Strict construction of winding-up consent bar means Government takeover of only part of an undertaking does not require Central Government consent.

A consent restriction on winding-up proceedings under section 18E(1)(c) of the Industries (Development and Regulation) Act, 1951 must be strictly construed. Where Government control under section 18AA(1) extends only to part of an industrial undertaking, and not to the undertaking as a whole, the Central Government's consent is not required to commence or continue winding-up proceedings under section 433 of the Companies Act, 1956. The statutory scheme distinguishes between a company and its industrial undertaking, and the bar applies only when the whole undertaking has been taken over. On that reading, the winding-up petition may proceed without Central Government consent.

---

---

Issues: Whether, when only a part of an industrial undertaking owned by a company has been taken over under section 18AA(1) of the Industries (Development and Regulation) Act, 1951, the consent of the Central Government under section 18E(1)(c) is required for winding-up proceedings under section 433 of the Companies Act, 1956 to be commenced or continued.

Analysis: The provision requiring Central Government consent is a restriction on the creditor's or shareholder's right to seek winding up and therefore calls for strict construction. The statutory scheme repeatedly distinguishes between a company owning an industrial undertaking and the industrial undertaking or a part of it. Where the legislature intended to refer to the whole or part of an undertaking, it used express language to that effect. The notification in question also showed that only one factory, and not the entire industrial undertaking, had been taken over. Reading the Act as a whole, the consent requirement in section 18E(1)(c) was held to apply only where the industrial undertaking as a whole is taken over, not where merely one part or factory is brought under Government management.

Conclusion: Section 18E(1)(c) is not attracted on the facts, and the winding-up proceedings may continue without the Central Government's consent.

Final Conclusion: The statutory bar against winding-up proceedings does not extend to a case where Government control is confined to only a part of the industrial undertaking, so the petition can proceed on merits before the company court.

Ratio Decidendi: A consent restriction on winding up must be strictly construed and does not apply unless the whole industrial undertaking, and not merely a part of it, has been taken over by the Central Government.

---