Provisions of Sick Industrial Companies (Special Provisions) Act would prevail over the provisions of Companies Act: SC [Read Judgment]
The Supreme Court of India in M/s Madura Coats Limited v M/s Modi Rubber Limited has ruled that provisions of Sick Industrial Companies (Special Provisions) Act, 1985 would prevail over the provisions of the companies act.
The M/s. Madura Coats Limited was aggrieved by the impugned judgment and order dated 20/05/04 of the Division Bench of the High Court of Allahabad which allowed the Special Appeal of the M/s. Modi Rubber Ltd, staying the proceedings before the Company Court consequent upon a winding up order passed against the respondent .The stay was granted till a final decision was taken on the reference made by respondent to the Board for Industrial and Financial Reconstruction.
Dismissing the appeal Justice Madan B Lokur held:”it is quite clear that different situations can arise in the process of winding up a company under the Companies Act but whatever be the situation, whenever a reference is made to the Board of Industrial and Financial Reconstruction under Sections 15 and 16 of the SICA, the provisions of the SICA would come into play and they would prevail over the provisions of the Companies Act and proceedings under the Companies Act must give way to proceedings under the SICA.”
Read the Judgment here.