# M/s Polar Industries Ltd v. The Assistant Commissioner (S.I.B.) and another

- **Citation:** (2002) 2 ILRA 405
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2002-04-10
- **Case number:** Civil Misc. Writ Petition No. 1116 of 2002
- **Bench:** S.K. Sen, C.J. V.M. Sahai
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-polar-industries-ltd-v-the-assistant-commissioner-s-i-b-and-another-39902
- **Pages:** 3

## Headnote

Sri S.P. Kesarwani
S.C.

Sick
Industrial
Companies
(Special
Provisions) Act, 1985- section 22-all
stages of inquiry and other proceedings
before the Board of Industrial and
Financial Reconstruction are over where
winding up proceeding is pending in
Delhi High Court-Section 22 will have no
application in this case.

Held (Para 4)

The fact remains that proceedings for
winding
up
of
the
sick
industrial
company under Section 20 is pending in
Delhi High Court. That itself shows that
all proceedings by way of inquiry or
otherwise
already
concluded
in
the
Board
of
Industrial
and
Financial
Reconstruction. Section 22 of 'The Act'
cannot have any application in present
case.
Case Law Referred-

## Text

2 All] M/s Polar Industries Ltd. Vs. The Assistant Commissioner (S.I.B.) and another
405
subsequent period is concerned the
department shall be at liberty to proceed
in accordance with law and it will be open
to the writ petitioner to take all steps as he
may be advised.

6. With the aforesaid direction, the
writ petition is allowed to the extent
indicated above.

7. The interim application also
stands disposed of accordingly.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.4.2002

BEFORE
THE HON'BLE S.K. SEN, C.J.
THE HON'BLE V.M. SAHAI, J.

Civil Misc. Writ Petition No. 1116 of 2002

M/s Classic Rugs Private Ltd.

 ...Petitioner
Versus
Assistant
Commissioner
(Assessment)
Trade Tax, Mathura and another

 ...Respondents

Counsel for the Petitioner:
Sri Manish Goyal

Counsel for the Respondents:
Sri S.P. Kesarwani
S.C.

Sick
Industrial
Companies
(Special
Provisions) Act, 1985- section 22-all
stages of inquiry and other proceedings
before the Board of Industrial and
Financial Reconstruction are over where
winding up proceeding is pending in
Delhi High Court-Section 22 will have no
application in this case.

Held (Para 4)

The fact remains that proceedings for
winding
up
of
the
sick
industrial
company under Section 20 is pending in
Delhi High Court. That itself shows that
all proceedings by way of inquiry or
otherwise
already
concluded
in
the
Board
of
Industrial
and
Financial
Reconstruction. Section 22 of 'The Act'
cannot have any application in present
case.
Case Law Referred-
1. 1991 SC 169
2. 1997 Company cases Vol. 89 P. 600

(Delivered by Hon'ble S.K. Sen, C.J.)

1. Sri Manish Goyal learned
Advocate appears for petitioner and Sri
S.P. Kesarwani learned Standing Counsel
appears for State Respondents.

2. The petitioner company having its
registered office at New Delhi and in
respect of which winding up proceeding is
pending in Delhi High Court, has moved
this writ petition challenging the notice
dated 28.2.2002 directing the petitioner
company to deposit the amount of
Rs.21,34,593.00 as Trade Tax due against
the writ petitioner since 1994-95 to 199697.

3. The contention of Sri Manish
Goyal learned counsel for petitioner is
that there is automatic suspension of the
proceedings under Section 22 of the Sick
Industrial Companies (Special provisions)
Act 1985 (hereinafter referred to as 'The
Act') and as such complying with the said
Section 22, the notice being in the nature
of a distress proceeding, the notice should
be stayed. It is however on record that all
stages of inquiry and other proceedings
before the Board of Industrial and
Financial Reconstruction are over and the
learned counsel for petitioner also can not
dispute that the matter has been sent to the
INDIAN LAW REPORTS ALLAHABAD SERIES [2002
406
High Court under the relevant provisions
of the Said Act and the winding up
proceeding is pending under Section of
the said Act. Section 20 of the said Act
provides as follows:

"Winding up of sick industrial
company- (1) Where the Board, after
making inquiry under section 16 and after
consideration of all the relevant facts and
circumstances
and
after
giving
an
opportunity
of
being
heard
to
all
Concerned parties, is of opinion that the
sick industrial company is not likely to
make
its
net
worth
exceed
the
accumulated losses within a reasonable
time while meeting all its financial
obligations and that the company as a
result thereof is not likely to become
viable in future and that it is just and
equitable that the company should be
wound up, it may record and forward its
opinion to the concerned High Court.)

(2) The High Court shall, on the
basis of the opinion of the Board, order
winding up of the sick industrial company
and may proceed and cause to proceed
with the winding up of the sick industrial
company
in
accordance
with
the
provisions of the Companies Act 1956 (1
of 1956).

