Winding-up proceedings barred without Central Government consent after takeover; pending petitions cannot continue once statutory restriction applies.

After the Central Government takes over management under section 18E(c) of the Industries (Development and Regulation) Act, 1951, a winding-up petition cannot continue without governmental consent. The phrase "no proceeding for the winding up" was construed to cover the entire winding-up process, from filing of the petition until the winding-up order, so the statutory bar applies to pending proceedings as well as fresh ones. The object of the Act, namely rehabilitation of the industrial undertaking and avoidance of winding up unless necessary, supported that reading. A pending petition pursued without consent was therefore not maintainable, and the argument that a vested right protected continuation was rejected.

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Issues: Whether, after the Central Government had taken over the management of the company under section 18E(c) of the Industries (Development and Regulation) Act, 1951, a pending winding-up petition could continue without the consent of the Central Government, or whether the absence of such consent rendered the petition not maintainable.

Analysis: The words "no proceeding for the winding up" were construed as covering the whole process of winding up, beginning with the filing of the petition and continuing until the winding-up order. The provision was read as barring not merely the institution of a petition after takeover, but also the continuance of a pending proceeding once the statutory restriction attached. The interpretation was reinforced by the object of the Act, which was to enable rehabilitation of the industrial undertaking and to prevent winding up unless necessary. The reasoning adopted in the construction of similar language in the Civil Procedure Code, where consent was held necessary for continuance of proceedings as well as their institution, was applied by analogy. The argument based on a vested right to pursue the petition was rejected because the provision was treated as retrospective in its operation on pending proceedings.

Conclusion: Consent of the Central Government was necessary for the continuance of the winding-up proceeding after takeover, and the petition, having been pursued without such consent, was not maintainable.

Ratio Decidendi: Where a statute prohibits "any proceeding" for winding up without governmental consent, the restriction applies to pending proceedings as well as newly instituted ones, and continuation without consent is barred.

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