.

Analysis: The company had remained before the statutory forum for many years without submitting any fully tied-up revival proposal, and repeated opportunities to revive the unit had failed. The record showed that the operating agency did not receive any viable rehabilitation proposal, the creditors had not accepted the proposed settlement, and the company had remained closed for years without business activity. The Court further held that a pending application under a later governmental relief scheme did not require postponement of a winding up order when no realistic ability to meet the secured and statutory dues was shown. In these circumstances, the earlier statutory opinion that the company was not viable and that winding up was just, equitable and in public interest was accepted.

Conclusion: The recommendation for winding up was upheld and the company was ordered to be wound up.

Final Conclusion: The special statutory process for sick industrial companies was held to have culminated in a valid winding up recommendation, and the High Court proceeded to order liquidation rather than defer the matter for speculative revival efforts.

Ratio Decidendi: A High Court may accept a winding up recommendation for a sick industrial company when repeated opportunities for revival have failed and no viable rehabilitation proposal is shown, and the mere pendency of a separate governmental relief application does not, by itself, warrant deferring winding up.

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