ORDER
T. Ch. Surya Rao, J.
1. Although the petitioners are different, respondent is the same in both the petitions. Both the petitions were filed seeking winding up of the respondent-company under Section 433(e) and (f) of the Companies Act, on the premise that the respondent company had been unable to pay its debts and, therefore, it had lost its substratum and therefore liable to be wound up.
2. Initially, notice before admission was ordered to the respondent. The respondent appeared through its Counsel. When the matter had been coming up for filing counter affidavit on the side of the respondent, its Counsel filed an affidavit stating that the matter had already been referred to the Board of Industrial Finance and Rehabilitation, for short 'BIFR', and the same had been pending before it.
3. The learned Counsel for the petitioners, Sri V. Srinivas represents that when the respondent-company is not an industrial company and merely because the matter has been referred to BIFR and the same is pending enquiry, the proceedings in this Company Petition cannot be stopped and it is open to the Company Court to consider whether the respondent-company is an industrial company or not and in the event of the Company Court comes to the conclusion that the respondent-company is not an industrial company notwithstanding the pendency of the petition before the BIFR the Company Petition can be proceeded further.
4. Per contra Sri V.S. Raju, learned Counsel for the respondent would seek to contend that once the application is registered by the BIFR, the proceedings shall not be further proceeded with by the Company Court.
5. Having regard to the respective contentions, the short point that falls for determination at the threshold of these two petitions is obviously the jurisdictional question, inasmuch as there has been no gain saying that the application before the BIFR has been registered and is pending enquiry and it is not known whether the BIFR has been satisfied itself as to whether the respondent-company is an industrial company or not.
6. The essential requisites need be satisfied before a company seeking industrial finance and rehabilitation from the Board under the provisions of Sick Industrial Companies (Special Provision) Act, (1 of 1985) for short 'SICA', are that the company must be an industrial company and it should become sick. So what is a sine qua non is that before seeking rehabilitation the company must be a sick industrial company. That gives the necessary jurisdiction to the BIFR to enquire into the matter for determining whether it has become a sick industrial company or not. That is the reason why it is contention of Sri V. Srinivas, learned Counsel for the petitioners that it is still open to this Company Court to investigate whether the respondent-company is an industrial company or not.
7. Obviously, the respondent-company is a public limited company. It has been specifically averred in the petition in para 5 that the main object of the company for which it was established was to carry on business of manufacturing, producing, processing of Liquified Petroleum Gas (LPG) and other allied gases and to set up manufacturing, processing, transporting/conveying facilities of Liquified Petroleum Gas. Among other objects, the notable being a set up Gas bunks, filling stations and to operate the same for the distribution and selling the gas or to grant the rights of such operations on franchise or otherwise. It is the contention of the learned Counsel that the respondent-company is mainly engaged itself in filling up Liquified Petroleum Gas in the cylinders, in other words bottling and distribution of the same to the consumers and, therefore, it is not an industrial company. To buttress the said contention, the learned Counsel seeks to place reliance upon a very recent pronouncement of a Division Bench of this Court in SHV Energy South East Ltd. v. State Investment Promotion Board : 2003(2)ALD665 (DB). That was a case where the petitioner's industrial units were engaged in the activity of filling up of LPG into specified sizes of cylinders and there had been no element of manufacture involved in the process. When they claimed exemption from sales tax in terms of G.O.Ms. No. 108, Industries and Commerce (IP) Department, dated 20-5-1996, it was held that since the petitioner's units were non-manufacturing units and, therefore, they were not eligible for tax exemption. In that view of the matter, in the instant case the learned Counsel for the petitioners would contend that the respondent-company is similarly placed with that of the petitioner's units in the above referred Judgment and, therefore, for want of manufacturing process, the respondent-company cannot be called as an industrial unit.
8. The objects of the company with which it was registered as set forth, inter alia, in para 5 of the petition shows the position otherwise. Manufacturing process is also one of the objects set forth for which the company was established. Even assuming for a moment that the contention of the learned Counsel that the respondent-company undertakes only bottling of the cylinders of LPG and distributes the same to the consumers and, therefore, the respondent-company is not an industrial company it has to be seen as to whether such an enquiry is open to the Company Court when once the matter is pending investigation and determination before the BIFR, having regard to the bar engrafted under Section 22 of the SICA. It is appropriate here at the outset to consider the provision germane in the context for consideration for brevity and better understanding of the matter. Section 22 of the SICA reads as under :
'Section 22 : 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 any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company) shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority'.