(3) For the purpose of winding of
the sick industrial company, the High
Court may appoint any officer of the
operating agency, if the operating agency
gives its consent, as the liquidator of the
sick industrial company and the officer so
appointed shall for the purposes of the
winding up of the sick industrial company
be deemed to be, and have all the powers
of, the official liquidator under the
Companies Act, 1956 (1 of 1956).

(4)

Notwithstanding
anything
contained in sub-section (2) or subsection (3), the Board may cause to be
sold the assets of the sick industrial
company in such manner as it may deem
fit and forward the sale proceeds to the
High Court for orders for distribution in
accordance with the provisions of section
529 A, and other provisions of the
Companies Act, 1956 (1 of 1956).

4. The fact remains that proceedings
for winding up of the sick industrial
company under Section 20 is pending in
Delhi High Court. That itself shows that
all proceedings by way of inquiry or
otherwise were already concluded in the
Board
of
Industrial
and
Financial
Reconstruction. The first and foremost
contention of Mr. Goyal is that there is
automatic suspension under section 22 of
the 'The Act' cannot have any application
in present case and the reliance placed by
him on the Judgment and decision in the
case of Gram Panchayat and another Vs.
Shree Vallabh Glass Works Ltd. and
others (1991 S.C. 169) is misconceived.
The Supreme Court in the aforesaid
decision held that as soon as inquiry
under section 16 of the Act is ordered by
the Board various proceedings set out
under Section (1) of Section 22 would be
deemed to have been suspended and no
proceeding against any of the property of
the company could be proceeded further
except with the consent of the Board.

5. In the instant case admittedly, no
proceeding is pending with the Board, and
all inquiry and other proceedings are over
and, as such, the said decision has no
application to the facts and circumstances
of the present case. Mr. Goyal has also
referred to sub section (2) of Section 20 of
'The Act' and submitted that the High
2 All] M/s Classic Rugs Pvt. Ltd. Vs. Asstt. Commissioner (Assessment), T.T. and another
407
Court has power on the basis of opinion
of the Board to consider the case of
revival. In our view, the High Court
referred to in Sub-section (2) of Section
20 of 'The Act' is Delhi High Court,
where winding up proceeding is pending.
Section 20 of 'The Act' relates to winding
up after the matter is referred to the High
Court for passing an order of winding up.
It is open to the High Court in the said
proceedings to consider all aspects of the
matter and to find out if company could
be revived. The said provision in our view
can
not
apply
to
the
facts
and
circumstances of present writ petition. It
will be open for the company to approach
appropriate Court where winding up
proceeding is pending, if the High Court
deems fit and proper to revive the
company. The contention of Mr. Goyal on
this aspect of the matter, therefore, can
not be accepted. Mr. Goyal has also relied
upon decision of Madras High Court in
the case of J.M. Malhotra Vs. Union of
India (1997 Company Cases, Vol. 89,
600). The principle relied upon in the said
decision can not be disputed, although in
our view the same does not apply to the
facts and circumstances of the instant
case. In the aforesaid decision the matter
came up for consideration before the
Madras High Court under section 20 for
winding up. As we have already noted, it
is open to the winding-up Court to
consider all aspect of the matter including
the viability of the revival of the company
at the stage of winding-up. The said
principle enunciated in the aforesaid
decision, in our view, does not come to
the aid of the writ petitioner.

6. Considering all aspects of the
matter we are of the view that the writ
petition is devoid of any merit and is
liable to be dismissed. The same is
accordingly dismissed without any order
as to costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.5.2002

BEFORE
THE HON'BLE ANJANI KUMAR, J.

Civil Misc. Writ Petition No. 5315 of 1989

Sri Bhola Nath Verma

...Petitioner
Versus
Vth Additional District Judge, Kanpur
Nagar and others
 ...Respondents

Counsel for the Petitioner:
Sri Shashi Kant Gupta

Counsel for the Respondents:
S.C.

U.P. Act No. 13 of 1972- section 21
(1)(a)-
the
question
of
bonafide
requirement of the premises as well as
that of comparative need are questions
of fact and, therefore, High Court has no
power to correct the question of fact
even if erroneously decided. (Held in
para 9).

This
writ
petition
deserves
to
be
dismissed as no ground for interference
is made out and is hereby dismissed. The
interim order, if any, stands vacated.
Case Law Preferred
(1) JT 2002 (1) SC 254
(2) JT 2002 (1) SC 225
(3) 2001(1) ARC 176
(4) AIR 1983 SC 535
(5) AIR 1975 SC 1296
(6) AIR 1974 SC 1696
(7) 1976 U.P.R.C.C. 376
(8) 1976 UPRCC 342
(9) 1977 UPRCC 230
(10) 1996 (2) ARC 409
(11) 1997 (1) ARC 627
(12) AIR 2001 SC 807
(13) 1998 (2) ARC 148