(1.) An order of winding up of the company was passed on August 1, 1997. Later an application was filed under Section 466 of the Companies Act, 1956, read with Rule 9 of the Companies (Court) Rules, 1959, and Section 151 of the Code of Civil Procedure, 1908, for recall/ modification/stay of the order in view of the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. By order dated December 12, 1997, the application was disposed of. Operation of the order dated August 1, 1997, (supra) was stayed for a period of one year to enable the BIFR to form its opinion in the matter of commencement of enquiry under Section 16 of the said Act. It was observed that in the event the BIFR decides to formally initiate the enquiry, it will be open to the respondent-company to bring these facts to the notice of the court for further orders in the light of the decision in Testeels Ltd. v. Radhaben Ranchhodlal Charitable Trust [1989] 66 Comp Cas 555 ; AIR 1988 Guj 213 and Hig Temp Chemicals Pvt Ltd. v. Satya Steel Strips (P.) Ltd. [1991] 72 Comp Cas 447 (AP).
(2.) An application (flag '5') has been filed on behalf of the respondent-company stating that the BIFR has since formally commenced the enquiry and, therefore, in view of the aforesaid judgments of the Gujarat and Andhra Pradesh High Courts the proceedings should be dropped. It was submitted that if the BIFR is not able to work out any solution and revive the company, it is supposed to send its opinion under Section 20 of the Act to this court for initiating winding up proceedings and at that stage the present proceeding may revive. It was suggested that there may be difficulties in considering the case by the BIFR during pendency of this company petition.
(3.) On behalf of the petitioner-company as well as the State Bank of India, one of the secured creditors, it was submitted that the order of stay (for a period of one year) does not require any modification, Counsel for the petitioner-company submitted that the case has made substantial progress inasmuch as advertisement, etc., have been published earlier pursuant to the court's order, and if the proceedings are dropped at this stage, this may cause avoidable financial burden to the company. He also submitted that the prayer for dropping the proceedings is not bona fide. In view of the order of stay already passed by this court, the respondent-company is npt likely to suffer any loss, injury or inconvenience,