9. A mere perusal of the said provision shows that in the event of an enquiry under Section 16 of the SICA is pending before the BIFR or the Appellate Authority as the case may be, no proceedings for the winding up of the company or for execution, distress or the like against the properties of the company shall lie or be proceeded with further except with the consent of the Board or, as the case may be, the Appellate Authority. No doubt the proceedings pending before the BIFR shall be in respect of an industrial company, as discussed hereinabove. It is a sine qua non for the Board to consider at the threshold as to whether a particular company is an industrial company or not before assuming the jurisdiction under Sections 15 and 16(1) of the SICA. It is obvious therefore that the issue as to whether a given company, which approaches the Board for industrial finance or rehabilitation, is an industrial company or not is the jurisdictional issue or point to be determined and which indeed gives the necessary jurisdiction to the BIFR. Once the application has been registered before the Board for the purpose of enquiry as envisaged under Section 16 of the SICA, obviously Sub-section (1) of Section 22 comes into operation. The bar engrafted under the said section is absolute and no proceeding pending before the Company Court, notwithstanding any provision contained to the contra in the Companies Act, shall be proceeded with. Having regard to the same it is for the BIFR first to satisfy itself whether in a given case the company which approaches the Board is an industrial company or not. The question as to whether a particular company is an industrial company or not need not necessarily be considered by this Court at this juncture since it comes within the realm of the jurisdiction of the Board. It is well-settled that it is within the purview of a Court or the Tribunal as the case may be to adjudicate about its own jurisdiction. Therefore, rightly or wrongly if an application is registered with the Board and is pending enquiry for determining whether the company is really sick industrial company or not the provisions of Section 22(1) would come into play proprio vigore.
10. Lengthy arguments have been addressed by the learned Counsel for the petitioner to show what is an industrial company and whether the respondent-company is an industrial company or not. In this regard the definition of industrial company as enjoined under Clause (e) of Section 3 of the SICA and the definition of an industrial undertaking as given in Clause (f) thereof have been sought to be relied upon. Industrial company means a company, which owns one or more industrial undertakings and industrial undertaking means any undertaking pertaining to a schedule industry, but does not include any ancillary undertaking. What is a 'schedule industry' can be seen from the provisions of the Industries Development Regulation Act, 1951. Such an undertaking should be carried on it one or more factories by any company. In this context the definition of the word 'factory' should also be considered. Therefore, it is obvious that first of all the company shall be an industrial undertaking and it shall be a schedule industry as specified in the first schedule of the Industrial Development Regulation Act, 1951 and it shall be carried on in one or more factories of the company. Bottling cylinders with LPG according lo the learned Counsel by no stretch of the imagination is an industry, because it does not involve any manufacturing process. In this regard, the learned Counsel seeks to rely upon the meaning and the-expression 'manufacture' as given in the Law Lexicon. To buttress the said contention, the learned Counsel seeks to place reliance upon a Constitution Bench judgment of the Apex Court in Union of India v. Delhi Cloth & General Mills Co. Ltd. : 1973ECR56(SC) , the decision of the Apex Court in Dy. CST V. PIO Food Packers 1980 SCC (Supp.) 174, CCE v. Jayant Oil Mills (P.) Ltd. : 1989(40)ELT287(SC) and State of Maharashtra v. Mahalaxmi Stores : 2002ECR529(SC) .
11. All this is germane only when it is open to this Court to consider whether indeed the respondent-company is an industrial company or not so as to consider ultimately whether this Court can proceed with the proceedings before it notwithstanding the fact that the matter has been referred to the BIFR and the reference is pending for its determination as to whether the company is a sick industrial company or not. Inasmuch as Section 16(1) of the SICA specifically envisages an enquiry for determining whether a particular company is a sick industrial company or not, I am of the considered view that it is within the exclusive realm of the BIFR to determine the same since it pertains to the jurisdictional aspect. When it is within the exclusive realm of BIFR by necessary implication the jurisdiction of the Company Court is ousted to determine whether the respondent-company is really a sick industrial company or not, even for the limited purpose of determining whether this Court can proceed with the enquiry or not. Such a parallel adjudication might lead to chaos. In that view of the matter, since it is a jurisdictional aspect it does not open to this Court to delve into the aspect as to whether the respondent-company answers the definition of sick industrial company or not. If the given company is not an industrial company, the reference would be rejected at the threshold by the Board. If it is an industrial company, then it needs to be seen by the Board whether it is a sick industrial company or not. Therefore, the two things, namely, whether the given undertaking, is an industrial company and whether the said industrial company is a sick industrial company or not are the integral parts of the same proceeding which have to be considered by the Board. It is not open to contend that what is expected to be determined by the Board is only whether a particular company is a sick industrial company or not and as to whether the said undertaking is an industrial company or not is not within the jurisdiction of the Board. It is apt here to consider the recent judgment of the Apex Court in Real Value Appliances Ltd. v. Canara Bank : [1998]3SCR170 . Interpreting the provisions of Section 16 and the relevant regulations as amended with effect from 24-3-1994 the Apex Court was of the view that since it is mandatory that as soon as a reference is registered the necessary information/document shall be called for from the informant straightaway the enquiry must be deemed to have commenced under Section 16 of the said Act, the moment the application is registered. Once the legal position is thus settled that there has been an enquiry pending with the BIFR, the bar contained in Section 22(1) of the SICA automatically comes into operation.
