LexM/S. MADURA COATS LIMITED versus M/S. MODI RUBBER LTD. & ANR.
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[2016] 4 S.C.R. 615 MIS. MADURA COATS LIMITED v. MIS. MODI RUBBER LTD. & ANR. (Civil Appeal No.1475 of2006) JUNE 29, 2016 [JAGDISH SINGH KHEHAR, MADAN B. LOKUR AND C. NAGAPPAN, JJ.] Sick Industrial Co111panies (Special Provisions) Act, J985 - ss. J 5, 16 and 22 - Reference u/s. 15 - Jn respect of the company in the process of winding up under Companies Act - Effect of - Held: Provisions of 1985 Act would prevail over Companies Act - Once reference is registered and an enquiry initiated uls. 16, the provisions of s. 22 would co111e into play - Company Court cannot proceed further pending a final decision in the reference under J985 Act - Jn the facts and circumstances of the case, appeal dismissed - Companies Act, 1956. Dismissing the appeal, the Court A B c D HELD: 1. Different situations can arise in the process of winding up a company under the Companies Act but whatever be the situation, whenever a reference is made to the BIFR under · E Sections 15 and 16 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the provisions of the SICA would come into play and they would prevail over the provisions of the Companies Act and proceedings under the Companies Act must give way to proceedings under the SICA. [Para 27) [625-G-H] F 2. In the present case, there is no error in the view taken by the High Court in concluding that the winding up proceedings before the Company Court cannot continue after a reference has been registered by the BIFR and an enquiry initiated under Section 16 of the SICA. The provisions of Section 22 of the SICA G would come into play and that the Company Court could not proceed further in the matter pending a final decision in the reference under the SICA. [Para 28) [626-A-C] 3. In view of the subsequent developments and the fact that the appellant had participated before the BIFR and has taken H 615 616 SUPREME COURT REPORTS [2016] 4 S.C.R. A its dues in terms of the rehabilitation scheme approved and sanctione~ by the BIFR, nothing really survives for consideration in this appeal. (Para 29) (626-C-D] Real Value Appliances Ltd. v. Canara Bank 1998 (3) SCR 170 : (1998) 5 SCC 554; Rishabh Agro Industries B Ltd. v. P.NB. Capital Service Ltd. 2000 (1) Suppl. SCR 38 : (2000) 5 SCC 515; Tata Motors Ltd v. Pharmaceutical Products of India Ltd 2008 (9) SCR 267 : (2008) 7 sec 619 - relied on. NGEF Ltd. v. Chandra Developers (P) Ltd. 2005 (3) C Suppl. SCR 747 : (2005) 8 SCC 219 - referred to. D Case Law Reference 1998 (3) SCR 170 relied on Para7 2000 (1) Suppl. SCR 38 relied on Para8 2008 (9) SCR 267 relied on Para22 2005 (3) Suppl. SCR 747 referred to Para23 CIVIL APPELLATE JURISDICTION. : Civil Appeal No. 1475 of2006. E From the Judgment and Order dated 20.05.2004 in Special Appeal F G H No. 420 of2004 passed by the High Court of Judicature at Allahabad. Shekhar Naphade, Sr. Adv., Ms. Shubhangi Tuli, Ms. Astha Deep, Shivaj i M. Jadhav, Advs. for the Appellant. Dr. A. M. Singhvi, K. V. Vishwanathan, Sr. Advs., Atishi Dipankar, Amit Bhandari, P. N. Gupta, Mrs. Bharti Gupta, Ad vs. for the Respondents. The Judgment of the Court was delivered by MADAN B. LOKUR, J. I. The appellant (Madura Coats) is aggrieved by the judgment and order dated 20th May, 2004 passed by the Division Bench of the Allahabad High Court in Special Appeal No. 420 of2004. By the impugned judgment and order the Division Bench of the High Court allowed the Special Appeal of the respondent and stayed further proceedings before the Company Court consequent upon a winding up order passed against the respondent (Modi Rubber) till a final decision is taken on a reference made by Modi Rubber to the Board M/S. MADURA COATS LTD. v. M/S. MODI RUBBER LTD. & 617 ANR. [MADAN B. LOKUR, J.] for Industrial and Financial Reconstruction. A 2. Company Petition No. I of2002 was filed by Madura Coats in the Allahabad High Court for winding up Modi Rubber on the allegation that Modi Rubber was unable to pay its huge undisputed debts. Notice was issued in the Company Petition to Modi Rubber who entered appearance but took several adjournments in the matter on one pretext B or the other including furnishing the schedule for repayment of the admitted dues to the creditors, an arrangement being worked out with Apollo Tyres Ltd. and various other reasons. 3. Eventually, after two years of adjournments, the Company Court declined to grant
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