The intention of the legislature to stay all further proceedings after a winding up order is passed, as highlighted in section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

E. PADMANABHAN, J.

This application has been taken out by M/s. Tan India Ltd., seeking to set aside the order of winding up passed by this court on June 25, 2001, in C.P. No. 243 of 1997. This application is being resisted by the petitioner in the company petition on very many grounds.

Before taking up this application, it is essential to refer to the earlier order. In C.P. No. 243 of 1997, N. V. Balasubramanian J., on June 25, 2001, passed an order winding up M/s. Tan India Ltd. The said winding up order has been passed as the learned judge arrived at the conclusion that the company is unable to pay its debts and the company is commercially insolvent. The learned judge held thus :

2. In so far as C.P. No. 243 of 1997 is concerned, the case of the petitioner is that it carries on business in extending hire purchase and leasing facility on vehicles and machinery and equipment. According to the petitioner, the respondent entered into a hire purchase agreement with it. The respondent undertook to pay amount due in instalments. The respondent-company committed default in payment of instalments due from November 30, 1995, in respect of several other hire purchase agreements. In spite of demands made by the petitioner, the respondent has not made any payment. According to the petitioner, the respondent is due and liable to the petitioner, as on February 15, 1997, for a sum of Rs. 1, 02, 52, 136.96 in respect of several hire-purchase agreements. It is stated that notice has been issued on January 18, 1997, demanding the respondent-company to pay the said sum of Rs. 1, 02, 52, 136.96. But the respondent-company even after the receipt of statutory notice has failed to make the payment.

3. The respondent-company was served and has been taking time. They have not filed counter-affidavit. They have not seriously disputed their liability. The attitude of the respondent-company in other company petitions is also similar. The respondent-company has been taking time in one pretext or other and the matter was getting adjourned at the request of the respondent-company.

4. On June 11, 2001, the managing director of the respondent-company filed an affidavit stating that the respondent-company as on September 30, 2000, has become a sick industrial company within the meaning of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, Balance-sheets for five years were also filed. Annual general body meeting of the company was held on March 31, 2001. It is stated that a reference has been made under section 15 of the said Act to the Board for Industrial and Financial Reconstruction (BIFR), New Delhi, on May 30, 2001. The managing director of the respondent-company has prayed that in view of the pendency of the matter before the BIFR, the matter should be stayed and the company petitions should be adjourned.

5. Along with the affidavits, the respondent-company has also enclosed references made to the Secretary, BIFR, New Delhi, enclosing the board resolution copies, company's registration certificate, factory licence for four divisions, etc., and a receipt issued by Blue Dart Express Limited on May 30, 2001.

6. Learned counsel for the respondent relied upon a decision reported in Rishab Agro Industries Ltd. v. P.N.B. Capital Services Ltd. and submits that in view of sections 15 and 16 of the Sick Industrial Companies (Special Provisions) Act, 1985, an enquiry shall be deemed to have been commenced for the purposes of section 22 of the Act, from the date of submission of the reference under section 15 of the Act. He further submits that since reference has been sent to the BIFR under section 22 of the said Act, further proceedings should be stayed. Learned counsel for the petitioner referred to a decision of the Supreme Court in Real Value Appliances Ltd. v. Canara Bank, and submitted that mere registration of a reference by the BIFR under the Act, would not result in the automatic cessation of all proceedings, which are pending