The Apex Court in para 23 held thus :
'...It is argued that if the reference before the BIFR is only at the stage of registration under Section 15, then Section 22 is not attracted. This contention, in our opinion, has no merit. In our view, when Section 16(1) says that the BIFR can conduct the inquiry 'in such manner as it may deem fit', the said words are intended only to convey that a wide discretion is vested in the BIFR in regard to the procedure it may follow for conducting the inquiry under Section 16(1) and nothing more. In fact, once the reference is registered after security, it is, in our view, mandatory for the BIFR to conduct an inquiry. If one looks at the format of the reference as prescribed in the Regulations, it will be clear that it contains more than fifty columns regarding extensive financial details of the Company's assets, liabilities, etc. In deed, it will be practically impossible for the BIFR to reject a reference outright without calling for information/document or without hearing the Company or other parties. Further, the Act is intended to revive and rehabilitate sick industries before they can be wound up under the Companies Act, 1956. Whether the Company seeks a declaration that it is sick or more other body seeks to have it declared as a sick company. It is, in our opinion, necessary that the Company be heard before any final decision is taken under the Act. It is also the ' legislative intention to see that no proceedings against the assets are taken before any such decision is given by the BIFR for in case the Company's assets arc sold, or the company wound up it may indeed become difficult later to restore the status quo ante...' (p. 2071)
In that view of the matter, the Apex Court rejected the contention.
12. The above Judgment has been followed in Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. : (2000)5SCC515 . That was a case where in fact winding up order was passed on 5-9-1997. Consequently, a liquidator was appointed to take charge of the assets and other properties of the company in liquidation. On an appeal filed against the said order, a Division Bench of the High Court stayed the operation of the order. In the meanwhile, the Company filed a reference under Section 15(1) of the SICA before the BIFR and thereafter moved an application before the High Court under Section 22 of the said Act for stay of the proceeding arising out of the company petition. The Division Bench before which the appeal was pending rejected the application against which they carried the matter to the Apex Court. Four contentions were raised before the Apex Court, namely, (i) as no inquiry under Section 16 of the Act was pending at the time the order of the winding up of the company was passed, the proceedings for winding up of the company, could not be stayed; (ii) a view to the contrary, if taken, would defeat the ends of justice and make the petitions under the Companies Act, infructuous inasmuch as any unscrupulous litigant, after suffering an order of winding up, might approach the Board merely by filing a petition and consequently get the proceedings in the company case stayed; (iii) the action of the appellant was mala fide inasmuch as it sought time from the Court to make the payment of the amount due and after seeking its indulgence mala fidely made the reference to BIFR; and (iv) after the order of the winding up and appointment of the Liquidator, the Board of Directors had no jurisdiction to move BIFR. All the four contentions have been repelled by the Apex Court and held thus :
'The object of the Act is to afford maximum protection of employment, optimise the use of financial resources, salvaging the assets of production, realising the amounts due to the banks and to replace the existing time consuming and inadequate machinery by efficient machinery for expeditious determination by a body of experts to safeguard the economy of the country and protect viably sick units.
In view of Sections 15, 16 and Explanation to Section 16(3) (as ins. By Act 12 of 1994), from the date of submission of reference under Section 15, an inquiry shall be deemed to have been commenced for the purposes of Section 22 of the Act.
Contention (ii) of the respondent may be justified and having substance but in view of the language of Sections 15 and 16 of the Act particularly the Explanation to Section 15, the Supreme Court has no option but to adhere to its earlier decision in Real Value Appliances, While interpreting, the Supreme Court only interprets the law and cannot legislate it. If a provisions of law is misused and subjected to the abuse of process of law, it is for the Legislature to amend, modify or repeal it, if deemed necessary.
It is true that for invoking the applicability of Section 22 it has to be established that an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or a sanctioned scheme is under implementation or an appeal under Section 25 to an industrial company is pending. But it cannot be said that despite the existence of any of the aforesaid exigencies the provision of Section 22 would not be attracted after the order of winding up of the company is passed. The words 'no proceedings for winding up... shall lie or be proceeded with further', leave no doubt that the effect of the section would be applicable even after the winding-up order is passed.' (p. 516)
13. In the instant case it is clear that the proceedings in fact have been registered by the BIFR and they are pending enquiry for determination as to whether the respondent-company is a sick industrial company or not. Once that reference is registered as discussed by me hereinabove and as laid down by the Apex Court. Section 22(1) of the SICA comes into operation. The contention that mere registration will not operate as a bar and still it is to be seen whether it is an industrial company or not, in that view of the matter merits no consideration particularly having regard to the judgment of the Apex Court referred to above. Equally, the other contention that a sheer vexatious application filed by the unscrupulous company so as to thwart the proceedings before the Company Court cannot stop the Court from proceeding with the enquiry, otherwise it would lead to miscarriage of justice, is also not germane for consideration. It is open to the petitioners to agitate the same before the BIFR or the appellate authority, as the case may be. I, therefore, see no merit in the contention of the learned Counsel for the petitioners.
14. For the foregoing reasons, it is obvious that this Court cannot go into the jurisdictional aspect as to whether the respondent-company is an industrial company or not at this stage having regard to the fact that a reference has already been registered by the BIFR and is pending enquiry for determination as to whether the respondent-company is a sick industrial company or not. Therefore, the proceedings cannot be further proceeded with having regard to the absolute bar engrafted under Subsection (1) of Section 22 of the SICA.
The point is answered accordingly.