JUDGMENT

Satish Chandra, J. - In May 1967 Kilachand Devi Chand and Company Private Limited, the appellant, before us, filed a petition for the winding up of the New Victoria Mills Company Limited, Kanpur on the ground that the respondent company was indebted to the petitioning creditor to the tune of Rs. 2,15,948.24 and had failed to pay the same. During the pendency of the winding up petition the Central Government issued a notified order under Section 18-A of the Industries (Development and Regulation) Act, 1951 on 1st September, 1969. When the winding up petition came up for hearing before the learned Company Judge on 6th January, 1970 he held that in view of the issuance of the notified order by the Central Government and having regard to the provisions of Section 18-E(1) (c) of the Act, the winding up petition could not continue. He accordingly dismissed the petition. Aggrieved, She petitioning creditor has come up in appeal.

2. Chapter III-A was added to the Industries (Development and Regulation) Act, 1951 by Amending Act No. 26 of 1963. It consists of Secs. 18-A to 18-F. This Chapter is headed as `Direct management or control of industrial undertakings by Central Government in certain cases'. Section 18-A confers power upon the Central Government to assume management or control of an industrial undertaking where it finds that the undertaking has failed to comply with the directions issued under Section 16 of the Act or is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest. On the issuance of notified order under Section 18-A all persons in charge of the management are deemed to have vacated their office by virtue of Section 18-B (a) of the Act. The persons authorised by the Central Government under its notified order to take over the management of the concern are by virtue of clause (c) of Section 18-B deemed to have been duly appointed as the managing agents in pursuance of the Indian Companies Act, 1956. Under clause (d) such managing agents are entitled to take over the management and all such steps as may be necessary to take into their custody or control all property, effects and actionable claims to which the industrial undertaking is entitled. Clause (e) of Section 18-B provides that such persons alone shall he entitled to exercise all the powers. of the directors of the undertaking. Section 18-C provides that he can take proceedings for cancellation or variance of any contract entered in bad faith. Section 18-E of the Act provides :-

''18-E-Application of Act 7 of 1913-(1) Where the management of an industrial undertaking,' being a company as defined in the Indian Companies Act, 1956, is taken over by the Central Government, then, not with-standing anything contained in the said Act or in the memorandum or articles of association of such undertaking,-

(a) it shall not be lawful for the shareholders of such undertaking or any other person to nominate or appoint any person to be a director of the undertaking :

(b) no resolution passed at any meeting of the share-holders of such undertaking shall be given effect to unless approved by the Central Government :

(c) no proceeding for the winding up such undertaking or for the appointment of a receiver in regard thereof shall lie in any Court except with the consent of the Central Government.

(2) .................."

It will be seen that Chapter III-A confers power upon the Central Government to take over the management of certain industrial undertakings by appointing an authorised controller there-of. Such controller alone shall be entitled to take the custody of the effects of the company. He alone is entitled to exercise managerial functions in relation to such an undertaking. After the issuance of the notified order the share-holders of the undertaking cannot lawfully transact any business of the undertaking nor can they pass any resolution with regard to the effects of the undertaking. In this context the provisions of