Judgment:
Ravi S. Dhavan, C.J.
1. These are matters, which have been filed by the same petitioner, namely, Bhawani Paper Mills (Pvt.) Ltd., Pushpayan, Budh Marg, District Patna, having its registered office at Janipur Road, Phulwarisharif, Patna.
2. Letters Patent Appeal No. 744 of 2000, arises out of an order passed in C. W. J. C. No. 9850 of 1995. In the latter case the petitioner sought a writ in the nature of certiorari for quashing Certificate Case No. 1/BICICO of 1994. The proceeding's were initiated under the Bihar and Orissa Public Demand Recovery Act, 1914. The debt was of the Bihar State Credit and Investment Corporation Limited, a State Corporation. The relief was denied, as the learned judge hearing the petition was of the view that the cause in the petition has become infructuous as the matter was now pending in winding up proceedings before the company judge, Patna High Court, under the Companies Act, 1956 (the 1956 Act).
3. The other writ petition is C. W. J. C. No. 10961 of 1998 also filed by Bhawani Paper Mills (Pvt.) Ltd., in which another counsel appears.
4. It is clear that Bhawani Paper Mills (Pvt.) Ltd. and another have chosen to engage different counsel for the different cases though the matters are not dissimilar.
5. A case has been registered at the Patna High Court as Company Petition No. 8 of 1997. A writ petition, C. W. J. C. No. 10961 of 1998 was filed on December 8, 1998. It is subsequent to the registration of the company case. This aspect is important. The appellant-company cannot open proceedings in every division of the High Court in related matters.
6. The matter of the appellants, Bhawani Paper Mills (Pvt.) Ltd., was before the Board for Industrial and Financial Reconstruction (the 'BIFR') under the Sick Industrial Companies (Special Provisions) Act, 1985 (the 1985 'Act'), and it was enquired by the BIFR as also the Appellate Authority. Ultimately, the Appellate Authority also came to the conclusion that
the state of affairs of the finances of the company was such that it was not possible to rehabilitate and revive the company. Thus, in accordance with the 1985 Act, it was recommended to the Patna High Court that the company be wound up. Thus, the company petition was registered.
7. As far as challenging a certificate for realisation of a debt is concerned, the position is not different than when the proceedings were before the BIFR. In accordance with the 1985 Act, no distress or attachment can be had against a company whose sickness is being enquired into, except by leave of either the BIFR or the Appellate Authority. Now, that matter is pending before the learned company judge, the provisions of the Companies Act, 1956, regulate the winding up proceedings. Likewise as in the Sick Industrial Companies (Special Provisions) Act, 1985, the realisation of a debt whether by a suit or any other proceeding requires a creditor to take leave of the hon'ble company judge. This is prescribed under Section 446 of the 1956 Act. This rests on the principle that once winding up proceedings are in motion then the official liquidator is obliged to inform the High Court about the assets and liabilities of the company under liquidation along with a list of the creditors. Thereafter, the creditors are ranked in priority. Consequently, the assets of the company are applied in satisfaction of its liabilities pari passu for distribution among the members according to their rights and interests in the company. Thus, a creditor cannot seek direct realisation of a debt except after having been registered as a creditor of a company which is being wound up.
8. In the circumstances, this court is of the opinion that the learned judge delivering his order dated April 18, 2000, in C. W. J. C. No. 9850 of 1995 was not incorrect when he certified that the proceedings in the writ petition have become infructuous.
9. This appeal is dismissed.
10. A copy of this order will be laid on the record of the Company Petition No. 8 of 1997 so that the same is available to the learned company judge for perusal and also for information of the litigation filed by the appellant-company.
11. C. W. J. C. No. 10961 of 1998, in which another counsel appears will be listed for orders before this court.