SICA statutory bar on winding up proceedings continues after BIFR reference registration, despite alleged debt admission or conditional payment terms.

Section 22(1) of SICA bars further winding up proceedings once a BIFR reference is registered and inquiry is deemed to have commenced, so the Company Court cannot proceed with the petition during that statutory protection. An alleged admission of debt, written consent, or a conditional promise to pay does not create an exception to the bar, especially where there is no concluded bilateral agreement, no executable undertaking, and no completed condition precedent. The pending winding up petition was therefore kept in abeyance in view of SICA protection.

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Issues: (i) Whether the bar under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 applies to pending winding up proceedings once the respondent's reference before BIFR is registered. (ii) Whether the respondent's alleged admission of debt, written consent, or conditional payment proposal prevents the statutory bar from operating.

Issue (i): Whether the bar under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 applies to pending winding up proceedings once the respondent's reference before BIFR is registered.

Analysis: The statutory language of Section 22(1) prohibits further proceedings for winding up where an inquiry under Section 16 is pending, or where a reference is registered and the inquiry is deemed to have commenced. The registered reference before BIFR, coupled with the directions issued by the Board, brought the matter within the statutory protection. The Court held that once this stage is reached, the Company Court cannot continue with the winding up petition, because the mandate of the provision is not dependent on the stage of the winding up case.

Conclusion: The bar under Section 22(1) applies and the winding up proceedings cannot continue.

Issue (ii): Whether the respondent's alleged admission of debt, written consent, or conditional payment proposal prevents the statutory bar from operating.

Analysis: The Court held that an admission of liability does not carve out an exception to Section 22(1). The material on record showed only a conditional proposal to pay linked to the successful completion of the corporate debt restructuring process and release of funds by lenders. There was no concluded bilateral agreement with the petitioner, no executable undertaking to the Court, and no completed condition precedent. The arguments based on consent, contempt, inherent powers, or a separate civil agreement were rejected as insufficient to displace the statutory prohibition. The Court also noted that the pending petition could not be treated as a recovery proceeding outside the SICA bar.

Conclusion: The alleged consent or conditional payment arrangement did not override the statutory bar.

Final Conclusion: The application was allowed, and the winding up petition was directed to remain suspended in view of the statutory protection available to the respondent company under SICA.

Ratio Decidendi: Once a BIFR reference is registered and inquiry is deemed to have commenced, Section 22(1) of SICA bars further winding up proceedings, and neither an admission of debt nor an unconsummated conditional payment proposal creates an exception to that bar.

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