Chandrakantaraj Urs, J.
1. Prayer in this application is for an order to stop further proceedings pursuant to the winding up order made by this court on June 3, 1988, in view of section 22 of the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter referred to as 'the Act').
2. The undisputed facts are these :
Company Petition No.6 of 1988 was filed by a creditor seeking an order of winding up of Vishnu Textiles Ltd., Bangalore. That petition came to be allowed on June 3, 1988, and the official liquidator attached to this court was appointed the liquidator. That order has become final in so far as the provision of the Companies Act are concerned in that no appeal against the winding up order was filed nor was any person aggrieved by that order.
3. In the affidavit in support of the prayer in the company application under consideration it is stated that the former managing director of the applicant-company has proposed a scheme of rehabilitation to the Board constituted under the Sick Industrial Companies (Special Provisions)Act, 1985, and, therefore, has directed an enquiry and, therefore, in accordance with the provisions contained in sub-section (1) of section 22 of the Act, further proceedings pursuant to the order of winding up should be stayed by this court.
4. The prayer in the application is resisted by the creditor who obtained an order for winding up the company in question as well as the official liquidator. Therefore, the question which falls for determination by this court is : Whether section 22 of the Act is attracted to the facts of the case where the court has already passed a winding up order and, therefore, the prayer in the application may not be granted. Section 22(1) of the Act is as follows:
'Suspension of legal proceedings, contracts, etc. - (1) Where, in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against nay of the properties of the industrial company or for the appointment of a receiver in respect thereof shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority.'
5. The expression 'industrial company' is denied under the Act as follows :
'industrial company'means a company which owns one or more industrial undertakings.'
6. The following clause (f) of sub-section (1) of section 3 of the Act defines 'industrial undertakings' as follows :
'industrial undertakings' means any undertaking pertaining to a scheduled industry carried on in one or more factories by any company but does not include -
(i) an ancillary industrial undertaking as defined in clause (aa) of section 3 of the Industries (Development and Regulation) Act, 1951 (65 of 1951; and (ii) a small scale industrial undertaking as defined in clause (j) of the aforesaid section 3 ; '
7. From the definitions of the two expressions, it is clear that one has to bear in mind the distinction between an 'industrial company' and an 'industrial undertaking' for purposes of the Act. The manner in which an industrial company has been defined clearly makes the legislative intent unambiguous in that after the coming into force of the Act, industrial undertakings must be carrying on an activity of manufacturing specified in the schedule and if, for any reason, it has ceased to manufacture or is no9t carrying on the scheduled industry, then it cannot be held to be an industrial undertaking . Further, what is clear from the language employed in section 22(1) of the Act, is its reference only to an inquiry under section 16 pending or any scheme referred to under section 17 of the |Act which scheme is either under preparation or under consideration or is sanctioned and as such is under implementation or where there is an appeal against any of the findings recorded by the Board under section 25 of the Act is pending, then only the provisions of sub-section (1) of section 22 are attracted and not otherwise. There are numerous special conditions prescribed in section 15 of the Act before which the board of directors of a company may move the Board under the Act to institute an inquiry into the causes of sickness and make appropriate recommendations for its rehabilitation. In other words, for a reference to be made to the Board, the pre-requisite is the existence of a board of directors of the industrial company which is sick. If that Board does not exist in the eye of law on any given date, then the competence to make a reference itself disappears. As I have noticed earlier, Vishnu Textile Ltd. came to be wound up on June 3, 1988, by an order of this court. From the date communication of that order, the board of directors ceased to hold office and they are directors only for purposes of filing the statement of affairs in aid of the winding up proceedings and they do not exist for any other purpose. Therefore, if a reference is made by any body of persons claiming to be board of directors after the winding up order was made, then that reference itself appears to be wholly incompetent and the provisions of sections 16, 17 and 22(1) will not be attracted.
8. Apart from this, the court must not fail to notice that there is always a difference between an order in winding up and an order of winding up of a company. Generally understood, an order in winding up is any order made by the company court from the time the company petition is presented till the final order of winding up the company is made. An order of winding up is the culmination of the petition presented to the court either under section 398 or section 433 or section 583. Therefore, the distinction is only at the stage at which the order is made by the court. Orders in winding up may be many and may relate to several matters which arise before the court, before making the final allowing or dismissing the petition. If the petition is allowed, a winding up order must necessarily follow as provided under the Act and the consequences automatically follow if a winding up order is made. Therefore, what is contemplated under sub-section (1) of section 22 is the staying of the proceedings before the court in case a winding up order is not made and not where a winding up order is made. With this one exception, if an order in winding up is made appointing the official liquidator or a receiver, then also by virtue of section 31 of the Act, the proceedings of winding up will continue notwithstanding the act as mandated under section 31 of the Act, which reads as follows :
'31. Saving of pending proceedings. - Where a receiver or an official liquidator has been appointed in any proceeding pending immediately before the commencement of this Act in any High Court for winding up of an industrial company, such proceedings shall not abate but continue in that High Court.'
9. Therefore, from whatever angle one may look at it, this petition is liable to be dismissed. It is accordingly dismissed subject to the observation that if there is a rehabilitation scheme which may revive the company, such scheme should be proposed to the court after notice to the official liquidator and that will be considered and disposed of in accordance with law.