MISHRILAL JAIN P LTD Vs. NACRO CHEMICALS LTD

JUDGEMENT

(1.) ORDER of winding -up of the Company, M/s Nacro Chemicals Limited was passed on 1.8.97. An application (flag 3') has been filed under Section 466 of the Companies Act read with Rule 9 of the Companies (Court) Rules, 1959 and Section 151 of the Code of Civil Procedure for recall/modification/stay of the order.

(2.) IN support of the application it has been contended on behalf of the petitioner that as an enquiry has been initiated within the meaning of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short 'the Sick Companies Act'), by the Board for Industrial and Financial Reconstruction (BIFR), in terms of the provision of Section 22 of that Act, the winding -up proceeding cannot continue. On behalf of the petitioner -company it has been submitted that no reference within the meaning of Section 15 of the Sick Companies Act has been made till date and, therefore, the provisions of Section 22 of that Act are not applicable and the application is premature. Stand has also been taken that the order of winding -up dated 1.8.97 being an appeal -able order, if the respondent -company had any grievance against it, it should have preferred appeal. In reply, it has been submitted that the provision of Section 466 of the Companies Act and Rule 9 of the Companies (Court) Rules confer enough power on this Court to pass any proper order, such as recall, modification or stay. In any view, it has been submitted that as the order of winding up deprive the company of any opportunity to negotiate, as it creates cloud over its reputation and viability, it would be in the ends of justice to stay the further proceeding to enable the company to work out the solution and improve its financial position.

(3.) THE State Bank of India also has opposed the application. According to it, the company owes to the bank a sum of Rs. 2.62 crores and it would like to have its remedy worked out in the present proceeding itself.